Answer:
What is the NPV for the project if Yurdone's required return is 10 percent?
$358,000If Yurdone requires a return of 10 percent on such undertakings, should the firm accept or reject the project?
Yes, because the project's NPV is positive, which means that its IRR is higher than the required rate of return.At what constant growth rate would the company just break even if it still required a return of 10 percent on investment?
3.72%Explanation:
initial investment = $1,400,000
net cash inflow₁ = $87,900
perpetual growth rate = 5%
required rate of return = 10%
project's current intrinsic value = $87,900 / (10% - 5%) = $1,758,000
project's NPV = $1,758,000 - $1,400,000 = $358,000
$1,400,000 = $87,900 / (10% - g)
$1,400,000(10% - g) = $87,900
$140,000 - $1,400,000g = $87,900
$140,000 - $87,900 = $1,400,000g
$52,100 = $1,400,000g
g = $52,100 / $1,400,000 = 3.72%
You decide that you need more information on how employees feel about diversity, so you create a paper and pencil survey on employee attitudes toward diversity and ask managers to distribute it to current employees. If found to be present. What would be the most likely grounds for concern?
Answer:
Discrimination against women and other minorities
Explanation:
The most likely ground for concern would be Discrimination against women and other minorities.
Diversity in the workplace means that an organization employs a diverse team of persons that reflects the views of the society in which it exists and operates. Through diversity and inclusion, no employee is treated unfairly on account of their gender, race, ethnicity.
Discrimination in labor markets, occurs when workers who have the same skill levels by education, experience, and expertise receive different pay because of their race or gender.
Consider the markets for head sets, smart phones, cellular telephone service, and cell phone applications. Assume the market for headsets is controlled by many firms selling similar products, smart phone manufacturers use advertising to differentiate their products, only a few firms control a large portion of the cellular telephone service market, and cell phone applications are produced by many firms selling differentiated products.
Classify the market for each of the following mobile goods and services as either monopoly, oligopoly, monopolistic competition, or perfect competition.
Monopoly Oligopoly Monopolistic Competition Perfect Competition
Head sets
Smart phones
Cellular telephone service
Cell phone applications
Answer: Please see answer below
Explanation:
Headsets- perfect competition ---- This is because the market structure has many firms selling selling similar products, so there will be competition with the absence of price control by a particular firm.
Smart phones- monopolistic competition ---- This smart phone manufacturers use advertising to differentiate their products because even though the smart phones market here have many firms producing slightly same products , each firm has different products which cannot be perfectly substituted therefore operating in a monopolistic competitive medium
Cellular telephone service - oligopoly --- . In this Cellular telephone service market, there are a few firms that are selling either same or different services and so the few firms influence each other.
Cell phone applications - monopolistic competitions---- This is because many firms are selling different products and therefore decisions on price and the company depend on individual firm which leads monopolistic competition.
Suppose that each day, northern, central and southern California each use 100 billion gallons of water. Also assume that northern California and central California have available 120 billion gallons of water, while southern California has 40 billion gallons of water available. The cost of shipping one billion gallons of water between the three regions is as follows:
Northern Central Southern
Northern $5,000 $7,000 $10,000
Central $7,000 $5,000 $6,000
Southern $10,000 $6,000 $5,000
We will not be able to meet all demand for water, so we assume that each billion gallons of unmet demand incurs the following shortage costs:
Northern Central Southern
Storage cost/billion $6,000 $5,000 $9,000
gallon short
How should California’s water be distributed to minimize the sum of shipping and shortage costs?
Answer:
Presenta Don Quijote de la Mancha: autor,
fechas, tema, personajes.
2. Relata las diferentes etapas de la historia
de don Quijote de la Mancha.
3. Elige un adjetivo para calificar a don Quijote
y a Sancho Panza y justifica: aventurero,
razonable, loco, heroico, te
Explanation:
Presenta Don Quijote de la Mancha: autor,
fechas, tema, personajes.
2. Relata las diferentes etapas de la historia
de don Quijote de la Mancha.
3. Elige un adjetivo para calificar a don Quijote
y a Sancho Panza y justifica: aventurero,
razonable, loco, heroico, te
what does non current assets mean
Answer:
assets whose value is not realized in the current year
Explanation:
A noncurrent asset is generally a long-term investment whose value will not be fully realized in the current accounting year. The cost of the asset is allocated over the period the asset is in use, rather than being expensed in the year it is acquired.
Durable Plastics Company had the following total assets, liabilities, and equity as of December 31.Total Assets$ 450 comma 000Total Liabilities131 comma 000Total Equity319 comma 000What is the company's debt ratio as of December 31? (Round your percentage answer to two decimal places.)
Answer: Debt ratio = 29.11%
Explanation:
A company's Debt ratio explains the financial leverage of a company to paying off its liabilities using its assets by measuring a company's total liabilities as a percentage of its total assets.
Given ,
Total Assets $ 450,000
Total Liabilities $131, 000
Total Equity $319,000
Debt ratio = Total Liabilites /total asset x 100
=131000/450000 X 100
= 29.11%
Wit Company uses the weighted-average method in its process costing system. Information for the month of May concerning Department A, the first stage of the company's production process follows: Material costs are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. How would the costs be distributed? Goods completed and transferred out Ending work in proces
Answer:
Materials Conversion
Equivalent units of production
100,000 95,000
Cost per equivalent unit
$0.24 $0.20
Cost transferred out
$21,600 $18,000
Cost of ending work in process
$2,400 $1,000
Explanation:
Computation of how Wit Company costs will be distributed
Materials Conversion
Transferred to next department
90,000 90,000
Ending work in process:
10,000 5,000
The production Equivalent units
100,000 95,000
Materials Conversion
Begining Work in process
4,000 3,000
Cost added during the month
20,000 16,000
Total cost $24,000 $19,000
÷Equivalent units
100,000 95,000
Cost per equivalent unit
$0.24 $0.20
Materials Conversion
TotalUnits transferred out
90,000 90,000
×Cost per equivalent unit $0.24$0.20
= Cost transferred out
$21,600 $18,000 =$39,600
Materials Conversion
Equivalent units of production:
Ending work in process
10,000 5,000
×Cost per equivalent unit$0.24$0.20
Cost of ending work in process
$2,400 $1,000 =$3,400
Calculation for Ending work in progress
Materials 10,000 units × 100%complete
=10,000
Conversion
10,000 units × 50% complete
=5,000
Calculation for Cost per equivalent unit
Total cost
Material $24,000
Conversion $19,000
÷ Equivalent units
Material 100,000
Conversion 95,000
=
Material $0.24
Conversion $0.20
Consumption Ratios; Activity Rates Saludable Company produces two types of get-well cards: scented and regular. Drivers for the four activities are as follows:
Scented Cards Regular Cards
Inspection hours 1,080 720
Setup hours 420 180
Machine hours 960 2,880
Number of moves 2,880 720
The following activity data has been collected:
Inspecting products $45,000
Setting up equipment 28,500
Machining 30,720
Moving materials 16,200
Required:
1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.
Scented Cards Regular Cards
Inspection hours
Setup hours
Machine hours
Number of moves
2. Which of the following statements indicate there is product diversity?
Explain the significance of product diversity for decision making if the company chooses to use machine hours to assign all overhead.
If machine hours are used as the only driver, cards would receive 21% of the overhead, and cards would receive 79% of the overhead. Yet, the cards consume well over 53% of the non-machine related overhead. Thus, the Scented cards are , and the Regular cards are . This inaccuracy can adversely affect many decisions, including pricing, keep or drop, and cost-volume-profit.
3. Calculate the activity rates that would be used to assign costs to each product. Round your answers to the nearest cent.
Rates:
Inspecting products $ per inspection hour
Setting up equipment $ per setup hour
Machining $ per machine hour
Moving materials $ per move
4. Suppose that the activity rate for inspecting products is $20 per inspection hour. How many hours of inspection are expected for the coming year?
Answer:
Saludable Company
Consumption Ratios= Amount of Activity per driver /Total Driver Quantity
Scented Cards Regular Cards Total
A B C
Inspection hours 1,080 720 1800
Setup hours 420 180 600
Machine hours 960 2,880 3840
Number of moves 2,880 720 3600
Consumption Ratios
Scented Cards Regular Cards
A/ C B /C
Inspection hours 1,080/1800 720/1800
0.6 0.4
Setup hours 420/600 180/600
0.7 0.3
Machine hours 960/3840 2,880/3840
0.25 0.75
Number of moves 2,880/3600 720/3600
0.8 0.2
2. Diverse products consume activities in different amounts. When they are different product line with diversification the product cost may vary than the actual costs IF ABC is not used. ABC helps removal of un necessary amounts allocated and assigns actual costs incurred.
The Scented cards are more costly than the Regular card. If machine hours are used as the only driver,Scented cards cards would receive 21% of the overhead, and Regular cards would receive 79% of the overhead. This shows that Scented cards are under costed and Regualr Cards are over costed if ABC is not used.
3. Activity Rate= Activity Cost/ Cost Driver
Activity
Inspecting products /Inspection hours= $45,000/1800= 25 $ per inspection hour
Setting up equipment/Setup hours= 28,500/600= $ 47.5 per setup hour
Machining/Machine hours = 30,720/3840 = $8 per machine hour
Moving materials /Number of moves=16,200/3600 = $ 4.5 per move
4. Activity Rate= Activity Cost/ Cost Driver
$ 20= $ 45000/ Hours
Hours = $ 45000/20 = 2250 inspection hours are expected for the coming year.
The UCLA transportation economist Donald Shoup developed a formula to explain the rational maximum cruising time for parking. Calculate the cruising time elasticity (i.e., the point elasticity using calculus) with respect to the price (p). At a price of p=5 and m=12, what is the elasticity of c with respected to p? At this point, how will a 1% increase in p alter the maximum cruising time? Refer to the elasticity you calculated.
Answer:
The above elasticity suggests that by raising the curb parking price by 10% reduces the time drive are willing to cruise by only 7.1%. also the increase of curb pricing would make elasticity greater that shows that curb park pricing by 1% reduces the drivers that are willing to cruise by only 2.3 %
Explanation:
Solution
Given that:
Now, when we look at the papers designed by the economists for the various formulas of calculating elasticity related to six factors examples like, the price of off street parking, the price of fuel, the number of person or individuals in a car, the price of curb parking, time value, we would notice that the formula for calculating cruising time elasticity with that of curb parking price is stated below:
E = - p/(m-p)
E = -5/12-5
E = -5/7
=-0.714
The above elasticity states that by raising the curb parking price by 10% reduces the time drive are willing to cruise by only 7.1%
Now,
The new elasticity = -7/(10-7)
=-7/3
=-2.33 or 2.33%
It suggests that the increase of curb pricing would make elasticity greater that shows that curb park pricing by 1% reduces the drivers that are willing to cruise by only 2.3 %
Blossom Corporation, a manufacturer of ethnic foods, contracted in 2020 to purchase 470 pounds of a spice mixture at $2.35 per pound, delivery to be made in spring of 2021. By 12/31/20, the price per pound of the spice mixture had risen to $2.73 per pound. In 2020, Blossom should recognize:______.
A. No gain or loss.
B. A gain of $178.60.
C. A loss of $1104.50.
D. A loss of $178.60.
Answer:
No gain or loss.
Explanation:
Given:
Amount of spice mixture = 470 pound
Current price = $2.35 per pound
Future price = $2.73 per pound
Computation:
We know that, Future price of spice mixture is higher than current price of spices.
But contract price is fixed at $2.35.
Therefore, no gain or loss will be recognized.
Answer:
A. No gain or loss.
Explanation:
Relevant data provided as per the question is shown below:-
Spice mixture = $2.73 price per pound
Initial contract price = $2.35
Here the spice mixture is $2.73 price per pound as on 31 December 2020 is higher than the initial contract price $2.35, so no gain or loss should be recognized.
Therefore option A is correct.
Artville is deciding whether to purchase a new statue for the center of town. The statue will cost the city $17,000 and will only be purchased if the costs are covered. The city is asking for households to help cover the cost of the statue, but households are not forced to contribute. Instructions: Enter your answer as a whole number.
Required:
a. If households are asked to contribute $5 each to help cover the cost of the statue, how many households will need to contribute?
b. If the population of Artville is 4,000 households, of which 3,000 households are expected to free ride, will the city be able to afford the statue if it charges each household $14?
Answer:
a. 3,400 households
b. No
Explanation:
a. The computation of the number of families is shown below:-
Total Cost = No.of families contributing × Amount each family contributing
$17,000 = No of families × 5
Number of families = $17,000 ÷ 5
= 3,400 households
b. According to the question, it is mentioned that Artville 's population is 4,000 of which 3,000 households are expected to travel freely, which means that these 3,000 people will not pay for the statue and the entire burden of the statue 's cost will fall on the left amount 1,000.
Total cost = No of households contributing × Amount each household pays
= 1,000 × $14
= $14,000
We may conclude that we will not be able to buy this statue because the sum raised is only 14,000, although we need $17,000 to buy the statue. To this question, the answer is "No".
The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The common stock was $120,000 and the retained earnings were $60,000 at April 1, the beginning of the current year. During the year, shareholders purchased an additional $25,000 in stock. Accounts payable $2,000 Miscellaneous expense $1,030 Accounts receivable 10,340 Office expense 1,240 Cash 21,420 Supplies 1,670 Fees earned 73,450 Wages expense 23,550 Land 47,000 Dividends 16,570 Building 157,630 Prepare a statement of stockholders' equity for the current year ended March 31. If a net loss is incurred or there is a decrease in stockholders' equity, enter that amount as a negative number using a minus sign. If an amount box does not require an entry, leave it blank. Thompson Computer Services Statement of Stockholders’ Equity For the Year Ended March 31 Common Stock Retained Earnings Total $ $ $ $ $ $
Answer:
$236,060
Explanation:
Thompson Computer Services Statement of stockholder's equity for the year ended March 31
Beginning common stock $120,000
Add:
Additional stock purchased $25,000
Retained earnings $60,000
Net income $47,630
Less: Dividends $16,570
Ending retained earnings $91,060
(60,000+47,630-16,570)
Ending stockholder's equity $236,060
(120,000+91,060+25,000)
Calculation of Thompson Computer Services Net income
Fees earned 73,450
Less:Miscellaneous expense $1,030
Office expense 1,240
Wages expense 23,550
Balance 47,630
A debit to Sales Returns and Allowances and a credit to Accounts Receivable: Multiple Choice Reflects an increase in amount due from a customer. Recognizes that a customer returned merchandise and/or received an allowance. Records the cost side of a sales return. Is recorded when a customer takes a discount. Reflects a decrease in amount due to a supplier.
Answer:
Recognizes that a customer returned merchandise and/or received an allowance.
Explanation:
When returning merchandise, sales return and allowances are debited to decrease sales and account receivable or cash is credited to refund / reduce cash company owes by the client. When a customer requires a cash refund, then we can only credit cash instead of account receivable because the debit entry is the same.
The journal entry is
Sales return and allowances XXXXX
To Account receivable XXXXX
(Being the sales return is recorded)
It only shows and records the returned merchandise
Baruk Industries has no cash and a debt obligation of $36 million that is now due. The market value of Baruk's assets is $ 81$81 million, and the firm has no other liabilities. Assume perfect capital markets. a. Suppose Baruk has 1010 million shares outstanding. What is Baruk's current share price? b. How many new shares must Baruk issue to raise the capital needed to pay its debt obligation? c. After repaying the debt, what will Baruk's share price be?
Answer and Explanation:
The given values are:
Debt obligation
= $36 million
Market value
= $81 million
Outstanding shares
= $10 million
(a)...
Net Assets of the firm will be:
= [tex]81 - 36[/tex]
= $[tex]45 \ million[/tex]
Now, the current share price will be:
= [tex]\frac{45}{10}[/tex] = $[tex]4.5 \ per \ share[/tex]
(b)...
Number of shares to be issued to repay debt obligation will be:
= [tex]\frac{36}{4.5}[/tex] = $[tex]8 \ million \ shares[/tex]
(c)...
The total number of outstanding shares will be:
= [tex]10+8[/tex]
= $[tex]18 \ million[/tex]
Now,
The Current share price will be:
= [tex]\frac{Net \ assets \ of \ the \ firm}{Total \ no \ of \ outstanding \ shares}[/tex]
= [tex]\frac{81}{18}[/tex]
= $[tex]4.5 \ per \ share[/tex]
Pitkins Company collects 20% of a month's sales in the month of sale, 70% in the month following sale, and 6% in the second month following sale. The remainder is uncollectible. Budgeted sales for the next four months are: Cash collections in April are budgeted to be: Select one: a. $321,000 b. $313,000 c. $320,000 d. $292,000
Answer:
Instructions are below.
Explanation:
Giving the following information:
Cash collection= 20% of a month's sales in the month of sale
Account sales= 70% in the month following sale, and 6% in the second month following sale.
The remainder is uncollectible.
We weren't provided with information regarding sales. I can invent some numbers to show how it's done.
Sales:
February= 200,000
March= 188,000
April= 213,000
Cash collection:
Sales in cash April= (213,000*0.2)= 42,600
Sales on Account March= (188,000*0.7)= 131,600
Sales on Account February= (200,000*0.06)= 12,000
Total cash April= $186,200
Determine which moral standard of social responsibility the business is observing.
Vivian’s company is considering building a huge new department store in a small town. The community argues that the store will disrupt local commerce and harm local business owners. Vivian argues that the store will save money for customers and bring more jobs to the community. Assume both arguments are true.
a. Stakeholder Theory Moral Standard
b. Profit-Maximizing Moral Standard
c. Indeterminable
d. Corporate Citizenship Moral Standard
e. Moral Minimum Standard
Answer:
The correct answer is the option A: Stakerholder theory moral standard
Explanation:
To begin with, the stakerholder theory states that there are a group of people whose interest must be taken as the major responsibility that the company must accomplish. This group comprehends the owners, the investors, the consumers, the suppliers, etc. Those are the stakeholders. Therefore that in the case where Viviana's company states that the store will save money, taking care of the interest of the consumers, and bring more jobs, taking care of the interest of the locals around the company is putting the interesent of the stakeholders first. And when the community argues that it will disrupt local commerce they states that the company is only focusing in the interest of the investors and owners. That is why, in both sides the stakerholders are benefited.
Answer:
Indeterminable
Explanation:
Q- Vivian's company is considering building a huge new department store in a small town. The community argues that the store will disrupt local commerce and harm local business owners. Vivian argues that the store will save money for customers and bring more jobs to the community. Assume both arguments are true. "
A- Indeterminable because assuming both arguments are true. We can not determine who is right because building a new department store creates job opportunities and saves money, but it also harms local business owners.
NOTE-But if Vivian's argument is true then it is stakeholder moral theory.
Select Indeterminable if both arguments are true assumed.
At the beginning of the year, Plummer’s Sports Center bought three used fitness machines from Advantage, Inc. The machines immediately
were overhauled, installed, and started operating. The machines were different; therefore, each had to be recorded separately in the accounts.
Machine A Machine B Machine C
Amount paid for asset $ 11,000 $ 30,000 $ 8,000
Installation costs 500 1,000 500
Renovation costs prior to use 2,500 1,000 1,500
By the end of the first year, each machine had been operating 4,800 hours.
Required:
1. Compute the cost of each machine.
Total Cost
Machine A
Machine B
Machine C
Required:
2. Prepare one entry to record depreciation expense at the end of year 1, assuming the following:
(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Estimates
Machine Life Residual Value Depreciation Method
A 5 years $1,000 Straight-line
B 60,000 hours 2,000 Units-of-production
C 4 years 1,500 Double-declining-balance
Answer: Please see below
Explanation:
Machine A Machine B Machine C
Amount paid for asset $ 11,000 $ 30,000 $ 8,000
Installation costs 500 1,000 500
Renovation costs prior to use 2,500 1,000 1,500
total cost $14,000 $32,000 $10,000
Machine Life Residual Value Depreciation Method
A 5 years $1,000 Straight-line
B 60,000 hours 2,000 Units-of-production
C 4 years 1,500 Double-declining-balance
for machne A, using Straight line Depreciation
Straight line Depreciation = total cost of asset - residual value /useful life
=14,000-1000/5= $,2,600
for machne b, using units of operation with production time = 4800
units of operation Depreciation= total cost of asset - residual value /useful life x Production time = ((32,000-2000)/60,000) x 4800= $2400
for machne b, using Double-declining-balance
Double-declining-balance depreciation = (cost of asset - accumulated depreciation/ useful life of asset) x 2 =(( $10,000- 0)/4) x2 = $5000
Journal for machine A at end of year 1
Account Debit Credit
depreciation expense $2600
accumulated depreciation $2,600
Journal for machine B at end of year 1
Account Debit Credit
depreciation expense $2400
accumulated depreciation $2,400
Journal for machine C at end of year 1
Account Debit Credit
depreciation expense $5,000
accumulated depreciation $5,000
1. The cost of each machine is computed as follows:
Machine A Machine B Machine C
Cost of machine $14,000 $32,000 $10,000
2. Depreciation Expenses $2,600 $2,400 $4,250
Journal Entries:
Debit Depreciation Expense $9,250
Credit Accumulated Depreciation:
Machine A $2,600
Machine B $2,400
Machine C $4,250
To record depreciation expense for the first year.
Data and Calculations:
Machine A Machine B Machine C
Amount paid for asset $ 11,000 $ 30,000 $ 8,000
Installation costs 500 1,000 500
Renovation costs prior to use 2,500 1,000 1,500
Total recognized costs $14,000 $32,000 $10,000
Residual Value $1,000 $2,000 $1,500
Depreciable amount $13,000 $30,000 $8,500
Estimated useful life 5 years 60,000 hours 4 years
Depreciation rate $2,600 $0.50 50% (100/4 x 2)
Depreciation methods S/L Production units Double-declining
Depreciation expense, Yr 1 $2,600 $2,400 $4,250 ($8,500 x 50%)
Calculations ($13,000/5) ($30,000/60,000 x 4,800)
Learn more: https://brainly.com/question/24194507
Your mom is thinking of retiring. Her retirement plan will pay her either $ 100 comma 000 immediately on retirement or $ 140 comma 000 five years after the date of her retirement. Which alternative should she choose if the interest rate is: a. 0 % per year? b. 8 % per year? c. 20 % per year?
Answer:
a.5 year plan will be chosen.
b.Immediately must be chosen
c.Immediately must be chosen
Explanation:
Present value of inflows = cash inflow / (1+r)^n
a. 0 % per year
Present value of inflows = $140,000 / (1)⁵
Present value of inflows = $140,000
5 year plan will be chosen.
b. 8 % per year
Present value of inflows = $140,000 / (1.08) ⁵
Present value of inflows = $140,000 / 1.469328
Present value of inflows = $95,281.6526
Immediately must be chosen
c. 20 % per year?
Present value of inflows = $140,000 / (1.20) ⁵
Present value of inflows = $140,000 / 2.48832
Present value of inflows = $56,262.8601
Immediately must be chosen
Sales of Granite City Products Inc. have been on a steady decline for the last 12 months. A market research study conducted revealed that the product of Granite City Products Inc. can be sold only for $420 as opposed to the current market price charged of $520 per unit. Granite City Products Inc. has decided to revise its sales price to $420. The annual sales target volume of the product after price revision is 280 units. Granite City Products Inc. wants to earn 30% on its sales amount. What is the target operating income?
Answer:
$35,280
Explanation:
For computation of the target operating income first we need to find out the profit per unit which is shown below:-
Profit per unit = Sales Price × Sales percentage
= $420 × 30%
= $126
Target Operating Income = Profit per unit × Annual Sales Target
= $126 × 280 units
= $35,280
Therefore for computing the target operating income we simply applied the above formula.
Jamie Dimon is the CEO and chairman of JPMorgan Chase. He has held both roles since 2005--that is, before, during, and after the financial crisis. Few executives on Wall Street are as respected and recognized, or as well compensated—for instance, in 2013 it was approximately $11.5 million; in 2014, $20 million; and in 2015, $27 million.
In one sense, this is typical of total executive compensation in the finance industry. Mr. Dimon's straight salary is often $1.5 million, and the rest (more than 90 percent) is tied to some measure of firm performance, such as stock price and profitability.
However, JPMorgan and others have come under considerable pressure for what the compensation package doesn't consider directly--ethics. During this same period, JPMorgan has settled legal claims in excess of $25 billion! A few notable examples include: $920 million for allowing traders to fraudulently overvalue investments and conceal losses; $1 billion related to securities fraud and concealment of losses in the "London Whale" trading fiasco (JPMorgan lost $6.2 billion apart from the fines); $13 billion in settlement of risky mortgages; and another $2 billion for not identifying the Madoff Ponzi scheme and the losses it caused its own investors.money
To be fair, Dimon's low $11.5 million year was intended to reflect his role related to the London Whale debacle, but this bonus reduction took place only due to pressure from Congress (Dimon earned $23 million the year before). Defenders of Dimon, and the JPMorgan board of directors who granted the pay, say he deserves such rewards for negotiating smaller fines and for producing industry-leading profitability. JPMorgan had record profits in 2015.
This scenario nevertheless raises an obvious question: Is JPMorgan's pay for performance really pay for profits without consideration of other activities that are costing it billions of dollars in penalties and fines? Dimon was CEO before, during, and since all of these billions in penalties were paid. He did not inherit the problems of a previous executive. And a corporate ethics monitoring group reported that since the financial crisis of 2008 "there appears to be no change in the frequency of the ethical issues facing the company which suggests different types of intervention are needed." The combination of these details leads some to argue that Dimon should be fired.
What Would You Do?
As you may know, the board of directors is ultimately responsible for the performance of the firm, its CEO, and all executives' compensation. With this in mind, assume JPMorgan replaced its entire board. You are now the chair, and Jamie Dimon is only the CEO. What would you recommend?
a. Would you fire Mr. Dimon outright or suggest some other changes to keep this from happening again? Defend your choice.
b. Your answer to #1 aside, what recommendations do you have for the CEO's compensation from here on? Explain.
c. Details of the case aside, describe how you could be sure pay-for-performance for the CEO also includes performance related to ethical conduct.
Answer: The answer is provided below
Explanation:
a. Ethics play a very important role in any organization. Ethics ensures the legitimacy and reputation of the organization. Therefore, it cannot be ignored that Mr. Dimon has disregarded the ethical norms when serving as the CEO and Chairman of JPMorgan. Even though the business is earning profits, such fraudulent and unfair business activities should not be acceptable by the company.
With regards to this, as the chairman, I would fire Mr. Dimon for his immoral way in conducting business activities. This will also set an example for others.
b) As far as the CEO's compensation is concerned, pay shouldn't be just for business performance or profits but also for ethical performance. A business without values and ethics cannot succeed in the long run. Even though profits are vital, they shouldn't be at the cost of morality and ethics.
Therefore, it is vital to compensate the CEO after considering every essential factors and not just on the basis of the businesss performance.
c) A proper Performance Analysis in an organization is made up of all the criterias required to measure the performance of both the company and the employees. Regarding the situation in the question, the ethical dilemma can be solved through the consideration of ethical conduct as an equal and important factor when evaluating pay for performance. Therefore, the pay for performance should include ethical and business aspects together which will lead to more transparency when assessing the compensation.
When Dave, the sales manager, is deciding on who will train the new sales trainee, he tries not to look at just the recent sales numbers but also checks past sales reports to determine who is the most productive. This way he is not affected by the ________ bias.
Answer:
Availability.
Explanation:
This is explained as the ability to process information that comes to the mind immediately trying to think lesser or neglect that which is not yet in mind. That was what Dave, could not phatom in the above description. This phenomenon ends up making people often judge the likelihood of an event, or frequency of its occurrence subtly with which instances and scenarios come easily to mind.
In business dealings for example, an over-estimation can be the likelihood of attacks by sharks or list accidents. Also, some smokers may see one elderly heavy smoker and exaggerate the likely healthy life expectancy of this group.
Nelson Industries warrants its products for one year. The estimated product warranty is 4.3% of sales. Sales were $475,000 for September. In October, a customer received warranty repairs requiring $215 of parts and $65 of labor. Required: 1. Journalize the adjusting entry required at September 30, the end of the first month of the current year, to record the estimated product warranty expense. 2. Journalize the entry to record the warranty work provided in October. If an amount box does not require an entry, leave it blank.
Answer:
Explanation:
The required journal is given below
1 Product Warranty Expense 20425 =475000*4.3%
Product Warranty Payable 20425
2 Product Warranty Payable 280
Supplies/Inventory 215
Wages Payable 65
Last year, Goran had $30,000 to invest. He invested some of it in an account that paid 7% simple interest per year, and he invested the rest in an account that paid 10% simple interest per year. After one year, he received a total of $2460 in interest. How much did he invest in each account?
Answer:
He invested $18,000 in the first account
he invested $12,000 in the second account
Explanation:
Let x represent the account that pays 7% simple interest
Let y represent the account that pays 10% simple interest
The sum of x and y gives a total investment of $30,000
x+y=30000..........1
From interest perspective , we have the below equation as well:
0.07x+0.10y=2460........2
From equation 1
x=30,000-y
substitute for x in equation 2
0.07(30,000-y)+0.10y=2460
2100-0.07y+0.10y=2460
0.03y=2460-2100
0.03y=360
y=360/0.03
y=$12,000
substitute for y in equation 1
x+12,000=30,000
x=30,000-12,000=$18,000
C. Urgent care admission, deductible is met Urgent care visit at Top Notch Urgent Care (out-of-network) Urgent care visit DOS: 07/04/2018 Allowable Charges = $230.00 Diagnosis: J02.0, Streptococcal pharyngitis Procedure: 99203, Level 3 clinic visit Procedure: 87880, Infectious agent antigen detection by immunoassay with direct optical observation; Streptococcus, group A Cost-sharing amount is _________
Answer:
$80.50
Explanation:
Calculation of Cost-sharing amount :
Using this formula
Allowed charges *out-of-network coinsurance percent
Where:
Allowed charges =$230.00
Out-of-network coinsurance percent =35%
Hence,
$230.00 * .35
= $80.50
Therefore the Cost-sharing amount will be $80.50
Data for Hermann Corporation are shown below:
Per unit Percentage of sale
Selling price $75 100%
expenses 51 68
contribution margin 24% 32%
Fixed expenses are $75,000 per month and the company is selling 4,000 units per month.
Required:
a. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%.
b. Should the higher-quality components be used?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling price= $75
expenses= $51
contribution margin= $24
Fixed expenses are $75,000 per month and the company is selling 4,000 units per month.
Higher quality:
Variable cost= $55
Increase in sales= 4,000*1.25= 5,000
First, we need to determine the effect on the income:
Effect on income= 1,000*(75 - 55) - 4,000*4
Effect on income= $4,000 increase
The higher quality component should be used because of income increase.
You plan to borrow $ 4 comma 000 from a bank. In exchange for $ 4 comma 000 today, you promise to pay $ 4 comma 160 in one year. What does the cash flow timeline look like from your perspective? What does it look like from the bank's perspective?
Answer:
Please check the attached image for the diagram
Explanation:
I would be borrowing $4000 from the bank. I would be $4,000 richer and the bank would have $4000 less.
In one year, I would be paying the bank $4160. So I would have $4160 less and the bank would be $4160 richer.
A negative sign indicates cash outflow and a positive sign indicates a cash inflow.
I hope my answer helps you.
In the ultimatum game, one reason players don't choose the rational offer is A. they are worse off by taking the offer. B. that there are too many possible outcomes to reasonably consider. C. most people believe in reciprocity, and will therefore get even if the prosper treats them badly. D. that it is not a Nash equilibrium.
Answer:
C. Most people believe in reciprocity, and will therefore get even if the prosper treats them badly.
Explanation:
In recent times, this game has formed to be a great experimental tool to economists where a certain amount of money is been divided into two equal halves between the proposer and the other player. It is noted that at the end of repeatedly playing the game, ten times in their experiment, players almost always converges to the initial median effort level of four or five.
And in the other hand, a reasonable amount of players believe in reciprocity, and will therefore get even if the prosper treats them badly.
Most of this games and its forms have a set of Pareto ranked pure strategy Nash equilibria, one for each possible effort level.
Buckeye Incorporated had the following trial balance at the beginning of November.BUCKEYE INCORPORATEDTrail BalanceAccounts Debits CreditsCash $ 2,800Accounts Receivable 800Supplies 1,200Equipment 9,000Accounts Payable $ 1,500Notes Payable 2,100Common Stock 5,100Retained Earnings 5,100--------------------------------------------------------------------------------The following transactions occur in November:November 1 Issue common stock in exchange for $13,000 cash.November 2 Purchase equipment with a long-term note for $4,300 from Spartan Corporation.November 4 Purchase supplies for $2,000 on account.November 10 Provide services to customers on account for $10,000.November 15 Pay creditors on account, $2,000.November 20 Pay employees $3,500 for the first half of the month.November 22 Provide services to customers for $12,100 cash.November 24 Pay $3,000 on the note from Spartan Corporation.November 26 Collect $5,000 on account from customers.November 28 Pay $1,900 to the local utility company for November gas and electricity.November 30 Pay $4,600 rent for November.Record each transaction in a general journal
Answer:
Explanation:
November 1 Issue common stock in exchange for $13,000 cash.
Debit Cash 13,000
Credit Common Stock 13,000
November 2 Purchase equipment with a long-term note for $4,300 from Spartan Corporation.
Debit Equipment 4,300
Credit Note Payable 4,300
November 4 Purchase supplies for $2,000 on account.
Debit Supplies 2,000
Credit Accounts Payable 2,000
November 10 Provide services to customers on account for $10,000.
Debit Accounts receivable 10,000
Credit Service Revenue 10,000
November 15 Pay creditors on account, $2,000.
Debit Accounts payable 2,000
Credit Cash 2,000
November 20 Pay employees $3,500 for the first half of the month.
Debit Salary Expense 3,500
Credit Cash 3,500
November 22 Provide services to customers for $12,100 cash.
Debit Cash 12,100
Credit service revenue 12,100
November 24 Pay $3,000 on the note from Spartan Corporation.
Debit Note payable 3,000
Credit Cash 3,000
November 26 Collect $5,000 on account from customers.
Debit Cash 5,000
Credit Accounts receivable 5,000
November 28 Pay $1,900 to the local utility company for November gas and electricity.
Debit Utility expense 1,900
Credit cash 1,900
November 30 Pay $4,600 rent for November.
Debit rent expense 4,600
Credit cash 4,600
Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 80,000 miles in 2018, 55,000 miles in 2019, 51,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $53,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes.
Calculate the net income for 2021? (Round "Per Unit Cost" to 3 decimal places.)
Answer:
Net Income Calculation for 2021
Company A Company B Company C
Revenue $53,000 $53,000 $53,000
Less Depreciation Expense ($15,000) ($0.00) ($16,800)
Net Income / (Loss) $38,000 $53,000 $36,200
Explanation:
Company A
Depreciation Expense (Straight line) : (Cost - Salvage Value) / Number of Useful Life
2021 = ($62,000-$2,000) / 4
= $15,000
Company B
Depreciation Expense (Double Declining Balance) : 2 × SLDP × BVSLD
SLDP = 100/ 4
= 25%
2018 = 2 × 25% × $62,000
= $ 31,000
2019 = 2 × 25% × ($62,000 - $ 31,000)
= $ 15,500
2020 = 2 × 25% × ($62,000 - $ 31,000 - $ 15,500 )
= $ 7,750
2021 = 2 × 25% × ($62,000 - $ 31,000 - $ 15,500 - $ 7,750 )
= 0
In 2021 depreciation will only be allowed where:
Book Value = Salvage Value
Test to see if Book Value has fallen below Salvage Value :
Cost $62,000
Less Accumulated depreciation $54,250
Book Value $ 7,750
Company C
Depreciation Expense (units-of-production) : (Cost - Salvage Value) × Period`s Production / Total Expected Production
2021 = ($62,000-$2,000) × 70,000/ 250,000
= $16,800
Net Income Calculation for 2021
Company A Company B Company C
Revenue $53,000 $53,000 $53,000
Less Depreciation Expense ($15,000) ($0.00) ($16,800)
Net Income / (Loss) $38,000 $53,000 $36,200
A cash-flow budget uses the same format as a cash-flow statement. It is prepared on a monthly basis and it reflects budgeted income and expenses. In addition to the cash-flow statement, Scott and Mary made a list of budget assumptions, listed for you here:
1. scott's income will increase by 5%, effective January 1 His bonus is generally 10% of his income in the previous year, and he recerves it in January.
2. Mary's raise will be 3%, effective January 1.
3. Interest and dividend income will conservatively be the same in 2017 as it was in 2016 and will be received on a monthly basis.
4. Mortgage payments will be the same in 2017 as they were in 2016.
5. Federal income taxes are estimated at 20%, state income taxes at 6%, and social security taxes at 7.65% of wages, including Scotts bonus.
6. Property insurance and property taxes are paid every six months, in June and December. The amount is expected to be the same in 2017 as it was in 2016.
7. Mary will contribute $60 per week for the employee portion of their medical insurance. According to her pay schedule, April and June are five-week months. Auto insurance is paid at the end of each calendar quarter and should not be more than it was in 2016.
8. Scott and Mary would like to purchase a new car in the next few years and will put $500 a month away specifically for that purpose.
9 Scott and Mary don't expect the amount of variable expenses to change in 2017 except that they would like to double their charitable contributions and go on a vacation to Ireland in June. The vacation will cost $6,000.
10. Gift purchases are made mostly around the holidays, so Scott and Mary are planning to pay half of the gift expense in December and half in January when the credit card bill comes in.
11. Water and sewer is billed quarterly, in January, April, July, and october. The cost of heat should be spread over six months from November to April.
12. All other variable expenses can be spread evenly every month at 2016 amounts. Use the information from their cash-flow statement (listed in the first column of the following annual budget) and their budget assumptions to fill in the missing amounts for the first six months of Scott and Mary's monthly budget for 2017.
Cash Flow Statement 2017
2016 Jan. Feb Mar Apr May June.\
Answer:
Surplus/Deficit
2016 27920
January 4980.20
February 2265.55
March 2090.55
April 2005.55
May 2473.89
June-9061.11
Explanation:
Annual Budget
Scott and Mary Cash-Flow Statement
2017
2016 Jan. Feb. Mar. Apr. May June
Income
Deon'
Scott s salary 59,000 5162.5 5162.5 5162.5 5162.5 5162.5 5162.5
(59000/12*1.05)
Marys salary 53,1004557.75 4557.75 4557.75 4557.75 4557.75 4557.75
(53100/12*1.03)
Scott bonus 2016 5000 Jan 5900
Interest & Dividends 150 12.5 12.5 12.5 12.5 12.5 12.5
(150/12)
1.
Total Income 117250 15632.75 9732.75 9732.75 9732.75 9732.75 9732.75
Expenditures
Fixed expenses
Mortgage 14976 1248 1248 1248 1248 1248 1248
(14976/12)
Sott's Federal Income Tax 12800 2212.5 1032.5 1032.5 1032.5 1032.5 1032.5 [(salary+Bonus)*20%]
Scott's State Income Tax 3840 663.75 309.75 309.75 309.75 309.75 309.75 [(salary+Bonus)*6%]
Scott's Social Security Taxes4896 846.28 394.93 394.93 394.93 394.93 394.93
[(salary+Bonus)*7.65%]
Mary's Federal Income Tax 10620 911.55 911.55 911.55 911.55 911.55 911.55 (Salary*20%)
Mary's State Income Tax 3186 273.47 273.47 273.47 273.47 273.47 273.47 (Salary 6%)
Mary's Social Security Taxes 4062 348.67 348.67 348.67 348.67 348.67 348.67 (Salary*7.65%)
Property Taxes
2016 4100 June 4100
Property Insurance
2016 1200 June 1200
Medical Insurance 2400 240 240 240 300 240 300
Automobile Insurance and Registration
2016 700 May 175 June 175 (700/4)
Savings for auto purchase June500 500 500 500 500 500
2.
Total Fixed expenses 62780 7244.21 5258.86 5433.86 5318.86 5258.86 10793.86
Variable expenses
Food 1620 135 135 135 135 135 135 (1620/12)
Entertainment 3000 250 250 250 250 250 250 (3000/12)
Dining out 4700 391.67 391.67 391.67 391.67 391.67 391.67 (4700/12)
Electric 350 29.17 29.17 29.17 29.17 29.17 29.17
(350/12)
Water and sewer 2016 800 Jan 200.00 April 200.00 (800/4)
Heat 1250 208.33 208.33 208.33 208.33 - - (1250/6)
Cable TV 3000 250.00 250.00 250.00 250.00 250.00 250.00 (3000/12)
Telephone 600 50.00 50.00 50.00 50.00 50.00 50.00
(600/12)
Cell phone 900 75.00 75.00 75.00 75.00 75.00 75.00
(900/12)
Gifts 2016 2000 Jan 1000.00 (2000/2)
Personal care 600 50.00 50.00 50.00 50.00 50.00 50.00 (600/12)
Medical expenses 3700 308.33 308.33 308.33 308.33 308.33 308.33 (3700/12)
Vehicle gas and maintenance 2530 210.83 210.83 210.83 210.83 210.83 210.83 (2530/12)
Charitable contributions 1500 250 250 250 250 250 250
(3000/12)
Vacation June 6000
3.
Total Variable expenses 26550 3408.333 2208.33 2208.33 2408.33 2000 8000
4.Total expenses
(Addition of solution 2+ solution 3)
89330 10652.55 7467.2 7642.2 7727.2 7258.86 18793.86
5.SURPLUS/(DEFICIT)
(Solution1 Total Income-Solution 4 Total Expenses)
27920 4980.20 2265.55 2090.55 2005.55 2473.89 -9061.11
Nolan Company's cash account shows a $22,352 debit balance and its bank statement shows $21,332 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $3,713. The June 30 bank statement lists $41 in bank service charges; the company has not yet recorded the cost of these services. In reviewing the bank statement, a $90 check written by the company was mistakenly recorded in the company’s books as $99. June 30 cash receipts of $4,724 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. The bank statement included a $23 credit for interest earned on the company’s cash in the bank. The company has not yet recorded interest earned. Prepare a bank reconciliation using the above information
Answer:
bank reconciliation:
bank statement balance $21,332
+ deposits in transit $4,724
- outstanding checks $3,713
reconciled bank account = $22,343
cash account balance reconciliation:
cash account balance $22,352
+ error in recording check $9
+ interests earned $23
- bank fees $41
reconciled cash account $22,343