Answer:
Payoff per share = $4
Profot pershare = $2
Explanation:
In a call option, the long (the party that buy the put) will have gain on the option when the underlying asset price is higher than the excercise price of that asset (imagine the advantage that you can buy an apple at $10 when its market price is $12). Because the stock price is $44, higher than exercise price of 40, so the company should exercise the call. Total payoff per share is 44 - 40 = $4 (and profit per share = 4 - 2 = $2) .
Note: We dont include premium to buy the call here because the question asking about payoff. We on include premium in calculations when the question is about profit.
Abey Kuruvilla, of Parkside Plumbing, uses 1,220 of a certain spare part that costs $26 for each order, with an annual holding cost of $25.
a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 100 (round your responses to two decimalplaces).
b) What is the economic order quantity?
Answer:
Answer:
Total cost = Total ordering cost + Total holding cost
Total cost = DCo/Q + QH/2
Where D = Annual demand, Co = Ordering cost per order and H = holding cost per item per annum.
For 25 Order Size
Total cost = 1,220 x $26/25 + 25 x $25/2
Total cost = $1,268.80 + $312.50 = $1,581.30
For 40 Order Size
Total cost = 1,220 x $26/40 + 40 x $25/2
Total cost = $793 + $500 = $1,293.00
For 50 Order Size
Total cost = 1,220 x $26/50 + 50 x $25/2
Total cost = $634.40 + $625 = $1,259.40
For 60 Order Size
Total cost = 1,220 x $26/60 + 60 x $25/2
Total cost = $528.67 + $750 = $1,278.67
For 100 Order Size
Total cost = 1,220 x $26/100 + 100 x $25/2
Total cost = $317.20 + $1,250 = $1,567.20
b. The economic order quantity is 50 units because it reduces the total cost to $1,259.40
Explanation:
In this case, we need to determine the total costs based on different order sizes. Thus, economic order quantity is the order size that minimises the total cost.
Describe two of the four approaches to ethical reasoning. Please include an example of each. Your example could be one that you observed or experienced during your life or an original idea.
Explanation:
1- Virtue Ethics: It can be described as an ethical approach that prioritizes the subjective and instinctive virtues shared by all human beings regardless of cultural traits. Emphasizes generosity, faithfulness, the sense of human generosity, character, and virtues coming from the mind.
An example of the ethical theory of virtue is an unknown person who needs some help and approaches another person who is readily available to help.
2- Duty-based ethics: It is ethics based on human rationality to exercise principles and ethical duty, regardless of positive or negative consequences for oneself.
An example of this ethical theory is entrepreneurs who use some strategies to achieve operational goals, but are aware that they must take responsibility not to exceed ethical values even if it is for the good of the business.
A company bought a $1,000,000 building and $500,000 of land with a $300,000 cash down payment and used a new mortgage to pay the balance. What is the investing cash flow in this transaction?
The company purchased a building and land for a total of $1,500,000, making a $300,000 cash down payment. The investing cash flow for this transaction is $300,000. So, the correct option is d.
Let's go into more detail with the step-by-step calculation:
1. Total Purchase Price:
- Building cost: $1,000,000
- Land cost: $500,000
Total Purchase Price = Building cost + Land cost
= $1,000,000 + $500,000
= $1,500,000
2. Cash Down Payment:
- Cash down payment made: $300,000
3. Balance Financed through Mortgage:
The remaining amount after the down payment is financed through a mortgage:
Balance Financed = Total Purchase Price - Cash Down Payment
= $1,500,000 - $300,000
= $1,200,000
4. Investing Cash Flow:
The investing cash flow is the cash outflow related to the purchase. In this case, it's the cash down payment:
Investing Cash Flow = Cash Down Payment
= $300,000
So, in summary, the company paid a total of $1,500,000 for the building and land. They made a $300,000 cash down payment, and the remaining $1,200,000 was financed through a mortgage. The investing cash flow, which represents the cash outflow related to the purchase, is $300,000.
Complete question :- A company bought a $1,000,000 building and $500, 000 of land with a $300,000 cash down payment and used a new mortgage to pay the balance. What is the investing cash flow in this transaction?
a. ($1,200,000).
b. ($1,500,000).
c. ($1,000,000).
d. ($300, 000).
e. ($1,800,000).
Final answer:
In the described transaction, the investing cash flow is a $300,000 outflow, which is the cash down payment made for the purchase of a building and land totaling $1,500,000.
Explanation:
In the transaction described, a company bought a $1,000,000 building and $500,000 of land, making a $300,000 cash down payment and financing the remainder with a new mortgage. The investing cash flow for this transaction would be the cash outflow to acquire the building and land, totaling $1,500,000. Since the company used a $300,000 down payment, this amount represents the outflow in the investing activities section of the cash flow statement.
The rest of the purchase price paid by the mortgage does not affect the cash flow statement immediately, as this represents a financing activity, not an investing activity.
Galt Industries has no debt, total equity capitalization of $600 million, and an equity beta of 1.2. Included in Galt's assets is $90 million in cash and risk-free securities. Assume the risk-free rate is 4% and the market risk premium is 6%.Galt's enterprise value is closest to:A) $90 millionB) $510 millionC) $600 millionD) $690 million
Answer: A
Explanation: using capital asset pricing model.
Ke=Risk free rate + Beta (risk premium)
Ke = 0.04 + 1.2(0.06)
Ke = 0.112.
value of equity = $600m × 0.112 = $67,200,000
value of cash= $90m × 0.112 = $10,080,000
Total value of firm = value of equity + value of cash
= $67,200,000+$10,080,000
= $77,280,000
The enterprise value of Galt Industries is calculated by subtracting the value of cash and risk-free securities from the total equity capitalization (i.e., $600 million - $90 million), resulting in $510 million.
Explanation:The equity capitalization of Galt Industries is given as $600 million. This includes $90 million in cash and risk-free securities. Therefore, while calculating the enterprise value, we need to subtract the value of unnecessary cash kept by the company from the total equity capitalization. Thus, the enterprise value of the company is $600 million (equity capitalization) - $90 million (cash and risk free securities) = $510 million. Therefore, the enterprise value of Galt Industries is closest to $510 million.
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If there is a recessionary gap in the short run, the Federal Reserve can eliminate the gap in the short run by undertaking a policy action that raises aggregate demand. But, if Federal Reserve chooses not to close the gap in the short run, the economy will eventually get back to full employment in the long run. Because when there is a recessionary gap in the short run, then in the long run a new equilibrium will arise as input prices and expectations adjust downward, causing the aggregate supply to shift downward and to the right and pushing equilibrium real GDP back to its long-run potential value.
a. A monetary policy action that could eliminate a recessionary gap in the short run is an open market sale of government securities a decrease in the required reserve ratio a decrease in taxes .
b. If Fed implements the short run monetary policy option instead of simply waiting for the long -run adjustments to take place, then it
Answer:
D. harms the society by interfering with the economy's natural process.
Explanation:
In order to get out of recession, the fed should reduce the tax rates, which would in return lead to higher disposable income of the consumers, and then there will be an increase in the demand.
On the other hand the sale of bonds would even further increase the recession, as there will be more cash crunch in the economy. A decrease in reserve ratio will be a long time taking solution, so it would not provide an immediate solution.
MCQ
But, if the fed interferes with the short run equilibrium in the hope of giving short run benefits, it will hamper the economy's natural process to attain a new equilibrium as discussed in the paragraph above. Hence, option D is the correct answer
Option A and C are incorrect, because, employment is not much affected with lowering of income tax. On, the other hand, inflation levels rise, when there is a cut in income tax, as it gives more currency in the economy, hence even C is incorrect.
IE 3-5 ... Interactive Exercises – If an Equilibrium Price of $2.00 results in the longer run from a right shifting of both Supply and Demand behaviors, then Employment in the Mini-economy will be __________ and Quantity of Goods Produced will be _________ ..
Answer:
132 people.
3100 units
Explanation:
Generally, a change in the equilibrium price of goods and services tends to affect the behaviors of demand and supply. For the system above, we have:
IE 3-5 ... Interactive Exercises – If an Equilibrium Price of $2.00 results in the longer run from a right shifting of both Supply and Demand behaviors, then Employment in the Mini-economy will be __132__people______ and Quantity of Goods Produced will be ___3100__units____ .
Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2017, and it will be ready for use on September 1, 2017. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Prepare three depreciation tables for 2017, 2018 and 2019: one for straight-line depreciation , one for double-declining balance depreciation, and one for units-of-activity depreciation. For units-of-activity, Natalie estimates she will drive the van as follows: 15,000 miles in 2017; 45,000 miles in 2018; 50,000 miles in 2019; 50,000 miles in 2020; and 40,000 miles in 2021. Recall that Cookie Creations has a December 31 year-end.
Double-declining-balance depreciation: What is just the NBV (Beg. of Year) for 2017, 2018, and 2019?
The net book value for the van at the beginning of 2017, 2018 and 2019 is $40,500, $24,300 and $14,580 respectively using the double-declining balance depreciation method.
Explanation:
To calculate the net book value (NBV) for the years 2017, 2018, and 2019, we need to determine the initial cost of the van and the residual value at the end. In this case, the initial cost includes the purchase price of the van ($36,500), the cost of painting the van ($2,500), and the cost of the seat removal and installing shelving units ($1,500). So, the initial cost is $40,500. The residual value after 5 years is the expected selling price of the van, which is $7,500.
Next, before we can calculate the depreciation and subsequent NBV with double-declining balance depreciation, we calculate the straight-line depreciation rate. It is 1/5 (or 20%) because the van will last 5 years. The double-declining balance rate is then 2 times the straight-line rate, which gives us a rate of 40%. Unlike other methods, initial NBV with double-declining balance starts depreciating right from the beginning, so NBV at the beg. of 2017 is $40,500.
In 2018, the depreciation would be 40% of the NBV at the beg. of 2018 ($40,500 - $16,200), which gives us $24,300. In 2019, it is 40% of the NBV that year ($24,300 - $9,720), thus resulting in $14,580 as the NBV Beg. of 2019, before depreciation is taken again for 2019.
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Suppose we are interested in bidding on a piece of land and we know one other bidder is interested. The seller announced that the highest bid in excess of $10,000 will be accepted. Assume that the competitor's bid x is a random variable that is uniformly distributed between $10,000 and $15,000.
(a) Suppose you bid $12,000. What is the probability that your bid will be accepted? If required, round your answer to two decimal places.
(b) Suppose you bid $14,000. What is the probability that your bid will be accepted? If required, round your answer to two decimal places.
(c) What amount should you bid to maximize the probability that you get the property?
Answer:
Explanation:
f(x) = (1/(15,000-10,000))/0 (elsewhere) = 1/5000
a. What is the probability that a $12,000 bid will be accepted?
P(10,000 < x < 12,000) = 2000(1/5000) = 0.40
b. What is the probability that a $14,000 bid will be accepted?
P(10,000 < x < 14,000) = 4000(1/5000) = 0.80
c. What amount should you bid to maximize the probability that you get the property?
$14,000 is my answer.
$14000 bid has a higher probability, hence a greater chance of being accepted
The probability that a $12,000 bid will be accepted is 40%, while a $14,000 bid has an 80% chance of being accepted. To maximize the probability of securing the property, one should bid just over $15,000.
Explanation:When considering the probability that a bid for a piece of land will be accepted, we assume the competitor's bid is uniformly distributed between $10,000 and $15,000. For the bid to be accepted, it must be higher than the competitor's bid, x.
(a)If you bid $12,000, the probability that this bid exceeds the competitor's bid is the portion of the uniform distribution from $10,000 to $12,000. Since the competitor's bids are uniformly distributed, it's a simple linear calculation: the probability is ($12,000 - $10,000) / ($15,000 - $10,000) = $2,000 / $5,000 = 0.4 or 40%.
(b) If you bid $14,000, we apply the same principle. The probability your bid will be accepted is ($14,000 - $10,000) / ($15,000 - $10,000) = $4,000 / $5,000 = 0.8 or 80%.
(c) To maximize the probability of getting the property, you should bid slightly more than the maximum of the competitor's bid range, which is slightly more than $15,000.
Which of the following statements about the advertising-to-sales ratio approach to budgeting for marketing communications is TRUEa. It is reliable because it does not vary dramatically across product categories. b. It can be calculated easily without having to analyze customers, competitors, and other contextual factors. c. It is easy to use because revenue projections can be made without considering marketing support. d. It relies on projections of revenue and expenses. e. All of the answers are correct
Answer:
The correct answer is letter "D": It relies on projections of revenue and expenses.
Explanation:
The advertising-to-sales ratio is a numeric value indicating how good the publishing strategies of a firm are. According to this approach, having a low ratio is considered optimal because it implies the advertisement helped increase the number of sales exponentially compared to the investment made. In other words, the ratio measures if the publication was successful in terms of revenues over expenses.
The correct statement that is made about the advertising-to-sales ratio approach is that It relies on projections of revenue and expenses.
What is the advertising-to-sales ratio approach?This is done in order to show if the resources that a firm uses for its advertising has helped them have more sales and the extent to which the sales have been generated.
To get this, the cost of advertising has to be divided by the sales revenue.
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Natalie is thinking of repaying all amounts outstanding to her grandmother. Recall that Cookie Creations borrowed $2,000 on November 16, 2017, from Natalie's grandmother. Interest on the note is 9% per year, and the note plus interest was to be repaid in 24 months. Recall that a monthly adjusting journal entry was prepared for the months of November 2017 (1/2 month), December 2017, and January 2018. (a) Calculate the interest payable that was accrued and recorded to January 31, 2018. Round to nearest dollar. (b) Calculate the total interest expense and interest payable from February 1 to August 31, 2018. Prepare the journal entry at August 31, 2018, to bring the accounting records up to date. Round to nearest dollar. (c) Natalie repays her grandmother on September 15, 2018-10 months after her grandmother extended the loan to Cookie Creations. Prepare the journal entry for the loan repayment.
Answer:
Cash 2,000 debit
Note payable 2,000 credit
--to record signing of the note--
interest expense 7.50 debit
interest payable 7.50 credit
--adjustment for the half-month--
interest expense 15 debit
interest payable 15 credit
--adjustment for december-
interest expense 15 debit
interest payable 15 credit
--adjustment for january-
interest expense 105 debit
interest payable 105 credit
--adjustment for August 31th-
Note payable 2,000 debit
interest payable 142.5 debit
interest expense 7.5 debit
cash 2,150 credit
--to record honor of the note--
Explanation:
interest for half-month :
2,000 x 9% x 0.5 / 12 = $7.50
interest for a month :
2,000 x 9% x 1/12 = $15.00
For February 1st to August 31th:
$15 dollar per month x 7 months = $105
honor of the note at September 15th:
nterest for half-month :
2,000 x 9% x 0.5 / 12 = $7.50
Total interest accrued: 7.5 + 15 + 15 + 105 = 142.5
Answer:a) interest payable $540, b) total interest expense for seven months $1,260, interest payable $2,520, c) loan repayment interest after 10 month $1,800
Total amount repaid $3,800
Explanation:
To calculate the simple interest on the loan
SI = Principal × Rate × Time/100
Principal =$2,000, Rate = 9%, T = 24 months
2,000 × 9 × 24/100
= 432,000/100
= 4,320
Amount = interest + Principal
4,320 + 2000 = 6,320
To calculate the monthly interest
4,320÷ 12 = 360
Therefore the amount interest payable accrued recorded
= 360,× 1/2
= 180 each month
For November, December, January will be
180 ×3 = 540
Journal entry
Interest expense Dr : $540
Interest payable. Cr :$540
b)
To calculate interest expense, we use the formula
Principal =$2,000 Rate = 9%, T = 7 months
P × R × T / 100
2000 × 9 × 7 /100
= 126,000÷ 100
= 1,260
Therefore to calculate interest payable, Since the simple interest
= $4,320, we will first calculate for the monthly interest
4,320÷12 = 360
Therefore the interest payable for 7 months
= 360 × 7
= 2,520
Journal entry
Interest payable Cr : $2,520
Less Interest expenseDr : $1260
Balance c/d Dr :$ 1,260
Total balance Dr $2,520, Total balance Cr : $2,520
c)
To calculate the repayment of the loan by Natalie ten month after the grandmother extended the loan. Using the formula SI = Principal × Rate × Time /100
Principal = $2,000, Rate 9%, Time = 10 months
2,000 × 9 × 10 / 100
= 180,000 ÷ 100
= 1,800
Amount = interest + Principal
= 1,800 + 2,000
= 3,800
Journal entry
Loan account Dr: $2,000
Loan interest Dr: $$1,800
Bank Account Cr: $3,800
Total balance Dr :$ 3,800 ,
Total balance Cr: $3,800
On January 1, GHI Corporation issued four-year bonds with a face value of $100,000. The bonds have a stated interest rate of 4 percent. When the bonds were issued, the market interest rate was 5 percent. The bonds pay interest once per year on December 31. Determine the amount that GHI received at issuance. Your answer should be rounded to the nearest full dollar (i.e., no cent
Answer:
Year Cashflow DF@5% PV
$ $
1 4,000 0.9524 3,809.60
2 4,000 0.9070 3,628.00
3 4,000 0.8638 3,455,20
4 104,000 0.8227 85,560.80
Market price of the bond 96,454
The amount that GHI received at issuance is $96,454.
Explanation:
In this case, we need to calculate the current market value of the bond. The annual coupon is calculated as R = 4% x $100,000 =$4,000, which is 4% of the face value. We will discount the annual coupon and face value of the bond at 5% market interest rate. The cashflow for year 4 is the aggregate of coupon and face value of the bond. The current market value of the bond calculated above is the amount that GHI received at issuance of the bond.
GHI Corporation received $92,278 at issuance for the four-year bonds with a face value of $100,000.
Explanation:GHI Corporation received $92,278 at issuance for the four-year bonds with a face value of $100,000. To determine the amount received at issuance, we need to calculate the present value of the future cash flows associated with the bonds. Since the market interest rate was 5 percent and the stated interest rate on the bonds was 4 percent, the bond price will be less than the face value.
Using the present value formula:
Bond price = Coupon payment / (1 + i) ^ n
Coupon payment = $100,000 x 4% = $4,000i = 5% (market interest rate)n = 4 (number of years until maturity)Plugging in these values into the formula:
Bond price = $4,000 / (1 + 0.05) ^ 4 = $92,278 (rounded to the nearest dollar).
Therefore, GHI Corporation received $92,278 at issuance for the four-year bonds.
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Electric, Inc. was incorporated on January 1, 2016. Electric issued 7 comma 000 shares of common stock and 1 comma 200 shares of preferred stock on that date. The preferred stock is cumulative, $ 100.00 par, with an 10% dividend rate. Electric has not paid any dividends yet. In 2019, Electric had its first profitable year, and on November 1, 2019, Electric declared a total dividend of $ 50 comma 000. What is the total amount that will be paid to preferred shareholders?
Answer:
$48,000
Explanation:
The computation of the total amount paid to the preferred shareholder is shown below:
= Number of preferred stock shares × par value × dividend rate × number of years
= 1,200 shares × $100 × 10% × 4 years
= $48,000
Simply we multiplied with the number of preferred stock with the par value, its dividend rate and the time period so that the correct value can come
All other information which is given is not relevant. Hence, ignored it
Over the past few years, airlines have tended to compete in the market for intercontinental business class travelers on the basis of:_________
A) price.
B) cost.
C) timeliness of their flight schedules.
D) amenities
Answer:
(D) Amenities
Explanation:
Airlines business is very competitive and capital-intensive. Because of its capital-intensive nature, fixed costs and barriers to exit are high. And the way of competing in the market for intercontinental business class travelers is on the basis of amenities.
J. D. formed Clampett, Inc. as a C corporation (calendar tax year) with J. D., Granny, and Jethro, Inc. (a C corporation) as shareholders. On January 15, 2018, Jethro, Inc. sold all its shares to Jane Hathaway. On February 28, 2018, Clampett, Inc. filed an S corporation election, with J. D., Granny, and Jane all consenting to the election. What is the earliest effective date of the S election? A) January 1, 2018. B) January 1, 2019. C) January 1, 2020. D) February 28, 2019. E) Never.
Answer:
B) January 1, 2019
Explanation:
The earliest effective date of the S election after all the shareholders have consented to the election occurs on the first day of the first calendar year following the year that the corporation first had shareholders.
HVAC Services Inc. employs two hundred workers. Workers who lose their jobs with HVAC may have a right to continued health-care coverage under the company’s group plan. If so, the premiums for the continued coverage are paid by
a. the employer.
b. the still-employed workers.
c. the unemployed workers.
d. the federal government.
Answer:
The correct answer is letter "C": the unemployed workers.
Explanation:
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) passed in 1985, employers who hire 20 or more workers are subject to provide healthcare benefits up to 36 months to their employees after termination of employment caused because of different reasons. In those cases, the ex-workers are responsible for the payment of their premiums.
What are the roles of actual returns and expected returns in investment planning?
Answer:Actual returns is the actual gain or loss an investor gets on an investment while Expected return is the return an investor is expected to get on an investment which can be positive or negative.
Explanation: Actual returns is the return an investor actually receives on his investment which can affects its net worth positively or negatively. It can be referred to as the internal rate of return on an investment.
Expected return is also known as anticipated rate of return. It is not certain but it is an expectation. It can be calculated as the expected value of an investment. It is used to calculate the viability of an investment. It is historical in nature and therefore it does not have a guaranteed outcome.
Many people have argued that the skills needed to be successful in today's workforce have changed. What skills do you feel an individual needs to be successful in a job today? Why do you feel these skills are most important?
Answer:
the skills of:
1) Basic Technology
2) Communication
3) Problem Solving
4) Collaboration
5) Adaptability
6) Multitasking
7) Social Media
Explanation:
Successful employees have common and detailed career goals and plans. Those who do not, however, prefer to flow in their work lives. The person with goals has a strong internal motivation. They are not discouraged when they fail. It is difficult to separate these people from their work and distract them. A person with goals is already motivated for development. Most importantly, an employee with clear goals often has a clearly defined career and development plan, and he already knows what tools, skills and qualifications will help him in that sequence. A person without goals is like a piece of water moving in the direction of sea waves and winds. Wherever the wind blows or where the waves drive, they will go there.
We could say that five general skills that workers say are most important when it comes to getting hired and being successful in the workplace:
Ability and willingness to learn new skills
Critical thinking and problem solving
Collaboration and team work
Interpersonal communication
Ability to analyze and synthesize information.
More specifically, we can list the most important ones nowadays, the skills of:
1) Basic Technology
2) Communication
3) Problem Solving
4) Collaboration
5) Adaptability
6) Multitasking
7) Social Media
Joni is considering job offers from two companies. Company A offered her a starting salary of $54,660 with a 4.8% raise at the end of each year. Company B offered her a starting salary of $61,400 with a raise of $2400 at the end of each year. What is the ratio of Joni's salary one year compared to her salary in the previous year for Company A?
Answer:
1.048
Explanation:
Data provided in the question:
Starting salary offered by company A = $54,660
Raise in salary by company A = 4.8% = 0.048
Starting salary offered by company B = $61,400
Raise in salary by company A = $2400
Now,
Amount of raise in the salary offered by company A
= 4.8% of $54,660
= 0.048 × $54,660
= $2,623.68
Therefore,
Salary after 1 year in company A
= Starting salary + Amount of raise in the salary
= $54,660 + $2,623.68
= $57,283.68
Therefore,
The ratio of Joni's salary one year compared to her salary in the previous year for Company A
= $57,283.68 ÷ $54,660
= 1.048
Final answer:
The ratio of Joni's salary one year compared to her salary in the previous year for Company A after a 4.8% raise is the new salary divided by the original salary, which is approximately $57,283.68 / $54,660 when calculated.
Explanation:
The student is asking about calculating the ratio of Joni's salary one year compared to her salary in the previous year for Company A. To determine this, we calculate the percentage increase in Joni's salary. Company A offers a 4.8% raise each year.
To express the new salary as a ratio relative to the original salary: Her new salary is her original salary plus 4.8% of her original salary. In other words, Joni's new salary will be 104.8% of her original salary, since 100% represents her original salary and the 4.8% is the raise.
Mathematically, this can be represented as:
Original salary = $54,660New salary = Original salary + (4.8/100) \ imes Original salaryNew salary = $54,660 + ($54,660 \ imes 0.048)New salary = $54,660 + $2,623.68New salary = $57,283.68The ratio of the new salary to the original salary is therefore $57,283.68 / $54,660, which can be simplified.
Consider the short run and the long run time frames used in macroeconomics. The definition of the short run is Select one: a. The time period when supply of money is fixed b. The time period when the labor force participation rate is fixed c. The time period before the economy has fully adjusted to an unexpected change in aggregate demand d. The time period when inflation is positive
Answer:
The time period before the economy has fully adjusted to an unexpected change in aggregate demand
Explanation:
The time period before the economy has fully adjusted to an unexpected change in aggregate demand.
In the long run, all inputs become variable and thus capital and investment can be added to the production functions to adjust for increased demand. However, in the short run only labor is a variable factor and thus for an increase in aggregate demand there is a time lag and other factors cannot adjust to account for increased demand. In the long run, these factors adjust and form a long run equilibrium when the lag is settled.
Hope that helps.
Chang Corp. has $375,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $515,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15.0%. What profit margin would the firm need in order to achieve the 15% ROE, holding everything else constant?
a. 10.92%
b. 9.41%
c. 11.82%
d. 8.11%
e. 12.66%
Answer:
Profit Margin = 10.92%
so correct option is a. 10.92%
Explanation:
given data
assets = $375,000
sales = $515,000
net income = $25,000
return on equity = 15.0%
ROE = 15%
to find out
What profit margin would the firm need
solution
we know that Profit Margin is
profit margin = Net Income ÷ Sales .............1
here Net Income is = Common Equity × ROE
net income = $375,000 × 15%
so from equation 1
Profit Margin = [tex]\frac{375,000*0.15}{515000}[/tex]
so
Profit Margin = 10.92%
so correct option is a. 10.92%
Chang Corp. would need a profit margin of 10.92% to achieve a 15% return on equity, by calculating the target net income based on their assets and applying it to their sales. The correct answer is a.
Explanation:To find the profit margin needed for Chang Corp. to achieve a 15% return on equity (ROE), we first calculate the target net income for a 15% ROE. This is done by multiplying the total equity, which is the same as the total assets in this case because the company has zero debt, by the target ROE percentage.
Target net income = Total assets × Target ROE
Target net income = $375,000 × 15%
Target net income = $56,250
Now, we calculate the profit margin by dividing the target net income by the sales, and then multiplying by 100 to get the percentage.
Profit margin = (Target net income / Sales) × 100
Profit margin = ($56,250 / $515,000) × 100
Profit margin = 10.92%
The firm would need a profit margin of 10.92% in order to achieve the 15% ROE, holding everything else constant.
Quasi Contract Middleton Motors, Inc.. a struggling Ford dealership in Madison, Wisconsin. sought managerial andfinancial assistance from Lindquist Ford, Inc. a successful Ford dealership in Bettendorf, Iowa. While the two dealershipsnegotiated the terms for the services and a cash infusion, Lindquist sent Craig Miller, its general manager. to assumecontrol of Middleton. After about a year. the parties had not agreed on the terms, Lindquist had not invested any money.Middleton had not made a profit. and Miller was fired without being paid. Lindquist and Miller filed a suit in a federaldistrict court against Middleton based on quasi contract, seeking to recover Miller’s pay for his time. What are therequirements to recover on a theory of quasi-contract? Which of these requirements is most likely to be disputed in thiscase? Why? [Lindquist Ford, Inc. v, Middleton Motors. Inc, 557 F.3d 469 (7th Cir. 2009)]
Answer:
Quasi Contract:
In the case of Lindquist Ford, Inc. v. Middleton Motors, Inc., 557 F.3d 469 (7th Cir. 2009) the trial court settled money damages to Lindquist. The Court of Appeals reversed the result that the trial court had mismanaged the mutual law theories of quantum meruit and unjust augmentation and imprisoned for a new trial. The trial court settled damages to Lindquist and Miller for Miller's salary.
Explanation:
The necessities to improve on the quasi-contract theory are as follows:
The party looking for damages discussed a benefit on the other party. That party also discussed the benefit with the sensible expectation of being paid. The party was not performing as a volunteer in providing this benefit. The party getting the benefit would be irrationally enriched if permitted to retain the benefit without disbursing for it.All of these necessities must be encountered in order for a quasi-contract judgment to be awarded.
The necessities under unjust improvement are as follows:
A benefit discussed upon the perpetrator by the plaintiff. Appreciation by the respondent of the fact of such benefit. Acceptance and retention by the respondent of the benefit, under conditions such that it would be discriminatory to retain the advantage without payment of the worth thereof.Lindquist met the essentials required for unjust enhancement and the court fund in their favor.
The necessities under quantum merit are as follows:
The complainant must prove that the respondent requested the plaintiff's services. It was reasonable for the applicant to expect reimbursement for the services. Lindquist met the elements compulsory for quantum meruit and the court found in their favor.The condition most likely to be doubtful in this case is whether or not the party seeking compensations actually discussed a benefit upon the other party, or whether Lindquist essentially conferred a benefit upon Middleton through the management of Miller. The court resolute through indication presented that Lindquist and Miller had a reasonable anticipation to payment for services rendered and that Middleton received a benefit from Miller's services
Final answer:
In Lindquist Ford, Inc. v. Middleton Motors, Inc., the court would need to determine if the requirements for a quasi-contract have been met, especially whether it is inequitable for Middleton to retain management benefits without payment.
Explanation:
In the case of Lindquist Ford, Inc. v. Middleton Motors, Inc., the concept of a quasi-contract is discussed. A quasi-contract, also known as an implied-in-law contract, is designed to prevent unjust enrichment. It is not a true contract, but rather a legal substitute formed to impose equity between two parties.
To recover on a theory of quasi-contract, certain requirements must be met: (1) a benefit conferred upon the defendant by the plaintiff, (2) the defendant's appreciation or knowledge of the benefit, and (3) the defendant's acceptance or retention of the benefit under circumstances making it inequitable for them to retain the benefit without paying for it.
In the situation with Lindquist and Middleton, the most disputed requirement is likely to be whether it is inequitable for Middleton to retain the benefit of Miller's management without paying. Since the parties did not finalize an agreement and Miller was fired without being paid, determining the equity of the situation could be challenging.
Your college is considering renting space in the student union to one or two commercial textbook stores. The rent the college can charge per square foot of space depends on the profit (before rent) of the firms and hence on whether there is a monopoly or a duopoly. Which number of stores is better for the college in terms of rent? Which is better for students? Why?
Answer and explanation:
In both cases, in terms of rent and terms of students benefits, it will be better for the college to have two stores, In that way, the college makes sure the profits will be higher than just by having one store on campus and students are benefited because of the variety of books they could find in the two stores, not just in one.
At the price of $5 per pack of batteries, Duracell sells 10,000 packs of batteries and Energizer sells 15,000 packs of batteries. When the price rises to $7.50, Duracell sells 12,000 packs of batteries and Energizer sells 16,000 packs of batteries. What is the market supply at $7.50? Question 11 options: A.12,000 B. 16,000 C. 4,000 D. 28,000 E. 25,000
Answer:
D.28000
Explanation:
Lets first understand what market supply is? Market supply is the accumulation/aggregation of total supply made by individual suppliers/vendors who are willing to provide at the current/prevailing prices. The market supply basically reflects the willingness of the vendors to supply goods/services at a given rate. Market supply can be either expressed in monetary terms or in terms of quantity.
So the market supply at $7.50 is as follows:
Market supply @ $7.50 = 12000 + 16000
Market supply @ $7.50 = 28000
It can be generally agreed that an increase in price can lead to an increase in supply by vendors, owing to the fact that the suppliers find a greater margin for themselves. Now in this question, we can see that at the price of $5 per pack of battery Duracell and Energizer sell 10000 and 15000 packs respectively and when the price rises to $7.50 both Duracells and Energizer sell more than what they were selling at $5 per pack.
The market supply of batteries at $7.50 is the sum of the quantities supplied by Duracell and Energizer, which is 28,000 packs.
The market supply at the price of $7.50 is the total quantity of battery packs supplied by both Duracell and Energizer at that price point. Duracell sells 12,000 packs and Energizer sells 16,000 packs when the price is $7.50. To find the market supply, we simply add these two quantities together: 12,000 packs (from Duracell) + 16,000 packs (from Energizer) = 28,000 packs. Therefore, the market supply at $7.50 is 28,000 packs of batteries.
nformation concerning Johnston Co.'s direct materials costs is as follows: Standard price per pound $ 6.45 Actual quantity purchased 2,850 pounds Actual quantity used in production 2,750 pounds Units of product manufactured 700 Materials purchase-price variance–favorable $ 855 Budget data for the period: Units to manufacture 1,000 Units of direct materials 4,000 pounds The direct materials usage variance for the period, rounded to two decimal places, is:a. $713. b. $713. c. $6.50 d. $6.12 e. $6.75 f. $615 g. $6.15
Answer:
f. $615
Explanation:
The standard cost for 2,850 pounds is $18,328.5 (=$6.45 * 2,850)
Materials purchase-price variance–favourable $855; it means standard price is higher and actual material price. Then we have actual cost for purchased 2,850 pounds is $17,527.5 (=$18,328.5-$855)
Then the actual price per pound $6.15 (=$17,527.5/2,850)
The difference between purchased and actual quantity used is 100 pounds (= 2,850 pounds - 2,750 pounds)
The direct materials usage variance for the period is $650 (= $6.15 * 100 pounds)
A partnership agreement provides that, at sale, cash proceeds are distributed first to Ms. Jones in an amount equal to her original investment less any cash distributions previously received, then split 60%-40% between Ms. Jones and Mr. Smith, respectively. Assume that the cash flows from sale are $1 million. How much would Ms. Jones receive if her initial investment was $600,000 and she previously received $100,000 in distributions
Answer:
$800,000
Explanation:
The total amount received by Ms. Jones (A) is given by the following expression:
[tex]A = I-D + (S-(I-D))*0.6[/tex]
Where 'I' is Ms. Jones initial investment, 'D' are cash distributions previously received and 'S' is the cash flow from sales.
The amount received by Ms. Jones is:
[tex]A = 600,000-100,000 + (1,000,000-(600,000-100,000))*0.6\\A= 800,000[/tex]
She would receive $800,000.
Highland Industries makes custom yachts using a job cost accounting system. In anticipation of a busy year for 2019, Highland’s accountant estimated the following overhead costs for 2019: Machinery maintenance $181,350 Utilities $226,380 Supervision $191,000 Materials handling cost $67,000 Building occupancy costs $98,270 Indirect materials $31,650 In the past, Highland has used direct labor hours to allocate overhead to the various yacht building jobs and they anticipate using the same for 2019. Highland anticipates using a total of 72,000 direct labor hours in 2019. At the beginning of 2019, Highland had no yachts in process or finished but did have $202,000 in raw materials left over from 2018. During 2019, Highland began work on 3 yachts (A, B, C). They also purchased and paid for $2,355,000 in raw materials. The predetermined overhead rate using direct labor hours for 2019 would be:
Answer:
predetermined overhead per direct labor hour: $11.02
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
To solve for overhead rate we determinate the expected cost and distribute them over a cost driver which is, in this case; direct labor hours
Expected overhead cost:
Machinery maintenance $ 181,350
Utilities $ 226,380
Supervision $ 191,000
Materials handling cost $ 67,000
Building occupancy costs $ 98,270
Indirect materials $ 31,650
Total overhead: $ 795,650
Total direct labor: 72,000
Overhead rate: 795,650 / 72,000 = 11.0206944= $11.02
Howard Cooper, the president of Glacier Computer Services, needs your help. He wonders about the potential effects on the firm’s net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal year 2019: Standard rate and variable costs Service rate per hour $ 60.00 Labor cost 32.00 Overhead cost 5.76 Selling, general, and administrative cost 3.44 Expected fixed costs Facility maintenance $ 320,000 Selling, general, and administrative 120,000 Required Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 30,000 hours of services in 2019. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant’s analysis, if Glacier charges customers $56 per hour, the firm can achieve 38,000 hours of services. Prepare a flexible budget using the consultant’s assumption. The same consultant also suggests that if the firm raises its rate to $64 per hour, the number of service hours will decline to 25,000. Prepare a flexible budget using the new assumption.
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.
Final answer:
A pro forma income statement and two flexible budgets were prepared for Glacier Computer Services based on different service rates and expected service hours. The highest net income is achieved at a rate of $64 per hour with 25,000 service hours. Lowering the rate to $56 per hour for 38,000 service hours results in a lower net income.
Explanation:
Howard Cooper, president of Glacier Computer Services, wishes to understand how fluctuations in the service rate might affect the company’s net income. We need to prepare pro forma and flexible budgets based on differing service rates and projected service hours. To begin, we will create a master budget's pro forma income statement for the initial expectation of 30,000 service hours at a $60.00 rate per hour.
Master Budget (Initial):
Revenue: $60.00/hour × 30,000 hours = $1,800,000
Variable Costs (Labor + Overhead + SG&A): ($32.00 + $5.76 + $3.44)/hour × 30,000 hours = $1,236,000
Fixed Costs (Facility + SG&A): $320,000 + $120,000 = $440,000
Net Income: Revenue – Variable Costs – Fixed Costs = $1,800,000 – $1,236,000 – $440,000 = $124,000
Next, we'll prepare flexible budgets considering the consultant’s suggestions:
Flexible Budget (Service Rate $56/hour, 38,000 hours):
Revenue: $56.00 × 38,000 = $2,128,000
Variable Costs: ($32.00 + $5.76 + $3.44) × 38,000 = $1,578,880
Net Income: $2,128,000 – $1,578,880 – $440,000 = $109,120
Flexible Budget (Service Rate $64/hour, 25,000 hours):
Revenue: $64.00 × 25,000 = $1,600,000
Variable Costs: ($32.00 + $5.76 + $3.44) × 25,000 = $1,030,000
Net Income: $1,600,000 – $1,030,000 – $440,000 = $130,000
Comparing the net incomes of all budgets, raising the price to $64/hour for fewer hours results in a higher net income compared to the original master budget, while reducing the price to $56/hour leads to a decrease in net income despite more service hours.
Which of the following about economic growth is true? a - The fastest growing economies in the world (those with annual real growth rates of 3.5 percent or more) are mostly less developed countries. b - The fastest growing economies in the world are mostly high-income industrial countries. C - The slowest growing countries in the world, many of which are experiencing declines in per capita GDP, are less developed countries. d-Both a and c are true,
Answer:
d-Both a and c are true
Explanation:
Less developed countries in the world show both diverting behaviors. The fastest-growing economies in the world (above annual growth of 3.5%) are mostly less developed countries as China, India, and Panama. It is also true C, where the slowest growing economies in the world experiencing declines in per capita GDP are less developed countries too, like Venezuela and Siria
Options a and c are true, indicating that the fastest growing economies are mostly less developed countries, while many of the slowest growing ones with declines in per capita GDP are high-income nations.
Explanation:The correct answer to the question about economic growth is d-Both a and c are true. From the information provided, it is clear that the fastest growing economies are mostly less developed countries, as shown by the inclusion of countries with high growth rates in the 'fast growth club'. Examples include China and India, which have been experiencing growth rates significantly above the world average, particularly higher than those seen in high-income Western nations.
On the other hand, several high-income nations fall into the 'slow growth club', which means their economies are growing at a slower pace, sometimes only 2% per year or less. This includes advanced economies like the United States, France, Germany, Italy, and Japan. Therefore, while less developed countries are experiencing rapid economic growth, leading to a potential convergence with high-income countries, many high-income nations are experiencing slower economic growth rates.
Assuming no direct factory overhead costs (i.e., inventory carry costs) and $3 million dollars in combined promotion and sales budget, the Bit product manager wishes to achieve a product contribution margin of 35%. Given their product currently is priced at $35.00, what would they need to limit the material and labor costs to?
Answer:
they need to limit the material and labor costs to $22.75
Explanation:
given data
combined promotion = $3 million
contribution margin ratio = 35%
Selling price = $35 per unit
to find out
what would they need to limit the material and labor costs to
solution
we get here Contribution margin per unit that is express as
Contribution margin per unit = $35 × 35%
Contribution margin per unit = $12.25 per unit
and Variable cost will be
Variable cost = $35 - $12.25
Variable cost = $22.75 per unit
and we know Variable cost is also express as
Variable cost = Direct materials costs + Direct labor costs + Direct factory overheads ..............1
here direct factory overheads is 0 and Direct materials costs + Direct labor costs is $22.75
so put in equation 1
Variable cost = $22.75 + 0 = $22.75
so we can say that they need to limit the material and labor costs to $22.75
Planning for acquisition support activities and requirements that deal with fielding/deployment should begin as early as the: [Identify life cycle product support activities and requirements that deal with fielding/deployment (e.g., planning, coordination, organizing deployment teams, materiel release).]
A. Materiel Solution Analysis Phase
B. Engineering and Manufacturing Development Phase
C. Operations and Support Phase
D. Production and Deployment Phase
Option A, Materiel Solution Analysis Phase
Explanation:
The equipment answer Analysis part assesses potential solutions for a required capability in associate Initial Capabilities Document (ICD) and to satisfy the phase-specific Entrance Criteria for ensuing program milestone selected by the Milestone call Authority.
The MSA phase is critical to program fulfilment and attaining materiel readiness because it’s the first possibility to persuade systems sup-portability and affordability by using balancing technology opportunities with operational and sustainment requirements. During this phase, various options are analysed to select the materiel solution and broaden the Technology Development Strategy (TDS) to fill any era gaps.