Answer: You said it yourself, an opportunity.
Explanation:
A business opportunity is often used to describe a way for a business to make more money. It can also mean many other things such as hiring more employees, creating more roles, partnering with another company, etcetera.
But mainly used to make more money.Essco Inc., a calendar year taxpayer, made two asset purchases this year. The first purchase was equipment costing $836,000, and the second purchase was a machine costing $494,000. Both assets are 7-year recovery property. Essco placed the machine in service on June 21 and the equipment in service on October 14. How many months of MACRS depreciation is Essco allowed for each asset this year?
Answer:
Essco should depreciate the first asset using the half year convention, which establishes a 14.29%. Depreciation expense for year 1 = $836,000 x 0.1429 = $119,464.40 ≈ $119,464.
In order for the mid quarter convention to apply, the value of the second asset should represent at least 40% of Essco's depreciable basis, but in this case it represents only $494,000 / ($494,000 + $836,000) = 37%. Since the mid quarter convention doesn't apply, Essco can also use the half year convention to depreciate the second asset. Depreciation expense for year 1 = $494,000 x 0.1429 = $70,592.60 ≈ $70,593.
Explanation:
A company will generally try to use the highest deprecation rate that it can or is allowed to. In this case, the company could depreciate the second asset using the mid quarter depreciation, but the depreciation rate is much lower. The idea is to pay less taxes, and unless required by regulations, a company should always choose the legal way to pay less taxes.
Once a company has reached the decline phase, it should just go out of business and be done with it.
False
True
Answer:
Hmm.
Explanation:
False.
Sometimes, a company can make a huge comeback even after a major decline.
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was______ %
and economic growth was______ %. (Give your answers to one decimal place.)
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was________ %
and economic growth was______ %. (Give your answers to one decimal place.)
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was___________ %
and economic growth was______ %. (Give your answers to one decimal place.)
Answer:
Part 1
Suppose that nominal GDP was $11 trillion in 2040 in Mordor. In 2050, nominal GDP was $15 trillion in Mordor. The price level fell 3% between 2040 and 2050, and population growth was 2%. Between 2040 and 2050 in Mordor,
nominal GDP growth was 36.4%
and economic growth was 37.4%.
total nominal growth rate:
(15 - 11) / 11 = 0.3636 = 36.4%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 36.36% - (-3%) - 2% = 37.36%
Part 2
Suppose that nominal GDP was $20 trillion in 2040 in Mordor. In 2050, nominal GDP was $18 trillion in Mordor. The price level rose 3% between 2040 and 2050, and population growth was 2%.
Between 2040 and 2050 in Mordor, nominal GDP growth was -10%
and economic growth was -15%
total nominal growth rate:
(18 - 20) / 20 = -0.1 = -10%
economic growth = nominal GDP growth rate - change in price level - population growth rate = -10% - 3% - 2% = -15%
Part 3
Suppose that nominal GDP was $8 trillion in 2040 in Mordor. In 2050, nominal GDP was $10 trillion in Mordor. The price level rose 18.0% between 2040 and 2050, and population growth was 13.0%.
Between 2040 and 2050 in Mordor, nominal GDP growth was 25%
and economic growth was -6%.
total nominal growth rate:
(10 - 8) / 8 = 0.25 = 25%
economic growth = nominal GDP growth rate - change in price level - population growth rate = 25% - 18% - 13% = -6%
. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)
Question Completion:
Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 58,000 units and sold 54,000 units.
Manufacturing Variable costs per unit:
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
The company sold 40,000 units in the East region and 14,000 units in the West region. It determined that $320,000 of its fixed selling and administrative expense is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
Answer:
Diego Company
Difference = $170,000 - (72,000)
= $242,000
Explanation:
a)Data and Calculations:
Selling price = $76 per unit
Units sold = 54,000
Units produced = 58,000
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Variable costs per unit: $44
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
Cost of Production:
Under variable costing:
Variable cost per unit X Units produced
= $44 * 58,000 = $2,552,000
Cost of goods sold = $44 * 54,000 = $2,376,000
Cost of Ending Inventory = $44 * 4,000 = $176,000
Under Absorption costing:
(Variable manufacturing costs * Units produced) + Fixed manufacturing overhead
= $41 * 58,000 + $1,160,000
= $3,538,000
Product Cost per unit = $3,538,000/58,000 = $61
Cost of goods sold = $61 * 54,000 = $3,294,000
Ending Inventory = $61 * 4,000 = $244,000
Sales Revenue = $76 * 54,000 = $4,104,000
Income Statement Under Variable Under Absorption
Sales Revenue $4,104,000 $4,104,000
Cost of goods sold 2,376,000 3,294,000
Gross profit $1,728,000 $810,000
Fixed costs:
Manufacturing overhead $1,160,000
Selling and administrative 640,000 $640,000
Total fixed costs $1,800,000 $640,000
Net operating losses $72,000 $170,000
Difference = $170,000 - (72,000) = $242,000
The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities is:
Answer:
Acid-test ratio
Explanation:
Acid-test ratio I finance can also be regarded as quick ratio, it gives the measurement of how an organization can utilize her quick asset as well as cash to settle her liabilities at at that current period.
It can be calculated theoretically using this expresion;
Quick ratio= (Current Asset- Inventory)/Current Liabilities
It should be noted that acid-test ratio gives The ratio of total cash, marketable securities, accounts receivable, and short-term notes to current liabilities. It enables to know shot term liquidity of a particular company.
The current assets of Margo Company are $300,000. The current liabilities are $100,000.The current ratio expressed as a proportion is:___________.
a. 300%.
b. 3.0 : 1
c. .33 : 1
d. $300,000 ÷ $100,000.
Answer:
b. 3.0 : 1
Explanation:
Current ratio is used to measure a company's financial ability to pay short-term obligations or those due within one year. It is measure by Current asset/Current liability
The Current ratio = $300,000 / $100,000 = 3.0 : 1
Note: The higher the quick ratio, the better the company's liquidity position.
Assume the perpetual inventory method is used. 1) The company purchased $12,200 of merchandise on account under terms 2/10, n/30.2) The company returned $1,700 of merchandise to the supplier before payment was made.3) The liability was paid within the discount period.4) All of the merchandise purchased was sold for $18,400 cash. The amount of gross margin from the four transactions is:
Answer:
$8,110
Explanation:
The computation of the gross margin is shown below:
As we know that
Gross margin is
= Sales - cost of goods sold
where,
Sales is $18,400
And, the cost of goods sold is
= (Purchase - returns) × (1 - discount rate)
= ($12,200 - $1,700) × (1 - 0.02)
= $10,290
So, the gross margin is
= $18,400 - $10,290
= $8,110
Michael bought stock in a large consumer products company. As a stockholder, he is prioritized in the distribution of a firm's dividends, but he doesn't have voting and control rights. What type of stockholder is Michael?
a. a common stockholder
b. a preemptive stockholder
c. a proxy stockholder
d. a secured stockholder
e. a preferred stockholder
Answer:
Preferred stockholder
Explanation:
Shareholders are investors that buy company shares in order to gain ownership in the company.
The company gives shareholders dividends on their shares owned out of profit.
Preferred stockholders are paid before other stockholders are settled.
However they do not have voting and controlling rights.
In the scenario above Michael is a preferred stockholder.
A company produces a single product. Variable production costs are $12.90 per unit and variable selling and administrative expenses are $3.90 per unit. Fixed manufacturing overhead totals $45,000 and fixed selling and administration expenses total $49,000. Assuming a beginning inventory of zero, production of 4,900 units and sales of 4,050 units, the dollar value of the ending inventory under variable costing would be:
Answer:
$10,965
Explanation:
Computation for the dollar value of the ending inventory under variable costing
First step is to find the Units in ending inventory
Using this formula
Units in ending inventory = Units in beginning inventory + Units produced−Units sold
Let plug in the formula
Units in ending inventory= 0 units + 4,900 units−4,050 units
Units in ending inventory = 850 units
Last step is to find the Value of ending inventory under variable costing
Using this formula
Value of ending inventory under variable costing = Unit in ending inventory × Variable production cost
Let plug in the formula
Value of ending inventory under variable costing= 850 units × $12.90 per unit
Value of ending inventory under variable costing = $10,965
Therefore the dollar value of the ending inventory under variable costing would be $10,965
Argent Corporation has $60 million in current liabilities, $150 million in total liabilities, and $210 million in total common equity; Argent has no preferred stock. Argent’s total debt is $120 million. What is the debt-to-assets ratio? What is the debt-to-equity ratio?
Answer and Explanation:
The computation is shown below
Debt to asset ratio is
= Total debt ÷ total asset
= $120 million ÷ ($150 million + $210 million)
= $120 million ÷ $360 million
= 0.33
And, the debt to equity ratio is
= Total debt ÷ total equity
= $120 million ÷ $210 million
= 0.57
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Select the correct answer. Which description is that of a vertical stroke? A. a stroke drawn to represent a letter part that is perpendicular to the guidelines B. a stroke drawn to represent a letter part that is diagonal to the guidelines C. a stroke drawn to represent a letter part that is parallel to the guidelines D. a stroke drawn to represent a letter part that is at an angle of 68 degrees to the guidelines
Answer:
A
Explanation:
You stop at a SUBWAY to get a sandwich for lunch and you notice that they now have TCBY yogurt. This is an example of a:______
a. co-branded establishment.
b. franchise.
c. small business.
d. dual-sponsored business.
e. dual-branded franchise.
Answer:
dual-branded franchise.
Explanation:
A franchise can be defined as a contractual arrangement between a parent (established) company and another which primarily, grants permission or license to the new firm to operate a business under an established name and in accordance with specific rules, terms and conditions.
Additionally, a dual-branded franchise refers to a type of franchise in which two or more business franchise set up their shops or outlets very close to each other or within the same premises. Thus, dual-branded franchises usually share some things in common such as shop, dining area etc.
In this scenario, you stop at a SUBWAY to get a sandwich for lunch and noticed that they now have TCBY yogurt. Therefore, this is an example of a dual-branded franchise.
The main advantage of a dual-branded franchise is to boost sales and give customers a complete shopping experience, satisfaction or value.
What kind of externality is present in the market above? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a. Positive Consumption
b. Negative Consumption
c. Positive Production
d. Negative Production
Answer:
The correct answer is the option A: Positive Consumption.
Explanation:
To begin with, the name of "Externalities" in the field of economics refers to the situation in where an external party that it is outside a certain transaction receives a good or a bad contribution from that operation. That means that when in an economy a transaction between two parties affect a third one then an externality is having place and that could be a good or bad externality that can come from a consumption or from a service. Therefore that there are four types, positive consumption, positive production, negative production and negative consumption.
An investment offers $9,200 per year for 17 years, with the first payment occurring 1 year from now. Assume the required return is 12 percent. Requirement 1: What is the value of the investment today? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 2: What would the value be if the payments occurred for 42 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 3: What would the value be if the payments occurred for 77 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ Requirement 4: What would the value be if the payments occurred forever? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $
Answer:
1.
Present value = $65500.60053 rounded off to $65500.60
2.
Present value = $76009.84174 rounded off to $76009.84
3.
Present value = $76654.22671 rounded off to $76654.23
4.
PV of perpetuity = $76666.66667 rounded off to $76666.67
Explanation:
The payments from the investment can be classified as being an ordinary annuity as the payments made by the investment offer are of constant amount and occur at the end of the period, occur after equal intervals of time and are for a defined and finite time period except for the payments made in case of requirement 4. The formula to calculate the present value of annuity that will be used in requirement 1, 2 and 3 is attached.
1.
Present value = 9200 * [(1 - (1 + 0.12)^-17) / 0.12]
Present value = $65500.60053 rounded off to $65500.60
2.
Present value = 9200 * [(1 - (1 + 0.12)^-42) / 0.12]
Present value = $76009.84174 rounded off to $76009.84
3.
Present value = 9200 * [(1 - (1 + 0.12)^-77) / 0.12]
Present value = $76654.22671 rounded off to $76654.23
4.
If the payments occur for an infinite period of time, they can be classified as a perpetuity.
The formula to calculate the present value of perpetuity is as follows,
PV of perpetuity = Cash Flow / r
Where,
r is the required rate of return or discount rate
PV of perpetuity = 9200 / 0.12
PV of perpetuity = $76666.66667 rounded off to $76666.67
As a financial manager you must choose between three alternative investments. Each investment is expected to provide cash inflows for the next four years as described below. Based on the goal of shareholder wealth maximization, you would ________. Year Investment A Investment B Investment C 1 $25,000 $17,500 $10,000 2 $20,000 $17,500 $15,000 3 $15,000 $17,500 $20,000 4 $10,000 $17,500 $25,000 Total $70,000 $70,000 $70,000
Full question attached
Answer:
B. Choose investment A
Explanation:
Looking at the investment cash flows for the four years, investment A maximises the shareholders wealth mostly because it covers cost of investment quicker than other investments B, C and D. It begins with the highest cash flow return, for first and second year therefore pay back period is lower with investment A. Also net present value is higher.
You are a business owner of a firm that services trucks. A customer would like to rent a truck from you for one week, while you service his truck. You must decide whether or not to rent him a truck. You have an extra truck that you will not use for any other purpose during this week. This truck is leased for a full year from another company for $300/ week plus $.50 for every mile driven. You also have paid an annual insurance premium, which costs $50/ week to insure the truck. The truck has a full 100-gallon fuel tank. The customer has offered you $600 to rent the truck for a week. The price includes the 100 gallons of fuel that is in the tank. It also includes the 100 gallons of fuel that is in the tank. It also includes up to 500 miles of driving. The customer will pay $.50 for each additional mile that he drives above the 500 miles. You anticipate that the customer will bring back the truck with an empty fuel tank and will have driven more than 500 miles. You sell fuel to truckers at a retail price $4.00/gallon. Any fuel you sell or use can be replaced at a wholesale price of $3.25/gallon. The customer will rent a truck from another company if you do not accept the proposed deal. In either case, you will service his truck. You know the customer and are confident that he will pay all charges incurred under the agreement.
1. Should you accept or reject the proposed deal? Why, or why not? Show calculations.
2. Would your answer change if your fuel supplier limited the amount of fuel that you could purchase from him at the wholesale price? Explain.
Explanation:Given data:
Yearly lease from the company = $300/weekly +$.50 for every driven mile.
Annual insurance = $50/weekly.
Customer offer = $600 for a week ( 100 gallons of fuel in the truck inclusive).
Customer pays and additional $.50 for mile driven above 500.
Solution:
Cost of fuel in the truck
= 100 * $3.25
= $325.
Insurance cost = $50.
Total cost = $375.
Customer offer – total cost
= $600 – $375.
= $225.
1.The proposal should be accepted because even after deductions of the cost of running the truck, you are still left with $225 which doesn’t include the cost the customer would incite for driving above 500 miles.
2.No, as that would only have a little effect on the cost of running the truck. So my answer would still be same.
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00 and a residual standard deviation of 30%. a. Calculate the total variance for an increase of 0.10 in its beta. (Do not round intermediate calculations. Round your answer to the nearest whole number.) b. Calculate the total variance for an increase of 2.62% in its residual standard deviation. (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Answer: Check attachment
Explanation:
a. Calculate the total variance for an increase of 0.10 in its beta.
The answer here is 0.2700
b. Calculate the total variance for an increase of 2.62% in its residual standard deviation.
The answer is 0.2664
Check the attachment for more explanation
7. The theory of efficiency wages Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor? Check all that apply. Paying higher wages encourages workers to be more productive. Higher wages cause workers to shirk more of their responsibilities. Paying higher wages can reduce a firm's training costs. Higher wages attract a more competent pool of workers.
Answer:
Paying higher wages encourages workers to be more productive.
Explanation:
Firms pay workers a wage above the market equilibrium even in the presence of surplus labor to encourage the workers to work hard. Increasing a workers wage is known to be an effective method to motivating which later brings about efficiency in output from the workers. It is also use to appreciate the efforts of employees by showing them that company cares for their basic requirement.
Answer:
paying higher wages encourages workers to be more productive
Paying higher wages can reduce a firm's training costs.
Higher wages attract a more competent pool of workers.
Explanation:
Paying higher wages enhances workers to adopt healthier lifestyles, enhancing their productivity.
When a firm pays high wages, it attracts a better pool of workers to apply for its jobs and thereby increases the quality of its workforce
Workers who are shirking their responsibilities are fired
Jeff Heun, president of Tamarisk Always, agrees to construct a concrete cart path at Dakota Golf Club. Tamarisk Always enters into a contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $37,200 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,300 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
Determine the transaction price that Ayayai Always should compute for this agreement. Determine the transaction price:
Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 83% and otherwise it will be finished 1 week late, determine the transaction price.
Answer:
A) Determine the transaction price that Tamarisk Always should compute for this agreement.
total transaction price = contract price ($183,000) + expected value of the bonus
expected value of the bonus:
$37,200 x 50% = $18,600
($37,200 - $9,300) x 30% = $8,370
($37,200 - $9,300 - $9,300) x 20% = $3,720
total = $30,690
total transaction price = $183,000 + $30,690 = $213,690
B) Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 83% and otherwise it will be finished 1 week late, determine the transaction price.
total transaction price = contract price ($183,000) + expected value of the bonus
expected value of the bonus:
$37,200 x 83% = $30,876
($37,200 - $9,300) x 17% = $4,743
total = $35,619
total transaction price = $183,000 + $35,619 = $218,619
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance sheet information for two companies in the food industry, Mondelez International, Inc. and The Hershey Company, is as follows (in thousands): Mondelez Hershey Net property, plant, and equipment $10,010,000 $1,674,071 Current liabilities 14,873,000 1,471,110 Long-term debt 15,574,000 1,530,967 Other long-term liabilities 12,816,000 716,013 Stockholders' equity 32,215,000 1,036,749 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.
Answer:
Please see answer below
Explanation:
a. Determine the ratio of liabilities to stockholder's equity for both companies
Debt to equity ratio = Total liabilities / Shareholder's equity
• Mondelez
Total liabilities = 14,873,000 + 15,574,000 + 12,816,000
= 43,263,000
Shareholder's equity = 32,215,000
Debt to equity ratio = 43,263,000/32,215,000
= 1.34
• Hershey
Total liabilities = 1,471,110 + 1,530,167 + 716,013
= 3,717,290
Shareholder's equity = 1,036,749
Debt to equity ratio = 3,717,290/1,036,749
= 3.59
b. Determine the ratio of fixed assets to long-term liabilities for both companies
•Ratio of fixed assets to long term liabilities = Fixed assets/Longterm liabilities
•Mondelez
Fixed assets = 10,010,000
Long term liabilities = 15,574,000 + 12,816,000
= 10,010,000/28,390,000
= 0.35
• Hershey
Fixed assets = 1,674,071
Long term liabilities = 1,530,167 + 716,013
= 2,246,180
= 1,530,167/2,246,180
= 0.68
CF Manufacturing purchased inventory for $5,300 and also paid a $280 freight in bill 2/10, net 30. CF Manufacturing returned 60% of the goods to the seller and paid the bill within the discount period. What is the final inventory cost
Answer: $2357.6
Explanation:
Purchased Inventory = $5300
Less: purchase return = 60% × $5300 = 0.6 × $5300 = $3180
Amount = $2120
Less: purchase discount = 2% × $2120 = 0.02 × $2120 = $42.4
Amount = $2077.6
Add: Freight in: $280
Final Inventory cost = $2357.6
Dr. Lum teaches part-time at two different community colleges, Hilltop College and Serra College. Dr. Lum can teach up to 5 classes per semester. For every class taught by him at Hilltop College, he needs to spend 3 hours per week preparing lessons and grading papers, and for each class at Serra College, he must do 4 hours of work per week. He has determined that he cannot spend more than 18 hours per week preparing lessons and grading papers. If he earns $4,000 per class at Hilltop College and $4,200 per class at Serra College, how many classes should he teach at each college to maximize his income, and what will be his income
Answer:
2 classes at Hilltop, 3 classes at Serra; and $20,600
Explanation:
We can generate two equations from the problem
Equation 1: Dr. Lum can teach up to 5 classes per semester at both colleges. If 'h' represents the number of classes taken at Hilltop College, and 's', the number of classes taken at Serra College,
Equation 1 becomes: h + s = 5
Equation 2: Dr. Lum spends 3 hours per week preparing for Hilltop classes, and 4 hours for Serra classes, subject to a maximum of 18 hours per week.
Equation 2 becomes: 3h + 4s = 18
Now solving using substitution method,
We can derive an equation 3 from equation 1, as follows.
Equation 3: h = 5 - s.
Substituting equation 3 into equation 2, equation 2 becomes
3(5 - s) + 4s = 18
= 15 - 3s + 4s = 18
= 15 + s = 18
= s = 3.
With s = 3, using equation 3, h = 5 - 3 = 2.
Therefore, Dr. Lum should teach 2 classes at Hilltop, and 3 classes at Serra.
His income will be
$4,000 (2) + $4,200 (3)
= $20,600.
A company wants to analyze the following investment option using its rate of return. They use a MARR of 15% to determine whether something might be a good investment in this category. Calculate the accurate internal rate of return for the given cash flow as precisely as possible, interpolating as necessary. The MARR is a good starting point. Decide if the investment should be made
Remainder Part of Question:
Cash Flow
Initial Costs $365,000
Annual Benefits $90,000
Operation and Maintenance $15,000
Salvage Value $25,000
Lifetime in years 10 Years
Answer:
As the IRR > MARR, hence the investment is financially viable.
Explanation:
Find the attachment below:
If a firm's sales are $250,000 and its variable costs are $190,000, the contribution margin in dollars is:_______.
a. $440,000
b. $60,000
c. $190,000
d. $250,000
Answer:
b. $60,000
Explanation:
Given the following data;
Sales price = $250,000
Variable cost = $190,000
Contribution margin can be defined as the subtraction of variable cost from the sales price.
Mathematically, it given by the formula;
[tex] Contribution \; margin = sales \; price - variable \;cost[/tex]
[tex] Contribution \; margin = 250000 - 190000[/tex]
Contribution margin = 60,000
Therefore, the contribution margin in dollars is $60,000.
Kela Corporation reports net income of $550,000 that includes depreciation expense of $76,000. Also, cash of $53,000 was borrowed on a 4-year note payable. Based on this data, total cash inflows from operating activities are:a) $603,000b) $679,000c) $626,000d) $474,000
Answer:
$626,000
Explanation:
Kela corporation has a net income of $550,000
Depreciation expense is $76,000
Cash is $53,000
Therefore the total cash inflows from operating activities can be calculated as follows
=$550,000 + $76,000
$626,000
Hence the total cash inflow from operating activities is $626,000
An organization that is offering unique, superior products or services to a wide market is pursing a strategy of _________
a. focused differentiation.
b. diversification.
c. differentiation.
d. cost focus.
e. cost leadership.
Answer:
The right approach is Option c (differentiation ).
Explanation:
Differentiation extends to how an organization splits itself into main elements. For larger firms, this would be common, the larger a corporation expands, the further differentiated itself appears for becoming. Businesses with either a significant amount of separation offer a huge amount of influence on some of these distinct elements.The other options given weren’t relevant to the case in question. So, the answer above would be the right one.
Holiday Company issued its 9%, 25-year mortgage bonds in the principal amount of $3,000,000 on January 2, 2006, at a discount of $150,000, which it proceeded to amortize by charges to expense over the life of the issue on a straight-line basis. The indenture securing the issue provided that the bonds could be called for redemption in total but not in part at any time before maturity at 104% of the principal amount, but it did not provide for any sinking fund. On December 18, 2020, the company issued its 11%, 20-year debenture bonds in the principal amount of $4,000,000 at 102, and the proceeds were used to redeem the 9%, 25-year mortgage bonds on January 2, 2021. The indenture securing the new issue did not provide for any sinking fund or for redemption before maturity.
(a) Prepare journal entries to record the issuance of (1) the 11% bonds and (2) the redemption of the 9% bonds. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Date Account Titles and Explanation Debit Credit
(1) December 18, 2020
(2) January 2, 2021
(b) Indicate the income statement treatment of the gain or loss from redemption.
The _____ is reported as ______.
Answer:
A. December 18, 2020
Dr Cash 4,080,000
Cr 11% Bond payable (Face value) 4,000,000
Cr Premium on issue of Bond payable 80,000
January 2, 2021
Dr 9% Bonds Payable ( Face value) 3,000,000
Dr Loss on redemption of Bond 180,000
Cr Discount on Bond payable 60,000
Cr Cash 3,120,000
B. The LOSS is reported as an ORDINARY INCOME
Explanation:
A. Preparation of Journal entries
December 18, 2020
Dr Cash 4,080,000
($4,000,000/100)*102
Cr 11% Bond payable (Face value) 4,000,000
Cr Premium on issue of Bond payable 80,000
(4,080,000-4,000,000)
January 2, 2021
Dr 9% Bonds Payable ( Face value) 3,000,000
Dr Loss on redemption of Bond 180,000
[3,00,0000-(3,120,000+60,000)]
Cr Discount on Bond payable 60,000
($150,000/25)*10
Cr Cash 3,120,000
(3,000,000*104%)
B. Indication of the income statement treatment of the gain or loss from redemption.
The LOSS is reported as an ORDINARY INCOME
A 10 percent three-year wage increase is provided as a 2 percent increase in the first year, 3 percent in the second year, and 5 percent in the third year. This is an example of a ________ contract.
Answer:
Back-loaded
Explanation:
A back-loaded contract can be defined as a contractual arrangement between two or more parties, in which higher costs are levied or higher benefits are accrued to a project towards the end of its term (duration) as against lower costs or benefits at its beginning.
This ultimately implies that, a back-loaded contract allows lower wage adjustment in the first year with a consequent higher increase towards the end of a contract.
In this scenario, a 10 percent three-year wage increase is provided as a 2 percent increase in the first year, 3 percent in the second year, and 5 percent in the third year. This is an example of a back-loaded contract.
We sell to a customer paying with Visa and the fee is 2%. Part of the transaction would include a debit to:
Answer:
there are no available options, but the complete journal entry to record a credit card sale is:
Dr Cash account 98% of sale
Dr Credit card fees 2% of sale
Cr Sales revenue 100% of sale
Explanation:
Since VISA payments are automatic, you can debit cash directly. There is no need to debit accounts receivable and then once the payment is confirmed, debit cash. Some credit cards do not pay automatically, and in those cases you should debit accounts receivable.
Instead of credit card fees, some people use credit card discount, or credit card expense, but all these accounts are basically the same. They are all expense accounts.
You lose your job and as a result, you buy fewer mystery books. This shows that you consider mystery books to be a/an a. inferior good. b. complementary good c. luxury good d. normal good.
Answer:
You lose your job and as a result, you buy fewer mystery books. This shows that you consider mystery books to be a/an
c. luxury good
Explanation:
The demand for a luxury good increases with increasing income. A higher proportion of the income is spent on the good than under normal circumstances. An inferior good is one whose demand, on the other hand, drops when income rises. A normal good is a necessity unlike a luxury good. A complementary good is demanded with its complement because the two goods go together. Bread and butter are complementary goods.