Answer:
Letter A is correct. Pull; Push.
Explanation:
The pull strategy is most emphasized by business-to-consumer companies because it is used to attract consumers through intense marketing and advertising communication, whose primary goal is to create brand value through customer loyalty.
The push strategy is more commonly used in business-to-business as it means pushing and bringing the products or services to the customer, is a strategy that involves direct selling usually exposed to the potential customer in showrooms and involves negotiations with retailers for example, offering discounts and special conditions to sell your products at your points of sale.
B2C companies usually employ a pull promotion strategy, creating direct consumer demand. B2B companies often use a push strategy, where products are promoted along the supply chain. The correct answer is option A) pull; push
Business-to-consumer (companies) are more likely to emphasize a pull promotion strategy, where the aim is to attract consumers directly, often through methods that make the product appealing and easy for consumers to acquire, such as e-commerce platforms. This aligns with the modern trend of giving power to the consumers, allowing them to direct their demand toward manufacturers. On the other hand, business-to-business companies usually utilize a push promotion strategy, where products are pushed through the marketing channel from manufacturers to wholesalers, and then retailers. In this type of strategy, the goal is to create demand at the supplier or retailer level, pushing the products toward the end user through the supply chain.
Gupta Corporation is undergoing a restructuring, and its free cash flows are expected to vary considerably during the next few years. However, the FCF is expected to be $65.00 million in Year 5, and the FCF growth rate is expected to be a constant 6.5% beyond that point. The weighted average cost of capital is 12.0%. What is the horizon (or continuing) value (in millions) at t = 5?
a. $1,025
b. $1,259
c. $1,136
d. $1,196
e. $1,079
Answer:
d. approximately $1,196
Explanation:
Value of the firm= FCF÷(k−g)
where:
FCF =operating free cash flow
k=discount rate, in this case WACC
g=expected growth rate in FCF
Therefore the horizon value of Gupta Corporation will be
65/(0.12-0.065) = $1,182
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.
In the most recent month, 140,000 items were shipped to customers using 5,300 direct labor-hours. The company incurred a total of $15,900 in variable overhead costs.
Answer:
Predetermined overhead rate
= Variable overhead cost
Direct labour hours
= $15,900
5,300 hours
= $3 per direct labour hour
Explanation:
Predetermined overhead rate equals total variable overhead cost divided by direct labour hours, which is $3 per direct labour hour.
Nouveaux Co. was incorporated at the beginning of this calendar year. Its articles of incorporation authorize 500,000 shares of common stock, of which 100,000 were issued immediately. On June 30, Nouveaux repurchased 10,000 shares to be held as treasury stock. On September 30, it effected a 3-for-1 stock split. Consequently, the number of shares outstanding at year end was
A) 1,500,000
B) 330,000
C) 300,000
D) 270,000
Answer:
D) 270,000
Explanation:
The computation of the outstanding number of shares is shown below:
= (Issued shares - treasury shares) × stock split ratio
= (100,000 shares - 10,000 shares) × 3
= 90,000 shares × 3
= 270,000 shares
Simply we deduct the treasury stock from the issued shares and then multiply it by the stock split ratio so that the correct amount of outstanding shares can come
There are two polluting firms in an industry. Each firm is initially generating 200 tons of pollution each year. Each faces the following costs in reducing pollution. Cost of reducing pollution by one ton Firm A $20 Firm B $10 The government has recently set a goal of reducing industrial pollution in the industry by 50% and is considering two policies to achieve this. The first policy would require all firms in the industry to reduce pollution by 50%. The second policy would involve issuing 100 tradable permits to each firm. (With tradable permits, each permit would allow the firm owning it to produce one ton of pollution annually. Firms would be free to buy and sell these permits as they desired. It would be illegal for firms to produce more pollution than the amount of pollution covered by the permits they own.)
Answer:
Permits will be the best option
Explanation:
Assuming the cost per ton of polution reduction follows a linear progression and it can reach zero
The best option will be the permits:
As Firm B will eliminate their polution and sale his permis to Firm A
That occur as Firm B is more efficient in doing this will sale to Firm A
In the end Firm A will have all the permits and continue to produce 200 tons
but Firm B will produce none achieving the goal of 50% reduction with the least economic impact.
This is a market solution which little intervention from the Gvernment
Cost to eliminate 200 polution with permits:
200 x $10 = 2,000
If we force each company to reduce pollution Firm A higher cost will create deadweight-loss
100 x $20 = 2,000
100 x $10 = 1,000
3,000
Wooten & McMahon Enterprises produces a product with the following per-unit costs: Direct materials $13.00 Direct labor 8.80 Manufacturing overhead 16.50 Last year, Wooten & McMahon Enterprises produced and sold 825 units at a sales price of $74.80 each. Total selling and administrative expense was $24,200. What was the cost of goods sold last year? (Note: Round answer to two decimal places.)
Calculate the cost of goods sold by adding up the total cost per unit, multiplying it by the number of units sold, and then adding the total selling and administrative expenses. thus answer is $55,812.50
The cost of goods sold last year for Wooten & McMahon Enterprises can be calculated as follows:
Calculate the total cost per unit: $13 (direct materials) + $8.80 (direct labor) + $16.50 (manufacturing overhead) = $38.30 per unit.Multiply the total cost per unit by the number of units sold: $38.30 x 825 units = $31,612.50.Add the total selling and administrative expenses to get the cost of goods sold: $31,612.50 + $24,200 = $55,812.50.A company manufactured 1,000 units of product during the year and sold 800 units. Costs incurred during the current year are as follows:
Direct materials and direct labor $7,000
Indirect materials and indirect labor 2,000
Insurance on manufacturing equipment 3,000
Advertising 1,000
1. What amount should be reported as inventory in the company’s year-end balance sheet?
Answer:
$2,400
Explanation:
Total production Cost:
= Direct materials and direct labor + Indirect materials and indirect labor + Insurance on manufacturing equipment
= $7,000 + $2,000 + $3000
= $12,000
Amount should be reported as inventory in the company’s year-end balance sheet:
= (Total production Cost ÷ Units manufactured) × (Units manufactured - Units sold)
= ($12,000 ÷ 1,000) × (1,000 - 800)
= $12 × 200
= $2,400
On February 1, 2012, Nelson Corporation purchased a parcel of land as a factory site for $250,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2012. Costs incurred during this period are listed below:
Demolition of old building $ 20,000Architect's fees 35,000Legal fees for title investigation and purchase contract 5,000Construction costs 1,290,000(Salvaged materials resulting from demolition were sold for $10,000.)
Nelson should record the cost of the land and new building, respectively, as:
a. $275,000 and $1,315,000.
b. $260,000 and $1,330,000.
c. $260,000 and $1,325,000.
d. $265,000 and $1,325,000.
Answer:
d. $265,000 and $1,325,000.
Explanation:
The computation is shown below:
For land:
= Factory lite + Demolition of old building + Legal fees for title investigation and purchase contract - Salvaged materials resulting from demolition
= $250,000 + $20,000 + $5,000 - $10,000
= $265,000
For new building:
= Architect's fees + Construction costs
=$35,000 + $1,290,000
= $1,325,000
Interview Notes Olivia is single, 66 years old, and not blind. She paid all the cost of keeping up her home. She earned $55,000 in wages for 2019. Olivia provided all the support for her two grandchildren who lived with her all year. Cora is 11 years old and Jack is 15 years old. She does not have enough deductions to itemize. Olivia, Cora, and Jack are all U.S. citizens with valid Social Security numbers. 2. The maximum amount of child tax credit that Olivia is able to claim per qualifying child for 2019 is:
Answer:
$2000.
Explanation:
Please see attachment
Third State Bank wants to add a new branch office. It has determined that the cost of construction of the new facility will be $1.5 million with another $500,000 in organizational costs. The bank has estimated that it will generate $319,522 per year in net revenues for 20 years. If Third State requires a 17% return on its money, what is this project's net present value?
Answer:
$298,206
Explanation:
The computation of the Net present value is shown below
= Present value of all yearly cash inflows after applying discount factor + salvage value - initial investment
where,
The Initial investment is $1,500,000
All yearly cash flows would be
= Annual net operating cash inflows × PVIFA for 20 years at 17%
= $319,522 × 5.6278
= $1,798,206
Refer to the PVIFA table
Now put these values to the above formula
So, the value would equal to
= $1,798,206 - $1,500,000
= $298,206
Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 10 percent annually. Required: (a) What is Advance's pretax cost of debt? (Do not include the percent sign Round your answer to 2 decimal places. (e.g., 32.16) Pretax cost of debt (b) If the tax rate is 35 percent, what is the aftertax cost of debt? (Do not include the percent sign Round your answer to 2 decimal places. (e.g., 32.16) Aftertax cost of debt
Answer:
a. 9.39%
b. 6.10%
Explanation:
The NPER shows the time period or number of years
Provided that,
Present value = $1,000 × 105% = $1,050
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 10% ÷ 2 = $50
NPER = 16 years × 2 = 32 years
The formula is presented below:
= Rate(NPER;PMT;-PV;FV;type)
The present value always comes in negative amount while applying the rate formula
So, after calculations, the rate would be equal to
a. The pretax cost of debt is 9.39%
b. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 9.39% × ( 1 - 0.35)
= 6.10%
For each transaction, indicate whether each account would be classified in the balance sheet as (a) an asset, (b) a liability, or (c) stockholders' equity; in the income statement as (d) a revenue or (e) an expense; or in the statement of stockholders' equity as (f) a dividend.Account Classifications Accounts Rent expenseInterest1. _____ Rent expense Cost of rent.2. _____ Interest revenue Interest earned on saving accounts.3. _____ Dividends Cash payments to stockholders4. _____ Land Land used for operations5. _____ Accounts payable Amounts owned for supplier
Answer:
1. e
2. d
3. f
4. a
5. b
Explanation:
1. Rent expense - Cost of rent - It is an expense which is an expense that is incurred during the course of operations of the business.
2. Interest revenue - Interest earned on the saving accounts - It is a Revenue, which is the revenue or the profit that is earned during the course of operations of the business.
3. Dividends- Cash payment to stockholders - It will be classified as Dividend, this is dividend which is paid out of profits of the company to stockholders.
4. Land - Land used for operation - It is classified or recognized as the Asset, as it is a resource which is owned by the company or business and could expect future benefits for its use.
5. Accounts Payable - Amounts owned for supplier - It is acknowledged as the liability, because it is an obligation or liability owed by the business to creditors.
Rent expense is an income statement expense, interest revenue is income statement revenue, dividends are noted in the statement of stockholders' equity, land is a balance sheet asset, and accounts payable is a balance sheet liability.
Explanation:Each account can be classified into different sections of financial statements according to its nature. Here's how each account in the given list would be classified:
Rent expense: This would be classified as (e) an expense in the income statement.Interest revenue: This would be classified as (d) a revenue in the income statement.Dividends: These would be classified as (f) a dividend in the statement of stockholders' equity.Land: Land is an asset, so it would be classified as (a) an asset in the balance sheet.Accounts payable: This is a liability that the company owes, so it would be classified as (b) a liability in the balance sheet.The T-account is a useful tool in accounting to represent the balance between a firm's assets, liabilities, and net worth, where assets always equal liabilities plus net worth. On a personal balance sheet, deposits would typically be seen as assets and loans as liabilities, while for a bank, deposits are liabilities and loans are assets.
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Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $2,000. The division sales for the year were $1,040,000, and the variable costs were $850,000. The fixed costs of the division were $183,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
A. $54,900 decrease
B. $135,100 decrease
C. $52,900 decrease
D. $190,000 increase
E. $190,000 decrease
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Brooke owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home where she meets with clients, prepares bills, and performs other work-related tasks. The home office is 300 square feet and the entire house is 4,500 square feet. Brooke incurred the following home-related expenses during the year. Unless indicated otherwise, assume Brooke uses the actual expense method to compute home office expenses.
Real property taxes $ 3,600
Interest on home mortgage 14,000
Operating expenses of home 5,000
Depreciation 12,000
Repairs to home theater room 1,000
Assume Brook's consulting business generated $50,000 in gross income for the current year.
a. What is the Brooke's home office deduction for the current year?
b. What is Brooke's AGI for the year?
Brooke's home office deduction is $2,307.82, which represents 6.67% of her total home-related expenses, excluding repairs that don't affect the office space. After deducting this amount from her gross income of $50,000, her adjusted gross income (AGI) would be $47,692.18 for the year.
Explanation:To calculate Brooke's home office deduction, we need to determine the portion of her home expenses that can be attributed to her home office. The percentage of the home used for the office is calculated by dividing the square footage of the office (300 square feet) by the total square footage of the home (4,500 square feet), which gives us 6.67% (300/4500).
The deductible home office expenses are a portion of the total home expenses that relate to the business use of the home. Calculating these expenses:
Real property taxes: $3,600 * 6.67% = $240.12Interest on home mortgage: $14,000 * 6.67% = $933.80Operating expenses of home: $5,000 * 6.67% = $333.50Depreciation: $12,000 * 6.67% = $800.40Repairs to home theater room are not deductible as they do not affect the office area.Total home office deduction:
$240.12 (taxes) + $933.80 (interest) + $333.50 (operating expenses) + $800.40 (depreciation) = $2,307.82
To calculate Brooke's Adjusted Gross Income (AGI), you subtract the home office deduction from the gross income:
Gross Income: $50,000
Home Office Deduction: -$2,307.82
Adjusted Gross Income: $47,692.18
a. Brooke's home office deduction for the current year is approximately $2,309.22.
b. Brooke's AGI for the year is approximately $47,690.78.
a. To calculate Brooke's home office deduction, we first need to determine the percentage of her home used for business. The home office represents 300/4,500 = 1/15 or 6.67% of the total square footage. Therefore, Brooke can deduct 6.67% of her home-related expenses attributable to the home office.
Home office deduction = Total home-related expenses × Percentage of home used for business
= ($3,600 + $14,000 + $5,000 + $12,000) × 6.67%
= $34,600 × 6.67%
≈ $2,309.22
Brooke's home office deduction for the current year is approximately $2,309.22.
b. To calculate Brooke's AGI, we subtract her business expenses (including the home office deduction) from her gross income.
AGI = Gross income - Business expenses
= $50,000 - $2,309.22
≈ $47,690.78
Therefore, Brooke's AGI for the year is approximately $47,690.78.
Gonzalez Company has been in business several years. At the end of the current year, the ledger shows the following: Accounts Receivable $ 318,600 Dr. Sales Revenue 2,301,300 Cr. Allowance for Doubtful Accounts 6,600 Cr. Bad debts are estimated to be 5% of accounts receivables. Prepare the entry to adjust Allowance for Doubtful Accounts.
Answer:
Allowance for Doubtful Accounts is $9330
Explanation:
given data
Accounts Receivable = $318,600 Dr.
Sales Revenue = 2,301,300 Cr.
Allowance for Doubtful Accounts = 6,600 Cr.
Bad debts estimated = 5% of accounts receivables
to find out
Prepare entry Allowance for Doubtful Accounts
solution
we get here required allowance that is
required allowance = $318,600 × 5%
required allowance = $15930
so bad debt expense that is = required allowance - Allowance for Doubtful Accounts ................1
so bad debt expense that is $15930 - $6,600
bad debt expense = $9330
so
particular debt credit
bad debt expense $9330
Allowance for Doubtful Accounts $9330
High Mountain Lumber (HML) has normal budgeted overhead costs of $115,150 and a normal capacity of 35,000 direct labor hours for the fourth quarter, which are evenly distributed between months. HML allows 0.5 direct labor hours per piece of lumber, and they produced 25,000 pieces of lumber in the second month of the quarter. This took them 13,000 labor hours. If HML had variable overhead costs of $21,000 and fixed overhead costs of $18,000 in the month, what is their total overhead variance?
A : $2,125 F
B : $3,718 U
C : $3,718 F
D : $2,125 U
Answer:
$
Standard total overhead cost (0.5 hr x 25,000 x $3.29) 41,125
Less: Actual total overhead cost ($21,000 + $18,000) 39,000
Total overhead variance 2,125(F)
Standard overhead application rate
= Budgeted overhead
Budgeted direct labour hours
= $115,150
35,000 hours
= $3.29 per direct labour hour
Explanation:
Total overhead variance is the difference between standard total overhead cost and actual total overhead cost. Standard total overhead cost is the product of standard hours per unit, standard overhead application rate and actual output produced. Actual total overhead cost is the aggregate of actual variable overhead cost and actual fixed overhead cost. Standard overhead application rate is the ratio of budgeted overhead to budgeted direct labour hours (normal capacity).
Which OAuth URL parameter can be used to retain the originally requested page so that a user can be redirected correctly after OAuth authorization?
A. Universal Containers (UC) built integration for their employees to post, view, and vote for ideas in Salesforce from an internal Company portal.
B. When ideas are posted in Salesforce, links to the ideas are created in the company portal pages as part of the integration process.
C. The Company portal connects to Salesforce using OAuth.
D. Everything is working fine, except when users click on links to existing ideas, they are always taken to the Ideas home page rather than the specific idea, after authorization.
All options are correct.
Redirect_uri OAuth URL parameter can be used to retain the originally requested page so that a user can be redirected correctly after OAuth authorisation.
Explanation:
The open standard for token-based authentication on the Internet is OAuth (Open Authorization). OAuth, which is known as ' oh-auth, ' allows third-Party sites like Twitter to use account information on end users, without the user's password being revealed.
The redirect uri is an url used among OAuth services as a place to transmit the admin rights token by means of the redirect web browser.
Once the user authorises an application successfully, the approval manager must return the user to the client either with an authentication code or with an URL access token.
Adjusting Entries for Interest The following note transactions occurred during the year for Towne Company: Nov. 25 Towne issued a 90-day, nine percent note payable for $8,000 to Hyatt Company for merchandise. Dec. 7 Towne signed a 120-day, $30,000 note at the bank at ten percent. Dec . 22 Towne gave Barr, Inc., a $12,000, four percent, 60-day note in payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer:
31st December
Dr Interest expenses 72
Cr Interest Payable 72
(to record interest expenses payable as at 31st December for note owed to Hyatt)
Dr Interest expenses 200
Cr Interest Payable 200
(to record interest expenses payable as at 31st December for note owed to the Bank)
Dr Interest expenses 12
Cr Interest Payable 12
(to record interest expenses payable as at 31st December for note owed to Towne)
Explanation:
The total interest expenses payable as at 31st December is calculated for each creditors as below:
- 36 days Interest expenses owed to Hyatt: 36/360 * 9% * 8,000 = $72.
- 24 days Interest expenses owed to the Bank: 24/360 x 10% x 30,000 = $200.
- 9 days Interest expenses owed to Towne: 9/360 x 4% x 12,000 = $12.
The question involves adjusting entries for interest on the loans issued by Towne Company. The calculations are based on simple interest, with each entry reflecting an interest expense and an interest payable.
Explanation:This question involves calculating
simple interest
on loans due after the closing of the calendar year. For the $8000 note payable to Hyatt for example, the calculation would be as follows: $8000 * 0.09 * (36 / 360) = $72. The general journal entry would be:
Interest Expense
72,
Interest Payable
72. Similar entries would be made for the $30,000 bank note and the $12,000 Barr note, adjusting for the varying interest rates. We adjust the interest because the loans extend into the next year past the close of this year.
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The risk that actual returns will not match or exceed expected returns is called:________a. investment risk. b. asset class risk. c. market risk. d. default risk. e. opportunity cost.
Answer:
a. investment risk
Explanation:
Risk is the potential of an action or activity (including the option not to move) to cause an undesired loss or event. The idea implies that a choice affects the outcome. The same potential losses can be called "risk".
Investment risk: We can define it as the inappropriateness between the actual and expected returns. Because on this type of risk, there may be occurrence of any losses with some probability or likelihood which will be relative the expected return.
Asset class is about the grouping process of investments which have some mutual or similar characteristics. The risk on this case is something has relative elasticity compared to another investment in the market. Usually, there is 3 groups of asset classes: equities, bonds and money market instruments.
The market risk which is called sometimes as systematic risk. This risk consider the entire market and has effects on this scale. The investor who undertook this risk will see that the factors which affect the overall performance of the whole marketplace.
Opportunity cost is the cost when you have purchased, chose or bought the product compared to another product. However, you will notice that if you buy another one you will get more value or consumer surplus but you have just bought and you missed chance. This is the opportunity cost
The King Corporation has ending inventory of $386,735, and cost of goods sold for the year just ended was $4,981,315. a. What is the inventory turnover?
Answer:
12.88
Explanation:
Given that,
Ending inventory = $386,735
Cost of goods sold for the year just ended = $4,981,315
The inventory turnover ration is determined by dividing the Cost of goods sold for the year just ended by the Ending inventory.
Inventory turnover:
= Cost of goods sold ÷ Ending inventory
= $4,981,315 ÷ $386,735
= 12.88
Therefore, the inventory turnover for the king corporation is 12.88
Final answer:
To calculate the inventory turnover for King Corporation, divide the cost of goods sold ($4,981,315) by the ending inventory ($386,735), resulting in an approximate turnover ratio of 12.88.
Explanation:
The question relates to the calculation of inventory turnover, which is a key metric in business and accounting. Inventory turnover indicates how many times a company's inventory is sold and replaced over a period, typically a year. To calculate inventory turnover, we divide the cost of goods sold by the average inventory. However, since the average inventory is not provided, we can use the ending inventory as an approximation. Therefore, the formula becomes:
Inventory Turnover = Cost of Goods Sold / Ending Inventory
Using the figures provided:
Inventory Turnover = $4,981,315 / $386,735
This calculation results in an inventory turnover ratio of approximately 12.88. However, for a more accurate figure, one should ideally use the average of the beginning and ending inventory for the period.
Purple Corporation makes a property distribution to its sole shareholder, Paul. The property distributed is a house (fair market value of $189,000; basis of $154,000) that is subject to a $245,000 mortgage that Paul assumes. Before considering the consequences of the distribution, Purple’s current E & P is $35,000 and its accumulated E & P is $140,000. Purple makes no other distributions during the current year. What is Purple’s taxable gain on the distribution of the house?
A. $0
B. $21,000
C. $35,000
D. $91,000
E. None of the above
Answer:
D. $91,000
Explanation:
Since the Distributed Property (House) is subject to a liability in excess of basis, the fair market value is treated as not being less than the amount of liability:
Purple has a gain of;
Liability - Basis
$245,000 - $154,000
$91,000
Hence the Taxable Gain would be of $91,000
The following data are available for a company's manufacturing activities:Beginning Work in Process inventory 5,000 units 75% completed as to direct laborUnits started and completed 15,000 Ending Work in Process inventory 6,000 units 50% completed as to laborIf materials are added when the production process begins and direct labor is applied uniformly throughout the process, what are the equivalent units for direct materials and for direct labor, respectively using the FIFO method of process costing?
Answer:
Equivalent units of Material = 21000
Equivalent units of Labor = 21750
Explanation:
Under the FIFO method, inventory which is purchased and/or processed at the beginning should be sold first and the closing and/or latest inventory remains to be sold for later sales. As far as process costing is concerned it's a costing method used to assign costs to units produced mostly of a similar nature. So the question is asking for the equivalent units for direct material and labor. Equivalent units are amount of partial units produced which are expressed in terms of fully completed units.
On the ending WIP inventory and units started & completed 100% material has been consumed so the equivalent units of direct material would be the total of beginning and ending inventory, see as follows;
Equivalent units of Material = 15000 + 6000
EUM= 21000
Whereas for labor, beginning inventory, units started & completed and ending inventory has consumed 75%, 100% and 50% of labor respectively. Therefor, the equivalent units of labor are as follows;
Equivalent units of Labor = (5000× 75%) + 15000 + (6000× 50%)
Equivalent units of Labor = 21750
A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 10% or down by 10%. The risk-free interest rate is 8% per annum with continuous compounding. What is the value of a one-year European call option with a strike price of $100?
Calculate the price of a three-month European put option on a non-dividend-paying stock with a strike price of $50 when the current stock price is $50, the risk-free interest rate is 10% per annum, and the volatility is 30% per annum.
Answer:
Please see attachment
Explanation:
Please see attachment
The cost of European call and put options can be calculated using financial mathematical models such as the Black-Scholes Model and IV tree. The risk-free rate, time to maturity, volatility, current and strike prices are factored in these calculations.
Explanation:The subject matter of your question pertains to the calculation of the price of European call and put options, which falls under the field of Financial Mathematics in Business Studies. The major concepts needed to solve this include the understanding of options, the Black-Scholes Model, IV trees, and continuously compounded interest.
For the first part, a one-year European call option would use an IV tree model. Two options exist for the stock price after six months: $110 (up-state) or $90 (down-state).
After another six months, the up-state can go to $121 or $99, while the down-state can turn to $99 or $81. Using the risk-neutral probabilities and the risk-free rate, you can discount these future payoffs back to the present, hence calculating the option price.
The second part involves the use of the Black-Scholes Model to value a three-month European put option.
Here, the assumptions include the stock price, the strike price, the risk-free interest rate, the volatility, and the time to maturity, which are all given in the question. Plugging these into the Black-Scholes formula will generate the price of the put option.
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Say that the original supply curve for avocados is the curve labeled S and the demand curve for avocados is the curve labeled D. If the supply curve moved from S to S1 and the demand curve did not move, at the new equilibrium we would conclude that
A. supply decreased and quantity demanded decreased.
B. supply increased and quantity demanded decreased.
C. price decreased and quantity demanded did not change.
D. supply increased and quantity demanded increased.
E. demand increased and quantity supplied increased.
Answer:
D. supply increased and quantity demanded increased.
Explanation:
When supply curve moved from s to s1 , supply increased . demand curve did not move . Then the new equilibrium will shift towards the lower price with demand also showing increasing trend to balance supply but at lower price.
Odell's Furniture has a manufacturing facility in Rigby, Idaho that has an effective capacity of 106 furniture pieces per day and produces 88 furniture pieces per day.What is the facility's efficiency rate?a. Write your answer as a percentage.b. Display your answer to two decimal placesWhat is the facility's utilization rate? a. Write your answer as a percentage.b. Display your answer to two decimal places
Answer:
a. 83.02%
b. 76.52%
Explanation:
The computations are shown below:
a. Facility's efficiency rate = Actual output × 100 ÷ Effective capacity
= 88 × 100 ÷ 106
= 83.02%
b. Facility's utilization rate = Actual output × 100 ÷ Design capacity
= 88 × 100 ÷ 115
= 76.52%
The Pell Grant program of the federal government provides financial aid to needy college students. If the average grant is slated to increase from $4050 to $5400 over the next 5 years "to keep up with inflation," what is the average inflation rate per year expected to be?
Answer:
The average inflation rate per year is expected to be 6,6%.
Explanation:
Inflation refers to the increase in the price of goods and services in a specific period of time. Considering that the statement says that the average grant is slated to increase from $4050 to $5400, you can calculate the average inflation rate per year by calculating the price increase percentage and then dividing that by 5:
($5400-$4050)/$4050= 0,33*100= 33%
33%/5= 6,6%
a company issues a 10000 8 percent 10 year bond on jan 1 year 1 for 10420. Interest is paid annually on jan 1. If the company uses the straight line method of amortization of bond discounts and premiums, the amount of bond interest expense to be recognized in year 1 would be
Answer:
The interest expense to be recognize in years 1 amounts to be 792 dollars.
Explanation:
As per matching principle the interest expense to be recognized in income statement is calulated using effective rate of return. The effective rate is calculated using IRR method
For IRR purpose the cashflow will be taken as given below
Time (year) Cashflow
0 10,420
1-9 800
10 10,800
By hit and trail method IRR= 7.6 %
So interest expense to be recognized = 7.6% *10,420 = 792 dollars
(Standard applied IFRS 9)
Which of the following might explain the evidence of an endowment effect in behavioral economics?A) Government regulation B) Knowledge and experience C) The federal tax code D) Class envy
Answer:
The correct answer is letter "D": Class envy.
Explanation:
In behavioral economics, the endowment effect explains why an individual could give a higher value to an object that posses than giving a low value when the individual does not have it. The approach implies the object has symbolic importance for the individual while having it.
A good example of the endowment effect refers to a teacher that gives one of his classes' students mugs as gifts. The value of the students who received mugs was higher than the value of those who did not get one.
The endowment effect in behavioral economics is best explained by knowledge and experience, which affect how individuals value their possessions. Barriers to entry can be government-enforced or not and influence market dynamics.
The endowment effect in behavioral economics might be explained by B) Knowledge and experience. This effect, as described by David Hume and acknowledged by behavioral scientists, refers to the tendency for individuals to value an item more once it becomes part of their personal endowment. This is likely because knowledge and experience with a product increase its subjective value, which is consistent with behavioral economics' recognition that human behavior often deviates from the rational decision-making models of traditional economics. Concepts such as mental accounting and nudges further illustrate that individuals value their possessions not solely based on their market value but also due to various psychological attachments and barriers.
Understanding barriers to entry in a market can be classified as follows: a) a city limiting taxicab licenses represents a government-enforced barrier to entry; b) requiring drivers to pass safety tests and have insurance is also a government-enforced barrier; C) having a well-known trademark is a non-government-enforced barrier; d) owning a unique spring is another non-government-enforced barrier; and e) large economies of scale present a non-government-enforced barrier attributable to market conditions rather than regulatory intervention.
Finally, government intervention in the economy can affect the endowment effect through various means such as taxation, provision of merit goods, and legislation that nudges consumer behavior. Additionally, economic policies can influence levels of employment, output, and price levels, suggesting a complex interaction between government actions and the endowment effect.
Sales $484,000 Operating Income ? Total Assets ? Sales Margin (ROS) 10% Capital Turnover ? Return on Investment (ROI) 22% Target Rate of Return (Cost of Capital) ? Residual Income 4,400 Match the unknowns to the correct answer. Correct! Operating Income Correct! Total Assets Correct! Capital Turnover You Answered Target Rate of Return Correct Answer20.0% Other Incorrect Match Options: 100,000
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Anemone Company produces picture frames. During the year, 200,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows: Direct materials (2 pieces of wood @ $3) $6.00 Direct labor (2 hours @ $12) $24.00 Anemone purchased and used 600,000 pieces of wood at $4.00 each, and its actual labor hours were 320,000 hours at a wage rate of $13. What is Anemone's labor rate variance? a.$660,500 F b.$450,000 F c.$320,000 U d.$445,000 U
Answer:
Labour rate variance
= (Standard rate - Actual rate) x Actual hours worked
= ($12 - $13) x 320,000 hours
= $320,000(U)
The correct answer is C
Explanation:
Labour rate variance is the difference between standard labour rate and actual labour rate multiplied by actual labour hours worked.
Each of the events listed will shift either Aggregate Demand or Short-Run Aggregate Supply. Match each event with its result.
Question
1.The government raises taxes and cuts its own spending in order to reduce its budget deficit
2.Planned Investment rises.
3.Commodity prices fall
4.Labor productivity falls while nominal wages stay the same
5.Exports rise while imports stay constant.
6.Nominal wages rise while productivity stays the same.
All Answer Choices
A. Aggregate Demand shifts to the left.
B. Aggregate Demand shifts to the right.
C. Short Run Aggregate Supply shifts down and to the right.
D. Short Run Aggregate Supply shifts up and to the left.
Answer:
See below.
Explanation:
For question 1, the aggregate demand shifts to the left as raising taxes and cutting government expenditure is a contracting fiscal policy. Raised taxes will leave people with less disposable income to spend and lees government demand will also result in reduced aggregate demand thus shifting AD curve to the left . Matched with A.
For question 2, with rise in planned investment, the aggregate demand shifts to the right. As more firms demand for capital goods the aggregate demand curve shifts to the right. In the long run the aggregate supply curve will also shift to the right due to increased production capacity. Matched with B.
For question 3, commodity prices are directly linked with aggregate demand. A fall in prices increases the quantity demanded and thus shifts the AD curve to the right. Matched with B.
For question 4, SAS curve shifts up and to the left. Since the cost of labor has stayed the same and productivity has fallen, per product manufactured is now more expensive and the aggregate supply is less due to fallen productivity. Matched with D.
For question 5, an increase in exports would mean more employment as more of the production is needed to to be sent out to foreign countries. More employment means people have more money to spend and as such they demand more goods and services thus pushing the aggregate demand curve to the right. Matched with B.
For question 6, an increase in nominal wage rate will shift the aggregate supply curve to the left as in the short run this has increased the cost of production. As such less of the goods will be supplied and at a higher price reflecting a change in costs for the producers. Matched with D.