The maximum price that the investor should pay for the property would be $1,000,000.
Explanation: To calculate the maximum price, we need to use the Net Operating Income (NOI) and the required rate of return. The NOI is the gross annual income minus the vacancy rate and operating expenses.
Calculate the Net Operating Income (NOI):
Gross Annual Income = $110,000
Vacancy Rate = 4% (4/100)
Operating Expenses = $10,000
NOI = Gross Annual Income - (Gross Annual Income * Vacancy Rate) - Operating Expenses
= $110,000 - ($110,000 * 0.04) - $10,000
= $110,000 - $4,400 - $10,000
= $95,600
Determine the maximum price based on the required rate of return:
Required Rate of Return = 10% (10/100)
Maximum Price = NOI / Required Rate of Return
= $95,600 / 0.10
= $956,000
Therefore, the maximum price that the investor should pay for the property is $956,000.
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A farmer focusing on the production of eco-friendly chicken eggs collects the following data about his output. In a sample of 50 eggs, the farmer finds the average egg to weigh 47 grams. The standard deviation of the egg weight is 2 grams and the distribution of weights resembles a normal distribution reasonably closely. The farmer can sell the eggs to a local distributor. However, they have to be in the interval between 44 grams and 50 grams (i.e., the lower specification limit is 44 grams and the upper specification limit is 50 grams). a. What is the capability score of the eco-friendly chicken egg operation? b. What percentage of the produced eggs fall within the specification limits provided by the local distributor? c. By how much would the farmer have to reduce the standard deviation of the operation if his goal were to obtain a capability score of Cp=2/3 (i.e., get 4.5% defects)?
a. Capability score: 0.5
b. Percentage within limits: Approximately 99.85%
c. Standard deviation reduction: Approximately 0.51 grams.
To compute the ability score and level of eggs inside as far as possible, we can utilize the interaction capacity record, Cp.
a. The capacity score (Cp) is determined by partitioning the resistance width (the distinction between the upper and lower particular cutoff points) by multiple times the standard deviation:
Cp = (USL - LSL)/(6 * standard deviation)
For this situation, the upper detail limit (USL) is 50 grams, the lower particular cutoff (LSL) is 44 grams, and the standard deviation is 2 grams. Connecting these qualities to the recipe, we get:
Cp = (50 - 44)/(6 * 2) = 6/12 = 0.5
Accordingly, the ability score of the eco-accommodating chicken egg activity is 0.5.
b. To decide the level of eggs inside as far as possible, we want to work out the region under the ordinary circulation bend between the cutoff points. We can utilize a standard typical conveyance table or a factual programming to track down this worth. Expecting a symmetric conveyance, we can find the level of eggs inside as far as possible as follows:
Rate inside limits = Rate underneath USL - Rate beneath LSL
Utilizing a standard typical conveyance table or programming, we track down the accompanying probabilities:
Rate underneath USL = Rate under 50 grams = 100 percent (as far as possible is at the tail of the appropriation)
Rate underneath LSL = Rate under 44 grams = around 0.15% (from the table)
In this way, the level of eggs inside as far as possible is roughly 100 percent - 0.15% = 99.85%.
c. To accomplish a capacity score (Cp) of 2/3 or 0.67 (which compares to 4.5% deformities), we can revise the Cp recipe and tackle for the expected standard deviation:
standard deviation = (USL - LSL)/(6 * Cp)
Utilizing the given upper and lower detail limits (50 grams and 44 grams) and the ideal Cp of 0.67, we can compute the necessary standard deviation:
standard deviation = (50 - 44)/(6 * 0.67) = 6/4.02 ≈ 1.49 grams
Thusly, the rancher would have to diminish the standard deviation of the activity to roughly 1.49 grams to accomplish a capacity score of Cp = 2/3 (4.5% deformities).
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Following are the transactions of Green Company.
May 1 The company provided $2,900 of sustainability consulting services on credit to a customer. 3 The company purchased $750 of energy-efficient supplies on credit.
9 The company collected $1,400 cash as partial payment of the May 1 consulting revenue.
20 The company paid $750 cash toward the payable for energy-efficient supplies.
31 The company paid $550 cash for May's renewable energy utilities.
Prepare general journal entries for the above transactions.
View transaction list
Journal entry worksheet
<
1
2
3 4
5
The company provided $2,900 of sustainability consulting services on credit to a customer.
Note: Enter debits before credits.
Date May 01
General Journal
Debit
Credit
Journal Entries of Green Company include The company had $2,900 in accounts receivable and $750 in inventory and accounts payable on May 1. They purchased $750 of supplies on credit on May 3 and collected $1,400 in cash for consulting revenue on May 9 and so on.
May 1:
Accounts Receivable (Assets) 2,900
Service Revenue (Equity) 2,900
To record the provision of sustainability consulting services on credit.
May 3:
Inventory (Assets) 750
Accounts Payable (Liabilities) 750
To record the purchase of energy-efficient supplies on credit.
May 9:
Accounts Receivable (Assets) 1,400
Cash (Assets) 1,400
To record the collection of cash as partial payment for the consulting revenue.
May 20:
Accounts Payable (Liabilities) 750
Cash (Assets) 750
To record the payment of cash towards the payable for energy-efficient supplies.
May 31:
Utilities Expense (Expenses) 550
Cash (Assets) 550
To record the payment of cash for May's renewable energy utilities.
These general journal entries capture the key transactions of Green Energy Company during the month of May. On May 1, the company provided sustainability consulting services on credit, creating an account receivable for $2,900 and recognizing service revenue.
On May 3, the company purchased energy-efficient supplies on credit, increasing the inventory and accounts payable accounts by $750. On May 9, the company collected $1,400 in cash as a partial payment for the consulting revenue, reducing the accounts receivable and increasing the cash account.
On May 20, the company made a cash payment of $750 towards the payable for energy-efficient supplies, reducing the accounts payable and cash accounts. Finally, on May 31, the company paid $550 in cash for May's renewable energy utilities, recognizing the utilities expense and reducing the cash account.
These journal entries accurately reflect the financial transactions and provide a clear record of the company's activities during the month of May.
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Prof Irias sues Prof. McGuire for trespass of property in a
state trial court and loses. Prof Irias
can insist that the United States Supreme Court hear her
case
can plead her case before
When Prof Irias sues Prof. McGuire for trespass of property in a state trial court and loses, she cannot insist that the United States Supreme Court hear her case. Nonetheless, she can plead her case before the federal court by raising a constitutional issue, which requires that the US Supreme Court intervene in the dispute.
The US Supreme Court is the highest court in the United States, and it has both appellate and original jurisdiction. The original jurisdiction provides the Supreme Court with the authority to settle disputes between states, while the appellate jurisdiction involves hearing appeals from lower federal courts and state courts that involve federal law or the Constitution.
The US Supreme Court has a discretionary authority to decide which cases to hear. When a state court decides a case involving a federal question, a party who is aggrieved by the decision may appeal to the Supreme Court for review.
In this case, Prof Irias would have to appeal to the US Supreme Court if her case involved a federal question, but the court has the discretion to deny or grant her appeal.
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I Calculate the variance in the scenario below and state whether it is positive or negative, favourable or adverse. Explain two challenges of setting budgets. Budgeted profit: £200,000; Actual profit: £410,000 (6 marks)
To calculate the variance, you will need to deduct the actual result from the budgeted result, then divide that difference by the budgeted amount. That is,
Variance = (Actual Profit - Budgeted Profit) / Budgeted Profit
Variance = (410,000 - 200,000) / 200,000
Variance = 210,000 / 200,000
Variance = 1.05 or 105%
1. Unrealistic expectations: When budgeting, some managers set goals that are too high or unrealistic. When goals are set too high, it can create unnecessary pressure on the team to meet the goals, which can lead to burnout, job dissatisfaction, and even a high employee turnover rate. Unrealistic expectations can also lead to employees cutting corners, taking shortcuts, or disregarding rules to achieve the set goals.
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According to the cost-benefit analysis for pollution control,
should a firm be required to remove 100% of the pollution it
made?
A. Yes, since justice requires that all humans have the right to
live a
A firm should be required to remove a reasonable amount of pollution, based on the results of the cost-benefit analysis.
The cost-benefit analysis for pollution control determines the value of pollution control strategies and their costs. To determine the best pollution control level, the costs of pollution control need to be weighed against the benefits it provides.
Therefore, it is not always necessary for a firm to remove 100% of the pollution it creates.
What is cost-benefit analysis for pollution control?
A cost-benefit analysis is a tool used to determine whether or not the benefits of a specific action outweigh the costs of that action.
The cost-benefit analysis for pollution control determines the value of pollution control strategies and their costs. The costs of pollution control refer to the expenses incurred when implementing pollution control measures.
The benefits of pollution control, on the other hand, include avoided pollution-related health effects, higher quality of life, and better economic outcomes.
According to the cost-benefit analysis for pollution control, should a firm be required to remove 100% of the pollution it made?It is not always necessary for a firm to remove 100% of the pollution it creates.
The level of pollution control that is necessary for a firm to implement should be determined through the cost-benefit analysis.
This level will vary based on the specific pollution-related impacts of the firm's activities, the costs of pollution control strategies, and the benefits of those strategies.
Therefore, a firm should be required to remove a reasonable amount of pollution, based on the results of the cost-benefit analysis.
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Outline two possible problems to HSN of many employees leaving.
1. A stock investment of 100 million became 150 million in one year. Satisfied with the fifty percent return, the investor added 250 million to become 400 million in the beginning of second year. What is the money weighted return if the investment grew to only 410 million by the end of second year?
a. 13.0%
b. 26.3%
c. 12.0%
d. 24.0%
6. Goodeal Inc. is considering the purchase of a new material handling system for a cost of $15 million. This system is expected to generate a positive cash flow of $1.8 million per year in perpetuity. What is the IRR of the proposed investment if the appropriate hurdle rate is 10.5 percent?
a. 8.33%.
b. 10.5%.
c. 17.1%.
d. 12.0%
The money-weighted return for the investment that grew from 100 million to 410 million over two years is: option d. 24.0%
The internal rate of return (IRR) for the proposed investment with an initial cost of $15 million , given a hurdle rate of 10.5%, is: option d. 12.0%.
What is the money-weighted returnTo know the money-weighted return, one need to look at the cash flows and the respective periods in which they occurred.
So, Note that :
Beginning of Year 1: Invested 100 million.End of Year 1: Value grew to 150 million (a 50% return).Beginning of Year 2: Added 250 million (total investment of 350 million).End of Year 2: Value grew to 410 million.To solve the money-weighted return, one need to find the rate of return. So the equation is:
100 million + 250 million × (1 + money-weighted return) = 410 million
350 million + 250 million × money-weighted return = 410 million
250 million × money-weighted return = 410 million - 350 million
250 million × money-weighted return = 60 million
money-weighted return = 60 million / 250 million
= 0.24
So, when one convert this to a percentage, and multiply by 100:The money-weighted return = 0.24 × 100
= 24%
So, the money-weighted return for this investment is 24%.
For question 2
The NPV formula is:
NPV = -Initial Investment + (Cash Flow / Discount Rate)
So one can set NPV to zero and solving for the discount rate:
0 = -15 + (1.8 / Discount Rate)
15 = 1.8 / Discount Rate
Discount Rate = 1.8 / 15
= 0.12 or 12%
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a) CJ Patel Ltd has a share price of $1.95. The company has made a renounceable rights issue offer and the offer is a two-for-six pro-rata issue of ordinary shares at $1.65 per share. (i) Explain what does it mean by the offer being renounceable and to whom is this offer made?
(ii) Calculate the price of the right.
(iii) Calculate the theoretical ex-rights share price.
(i) A renounceable rights offer means that existing shareholders of CJ Patel Ltd have the option to exercise their rights to purchase additional shares at a specified price or transfer/sell their rights to other investors. The offer is made to existing shareholders.
(ii) The price of the right is $0.30.
(iii) The theoretical ex-rights share price is $1.65.
a)(i) A renounceable rights issue offer means that existing shareholders have the option to either exercise their rights and purchase additional shares at a specified price or sell their rights to someone else. The offer is made to the existing shareholders of CJ Patel Ltd, giving them the opportunity to maintain their proportional ownership in the company by subscribing to additional shares.
(ii) To calculate the price of the right, we can determine the subscription price per right. In this case, the offer is a two-for-six pro-rata issue, which means for every six existing shares, shareholders are entitled to purchase two additional shares at the offer price.
Subscription price per right = Offer price per share / (Number of rights per share + 1)
Subscription price per right = $1.65 / (2 + 1)
Subscription price per right = $1.65 / 3
Subscription price per right ≈ $0.55
Therefore, the price of the right is approximately $0.55.
(iii) The theoretical ex-rights share price is the expected price of CJ Patel Ltd's shares after the rights issue has taken place. To calculate this, we subtract the subscription price per right from the current share price.
Theoretical ex-rights share price = Current share price - Subscription price per right
Theoretical ex-rights share price = $1.95 - $0.55
Theoretical ex-rights share price ≈ $1.40
Therefore, the theoretical ex-rights share price is approximately $1.40.
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You are paying a series of five constant-dollar (or real-dollar) uniform payments of $1,979.46 beginning at the end of first year. Assume that the general inflation rate is 34.3% and the market interest rate is 34.3% during this inflationary period. The equivalent present worth of the project is: _________
The equivalent present worth of the project is $3,512.63.
To find the equivalent present worth of the project, we need to adjust the cash flows for inflation and calculate the present value of those cash flows.
Since the general inflation rate is 34.3%, the future value of each payment after one year would be increased by this rate. Therefore, the future value of the five constant-dollar payments would be:
Future Value = $1,979.46 * (1 + 0.343[tex]) ^ 5[/tex] = $6,573.20
Next, we need to discount this future value to its present value using the market interest rate of 34.3%. The present value formula is:
Present Value = Future Value / (1 + Market Interest Rate[tex]) ^ n[/tex]
where n is the number of periods. In this case, n is 5 since we are discounting for 5 years.
Present Value = $6,573.20 / (1 + 0.343[tex]) ^ 5[/tex] = $3,512.63
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A bond fund manager makes a forecast that she believes will be accurate about interest rates in five years. She forecasts that 7-year bonds will yield 3% five years from now. Currently, a 12-year bond pays interest once per year of 4% and sells for price of $927.25.
If the fund manager’s prediction is correct, what will the bond’s price be five years from now in dollars and cents.
To calculate the bond's price five years from now, we can use the bond pricing formula.
Given:
Current bond price = $927.25
Current coupon rate = 4% (annual coupon payment as a percentage of face value)
Face value (par value) = $1,000
Time to maturity = 12 years
Forecasted yield (interest rate) after 5 years = 3%
First, we need to calculate the present value of the bond's future cash flows after 5 years. The bond will have 7 years remaining to maturity at that point.
Using the formula for present value of a bond:
Bond Price = C * (1 - (1 + r)^-n) / r + F * (1 + r)^-n
where:
C = Coupon payment per period (annual coupon payment)
r = Discount rate (yield to maturity)
n = Number of periods (remaining years to maturity)
F = Face value (par value)
We can substitute the given values into the formula:
Coupon payment per period (C) = 4% * $1,000 = $40
Discount rate (r) = 3% (forecasted yield after 5 years)
Number of periods (n) = 7 years (remaining years to maturity)
Face value (F) = $1,000
Using these values, we can calculate the present value of the bond's future cash flows after 5 years:
Present Value = $40 * (1 - (1 + 0.03)^-7) / 0.03 + $1,000 * (1 + 0.03)^-7
≈ $256.99 + $852.05
≈ $1,109.04
Therefore, if the fund manager's prediction is correct and the 7-year bonds yield 3% after 5 years, the bond's price five years from now will be approximately $1,109.04.
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Some of the main factors the courts look for in determining the Australian tax residence of a person include: a. the extent to which they are physically present in Australia in the year of income b. the frequency, regularity, and duration of their visits c. whether they maintain a permanent place of abode in Australia or overseas d. where they maintain their family and business ties e. all of the above are correct.
Residency is an essential factor that is considered by Australian taxpayers. However, there are some main factors that the court looks at in determining the tax residency of a person in Australia.
These factors include, but are not limited to, the frequency, duration, and regularity of their visits to Australia, the extent to which they are physically present in the country in the year of income, whether or not they maintain a permanent place of abode in Australia or overseas, and where they maintain their family and business ties.
There is a common notion that Australian residents are required to pay taxes on their worldwide income, but non-residents are only taxed on income derived from within Australia. However, this is not entirely true, as the tax rules that govern these factors are more complex than this.Residents of Australia are taxed on their worldwide income, while non-residents are taxed on income sourced from Australia only.
Determining your residency status, however, is not as simple as merely looking at the number of days spent in the country.In conclusion, all the factors stated above are correct, and these factors are the main criteria that the courts look at in determining the tax residency of a person in Australia.
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A limited liability company's (LLC’s) operating agreement will typically contain provisions for all of the following, except
Multiple Choice
A. the amount and methods of capitalizing the business.
B. assigning personal liability to the members for business debts.
C. the procedure for handling a member’s death or incapacity.
D. the structure of governance and members’ responsibilities.
The option B, assigning personal liability to the members for business debts is incorrect as it is not a provision in the limited liability company's (LLC’s) operating agreement. It is because limited liability companies are structured to limit the personal liability of the members to the company’s debts and legal liabilities. Thus, the correct answer is B.
The option B, assigning personal liability to the members for business debts is incorrect as it is not a provision in the limited liability company's (LLC’s) operating agreement. It is because limited liability companies are structured to limit the personal liability of the members to the company’s debts and legal liabilities. Thus, the correct answer is B. However, the operating agreement of an LLC outlines the basic rules and regulations that govern the management of the company. The agreement is typically a legally binding contract that outlines the rights, powers, and responsibilities of the LLC's members. The agreement is not required to be filed with the state, although it is advisable to have one. The agreement will typically contain provisions for the following: Capital Contributions: The amount and method of capitalizing the business are outlined in the operating agreement. This provision specifies how much money members are required to contribute to the LLC, how the funds are used, and how profits and losses are allocated.
Management Structure: The agreement specifies the management structure of the LLC. It outlines the responsibilities of the members and managers, as well as the decision-making process. Taxation: The agreement provides for how the LLC will be taxed, either as a partnership or as a corporation. Membership Interests: The operating agreement defines the rights and obligations of each member, including their voting power and allocation of profits and losses. Transfer of Interests: The operating agreement outlines the procedure for transferring a member's interests in the LLC. Death or Incapacity of a Member: The agreement outlines how the LLC will handle a member's death or incapacity. It specifies how the member's interests will be handled and transferred to the remaining members or their heirs in the event of their death or incapacity. Thus, options A, C, and D are all provisions that are typically included in the operating agreement of an LLC, while B is not.
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The Deputy Chief Executive (DCE) is faced with a decision situation that can be described as a situation of 'uncertainty. Which Decision-making model will be used in this decision situation? [Explanation is not required] Use the editor to format your answer
Te Deputy Chief Executive (DCE) is faced with a decision situation that can be described as a situation of 'uncertainty. The Decision-making model will be used in this decision situation is uncertainty decision-making model.
When it comes to decision-making, uncertainty is one of the many decision-making situations. The decision-making process in uncertain circumstances is not straightforward. Decision-making under uncertainty entails determining the likelihood of potential results and weighing their advantages and disadvantages in light of the available data, making the most probable decision possible. Uncertainty is a decision-making model that is used in a decision-making situation.
In situations where the probability of an event is unknown, the uncertainty decision-making model is used to make decisions. When making a decision under conditions of uncertainty, decision-makers use their judgement, best guess, or previous experience to make the best possible decision.It's also worth noting that decision-makers may choose to gather additional information to reduce the level of uncertainty, which will help them make more informed decisions. In summary, the decision-making model that will be used in the decision situation of uncertainty is the uncertainty decision-making model.
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For each of the following scenarios, determine if the individual is helped or hurt by inflation.Explain each answer Jack retired five years ago and now lives on a fixed-income annuity and a smallsavings account that pays him 1% interest on the balance. The current inflation rate is
Jill has worked at her current position without a raise for 4 years. Because inflation has risen 5% over the course of the 4 years, she has struggled to pay day-to-day livingexpenses and her house payment. She asked her employer for a raise and he gave hera 6% raise because she is such a good worker.
Inflation is defined as a rise in the general price level. Inflation, on the other hand, affects people differently depending on their economic situation.
Here is how inflation helps and hurts each of the individuals in the situations given:
Jack retired five years ago and now lives on a fixed-income annuity and a small savings account that pays him 1% interest on the balance. The current inflation rate is Inflation harms Jack since he is a fixed-income earner. The money he gets each month from his annuity is the same, but its worth decreases as inflation rises.
Jack's $1,000 may have been able to buy him a month's worth of food, but with 3% inflation, he can only buy a week's worth of food. Jack's cash in his savings account also has a lower value as inflation rises. As a result, if inflation rises while his money is in the bank, he may lose money by keeping it there.
Jill has worked at her current position without a raise for 4 years. Because inflation has risen 5% over the course of the 4 years, she has struggled to pay day-to-day living expenses and her house payment. She asked her employer for a raise and he gave her a 6% raise because she is such a good worker.Inflation helps Jill because she receives a pay raise. Jill was able to make a strong argument to her employer for a raise due to her excellent work. In the end, Jill's employer gave her a 6% raise, which was enough to keep up with inflation and possibly enhance her standard of living.
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The facility is thinking about purchasing an espresso machine. The cost of the machine is $3250.00. The FSD believes they can expect a net yearly income of $1500.00 from the sale of espresso. How many months would it take to see payback on this machine? A. 2.166 B. 26 C. 5.54 D. there is not enough information to calculate payback time frame.
The correct option is B. The payback time frame for the espresso machine is 26 months.
To calculate the payback time frame for the espresso machine, we need to determine how many months it would take to recoup the cost of the machine based on the net yearly income from the sale of espresso.
First, let's convert the net yearly income to a monthly income. Since there are 12 months in a year, we can divide the net yearly income by [tex]12[/tex]:
Monthly income = [tex]\frac{\$1500}{12} = \$125[/tex]
Now we can calculate the payback time frame by dividing the cost of the machine by the monthly income:
Payback time frame = [tex]\frac{\$3250}{\$125} =26[/tex]
Therefore, the payback time frame for the espresso machine is [tex]26[/tex] months. So the answer is B. [tex]26[/tex].
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Please address all questions with clear explanation. Thank you.
1. John Brown, a chartered accountant, has been appointed by the High Court to liquidate Franklin Hardware Co Ltd (in liq). John Brown prepares a set of accounts which show the following creditors:
a) Various unsecured trade creditors.
b) Franklin Hardware Co Ltd (in liq) owes PAYE and GST to the Commissioner of Inland Revenue.
Under the Companies Act 1993, the order in which John Brown, the liquidator, must make payments to the creditors of Franklin Hardware Co Ltd (in liquidation) is Costs and expenses of the liquidation, Secured creditors with registered security interests, Unsecured trade creditors, PAYE and GST owed to the Commissioner of Inland Revenue etc.
Costs and expenses of the liquidation (Section 312):John Brown's costs incurred in conducting the liquidation, including his remuneration and any expenses, have the highest priority and must be paid first. These costs and expenses are typically associated with the liquidator's duties and include professional fees, legal expenses, and administrative costs.
Secured creditors with registered security interests (Section 307): ASZ Bank Co Ltd, holding a registered security interest over the inventory, has a priority claim on the proceeds from the sale of the secured assets.
Unsecured trade creditors (Section 310):Various unsecured trade creditors, who have provided goods or services to Franklin Hardware Co Ltd without any security interest, are next in line to receive payment.
PAYE and GST owed to the Commissioner of Inland Revenue (Section 167):Franklin Hardware Co Ltd's outstanding PAYE (Pay As You Earn) and GST (Goods and Services Tax) liabilities owed to the Commissioner of Inland Revenue have a priority claim.
Unsecured creditor who agreed to be repaid after other unsecured creditors:This creditor has agreed to be repaid after the other unsecured trade creditors.
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Complete Question : John Brown, a chartered accountant, has been appointed by the High Court to liquidate Franklin Hardware Co Ltd (in liq). John Brown prepares a set of accounts which show the following creditors:
a) Various unsecured trade creditors.
b) Franklin Hardware Co Ltd (in liq) owes PAYE and GST to the Commissioner of Inland Revenue.
c) John Brown has incurred costs in his conduct of the liquidation.
d) Franklin Hardware Co Ltd (in liq) has granted a security interest to ASZ Bank Co Ltd to secure the repayment of loan finance made by ASZ Bank Co Ltd to enable Franklin Hardware Co Ltd to purchase inventory. The security interest is registered on the Personal Properties Security Register.
e) Franklin Hardware Co Ltd (in liq) has granted a security interest to MNO Finance Co Ltd over its book debts. The security interest is not registered on the Personal Properties Security Register.
f) There is an unsecured creditor who has agreed to be repaid after other unsecured creditors.
Required: Referring to relevant sections of the Companies Act 1993, advise John Brown of the order in which he must make payments to the creditors of Franklin Hardware Co Ltd (in liquidation)
Michael Ltd makes calculators that sell for $20 each. The
company’s annual production and sales is 20,000 calculators. The
fixed manufacturing overhead is 30,000 and $50,000 is fixed
administrative
It is necessary to allocate the $30,000 fixed manufacturing overhead cost to the 20,000 calculators that Michael Ltd produces annually.
Michael Ltd makes calculators that sell for $20 each. The company's annual production and sales are 20,000 calculators. The fixed manufacturing overhead is $30,000, and $50,000 is the fixed administrative expense.
Michael Ltd can use different techniques to allocate the manufacturing overhead to the products it produces. For instance, it can use the traditional or conventional method or the activity-based costing (ABC) method.
However, in this case, we will use the traditional method to allocate the fixed manufacturing overhead cost to the company's calculators produced.
The traditional method allocates the manufacturing overhead cost based on a single allocation base, such as labor or machine hours. Michael Ltd's fixed manufacturing overhead is $30,000, which is a sunk cost since the cost is already committed and can not be changed.
Therefore, it is necessary to allocate the $30,000 fixed manufacturing overhead cost to the 20,000 calculators that Michael Ltd produces annually.
Using the traditional method, the cost allocation base for Michael Ltd is direct labor hours. The company uses the following information to allocate the fixed manufacturing overhead cost: Direct materials per unit
= $5Direct labor cost per unit
= $2Variable manufacturing overhead cost per unit
= $3Total variable cost per unit
= $10Total cost per unit
= $14Selling price per unit
= $20The direct labor hours per unit are calculated as follows: Direct labor hours per unit
= Direct labor cost per unit / Direct labor rate
= $2 / $10 per hour
= 0.2 direct labor hours per unit to calculate the predetermined overhead rate, we divide the total fixed manufacturing overhead cost by the total direct labor hours as follows: Predetermined overhead rate
= Total fixed manufacturing overhead cost / Total direct labor hours
= $30,000 / 4,000 direct labor hours
= $7.5 per direct labor hourFinally, to allocate the fixed manufacturing overhead cost to the calculators produced, we multiply the predetermined overhead rate by the direct labor hours per unit.
Thus, the fixed manufacturing overhead cost per unit is: Fixed manufacturing overhead cost per unit = Predetermined overhead rate x Direct labor hours per unit
= $7.5 per direct labor hour x 0.2 direct labor hours per unit
= $1.5 per unit therefore, the total cost of the calculators produced is: Total cost per unit
= Variable cost per unit + Fixed manufacturing overhead cost per unit= $10 per unit + $1.5 per unit
= $11.5 per unitHence, Michael Ltd's total annual cost of producing 20,000 calculators is: Total cost of producing 20,000 calculators
= Total cost per unit x Number of units produced= $11.5 per unit x 20,000 units= $230,000Therefore, Michael Ltd's total annual production cost is $230,000.
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Which of the following statements concerning target costing is not true? A. Target costing can be applied to components of products as well as the new products as a whole. B. Short product life cycles increase the importance of target costing. C. Implementing target costing requires detailed information on the cost of alternative activities. D. A primary advantage of target costing is that it requires little or no coordination among processes.
The statement that is not true concerning target costing is D. A primary advantage of target costing is that it requires little or no coordination among processes.
Target costing is a strategic cost management technique used by businesses to manage costs during the product development phase. It involves setting a target cost for a product based on the price that customers are willing to pay, and then working backward to determine the allowable cost of the product.
Option A is true: Target costing can be applied to components of products as well as new products as a whole. It allows businesses to identify cost reduction opportunities at various levels, whether it's individual components or the overall product.
Option B is true: Short product life cycles increase the importance of target costing. In industries where products have short life cycles, such as technology or fashion, it is crucial to manage costs effectively to stay competitive and meet customer demands.
Option C is true: Implementing target costing requires detailed information on the cost of alternative activities. To determine the target cost, businesses need to analyze the cost of various activities involved in the production process, identify cost drivers, and explore alternative options to reduce costs.
Option D is not true: A primary advantage of target costing is not that it requires little or no coordination among processes. In fact, implementing target costing requires coordination and collaboration among various functions within the organization, such as design, engineering, production, and finance. Effective communication and collaboration are necessary to align the target cost with the desired product features, identify cost reduction strategies, and implement changes throughout the development process.
In summary, option D is the statement that is not true concerning target costing. Target costing requires coordination and collaboration among processes to achieve the desired cost objectives while meeting customer requirements.
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J. Jones sells one-half of his partnership to J. Denim for
$5,000 cash. The entry to record this transaction will include a
(debit/credit) to J. Denim, Capital.
The entry to record the transaction of J. Jones selling one-half of his partnership to J. Denim for $5,000 cash will include a credit to J. Denim, Capital.
When a partner sells a portion of their partnership interest to another partner, it is considered a transaction between the partners and does not affect the partnership's overall financial position. The selling partner, J. Jones, will reduce their capital account since they are selling a portion of their ownership in the partnership.
By crediting J. Denim, Capital, we are increasing J. Denim's capital account to reflect the additional investment made in the partnership. J. Denim is effectively purchasing a portion of the partnership interest from J. Jones, and the cash paid for this purchase increases J. Denim's capital account.
The entry to record the transaction would look like this:
Debit: Cash (for the $5,000 received)
Credit: J. Denim, Capital (to increase J. Denim's capital account)
This entry reflects the transfer of ownership from J. Jones to J. Denim and properly records the transaction in the partners' capital accounts. It is important to note that this transaction does not affect the partnership's overall capital balance, as it represents a reallocation of ownership between the partners.
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On January 1, 2020, Sitra Company leased equipment from National Corporation. Lease payments are $100,000, payable annually beginning on January 1, 2020 for 20 years. The lease is non-cancelable.
The following information pertains to the agreement:
1. The fair value of the equipment on January 1, 2020 is $850,000
2 The estimated economic life of the equipment was 25 years on January 1, 2020 with guaranteed residual value of $25,000
3. The lease is non-renewable. At the termination of the lease, the equipment reverts to the lessor 4. The lessor's implicit rate is 10% which is known to Sitra. Sitra's incremental borrowing rate is 12% (The PV of $1 for 20 periods at 10% is 0.14864 and the PV for an ordinary annuity of $1 for 20 periods at 10% is 8.51356).
5. Sitra uses straight-line method for depreciation.
Instructions:
A) Compute the present value of minimum lease payments.
B) Prepare all necessary journal entries on the lessee's books for the year 2020
A) The Answer is :
Present Value of Minimum Lease Payments = $971,224Compute the Present Value of Minimum Lease Payments:
To compute the present value of minimum lease payments, we need to discount the future lease payments using the lessee's incremental borrowing rate of 12%. The annual lease payment is $100,000 for 20 years. Using the present value of an ordinary annuity formula, we can calculate the present value factor.
Present Value Factor = [1 - (1 + r)^(-n)] / rWhere:
r = Incremental borrowing rate = 12%n = Number of periods = 20Present Value Factor = [1 - (1 + 0.12)^(-20)] / 0.12Present Value Factor = 9.71224Present Value of Minimum Lease Payments = Annual Lease Payment × Present Value FactorPresent Value of Minimum Lease Payments = $100,000 × 9.71224Present Value of Minimum Lease Payments = $971,224Therefore, the present value of minimum lease payments is $971,224.
B) The Answer Is :
Journal Entries Year 2020, Cash. $100,000Prepare Journal Entries on the Lessee's Books for the Year 2020:
January 1, 2020:
Leased Equipment $850,000Lease Liability $971,224Cash $121,224(To record the lease agreement and initial payment)
December 31, 2020:
Lease Expense $38,561Interest Expense $97,122Lease Liability $61,561Cash $100,000(To record lease expense, interest expense, and lease payment)
The lease liability is reduced by the lease payment of $100,000, and the difference between the lease payment and interest expense is recognized as lease expense. The interest expense is calculated based on the remaining lease liability at the beginning of the year and the lessee's incremental borrowing rate of 12%.
About Journal EntryIn accounting and bookkeeping, journals are all financial transactions of a business entity or organization that are recorded chronologically and aim to record data, including the number of transactions, the names of transactions that either affect or are affected, and the time the transaction takes place.
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Find the sale price when the original price is $68.00 and the discount rate is 38%.
a $2.58
C. $42.16
b. $25.84
d. $65.42
The sale price, with an original price of $68.00 and a discount rate of 38%, is $42.16. Therefore, the correct option is (C).
To find the sale price, we need to calculate the discount amount and subtract it from the original price.
Discount amount = Original price × Discount rate
Discount amount = $68.00 × 0.38 = $25.84
Sale price = Original price - Discount amount
Sale price = $68.00 - $25.84 = $42.16
Therefore, the correct answer is:
C. $42.16
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A large electric utility company spews 62 million tons of greenhouse gases (mostly carbon dioxide) into the environment each year This company has committed to spending $2.1 billion in capital over the next five years to reduce its annual emissions by 6%. More will be spent after five years to reduce greenhouse gases further. D a. What is the implicit cost of a ton of greenhouse gas? 51 b. If the United States produces 2 billion tons of greenhouse gases each year, how much capital must be spent to reduce total emissions by 4% over the next five years based on your answer in Part (a)?
a. The implicit cost of greenhouse gas is $__- per ton (Round to the nearest cent.)
a. The implicit cost of greenhouse gas is $33.87- per ton (Round to the nearest cent.). $2,709,600,000 must be spent to reduce total emissions by 4% over the next five years
The implicit cost of greenhouse gas: An implicit cost is an indirect cost that is not visible. When making a decision, it is a cost that has already been incurred but is not visible. It is the chance cost of using a company's or individual's current resources. .
The implicit cost of greenhouse gas can be calculated by dividing the money spent by the amount of greenhouse gases reduced. In this case, the electric utility company is spending $2.1 billion in capital over the next five years to reduce its annual emissions by 6%.
We can calculate the amount of greenhouse gases the company is reducing by multiplying its current greenhouse gases by 6%: 62,000,000 x 0.06 = 3,720,000. Then we can calculate the implicit cost of greenhouse gas by dividing $2.1 billion by 3,720,000:2,100,000,000 / 3,720,000 = 564.51612903Then we convert it to per ton:564.51612903 / 16 = 33.87099557
b. If the United States produces 2 billion tons of greenhouse gases each year, we can find the total amount of greenhouse gases that need to be reduced in order to reach a 4% reduction: 2,000,000,000 x 0.04 = 80,000,000 Then we can calculate the capital needed to reduce 80,000,000 tons of greenhouse gases by using the implicit cost per ton we found in Part (a): 80,000,000 x $33.87 = $2,709,600,000. Therefore, $2,709,600,000 must be spent to reduce total emissions by 4% over the next five years based on our answer in Part (a).
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Katie likes to paint and sit in the sun. Her utility function is U(P, S) = 3PS + 6P, where P is the number of paint brushes and S is the number of straw hats. The price of a paint brush is $1 and the price of a straw hat is $5. Katie has $50 to spend on paint brushes and straw hats. Solve Katie's utility-maximization problem using a Lagrangian. How much does Katie's utility increase if she receives an extra dollar to spend on paint brushes and straw hats?
Katie's utility will rise by 15 if she receives an extra dollar to spend on paintbrushes and straw hats.
In order to solve Katie's utility-maximization problem using a Lagrangian, the following steps should be followed:
Step 1: The problem's utility function is
U(P, S) = 3PS + 6P.
Katie has $50 to spend on paint brushes and straw hats, and the price of a paintbrush is $1 and a straw hat is $5.
Step 2: The utility function, subject to the budget constraint, will be optimized.
3PS + 6P is the utility function, and the budget constraint is
P + 5S = 50 or P = 50 - 5S.
Step 3: In this stage, the Lagrangian formula is used to solve the issue.
L = 3PS + 6P - λ(P + 5S - 50).
Taking the derivative of the equation with respect to P, we get:
3S - λ = 0 or λ = 3S.
Taking the derivative of the equation with respect to S, we get:
3P - λ5 = 0 or λ = 15P/3.
We will equate the two expressions for λ and solve for S.
3S = 15P/3S = 5P, and
S = 5P/3.
Katie's budget constraint equation,
P + 5S = 50, is used to solve for P.
P + 5(5P/3) = 50 or
P = 10.
Therefore, S = 50/3.
Step 4: Katie's utility function will be calculated using these values.
U(10, 50/3) = 3(10)(50/3) + 6(10) = 220.
Step 5: The partial derivative of the Lagrangian function
L = 3PS + 6P - λ(P + 5S - 50) with respect to λ is as follows:
P + 5S - 50 = 0.
The marginal utility of an additional dollar is the value of the derivative: λ, which is 15 (because λ = 3S, and S = 50/3).
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Jackson Ltd expects a new enterprise to generate a gross contribution margin of 40% (calculated as a percentage of sales). Variable selling expenses are expected to be an additional 10% (calculated as a percentage of sales), and fixed overheads £12.000 per month.
Calculate the sales revenue necessary to yield a monthly net profit margin of 10% (calculated as a percentage of sales).
A. £30,000
B. £40,000
C.£60,000
D. £66,000
Therefore, the sales revenue necessary to yield a monthly net profit margin of 10% is £60,000. The correct option is C.
To calculate the sales revenue necessary to yield a monthly net profit margin of 10%, we need to consider the variable costs, fixed costs, and desired net profit margin.
Gross Contribution Margin: 40%
Variable Selling Expenses: 10%
Fixed Overheads: £12,000 per month
Desired Net Profit Margin: 10%
Let's denote the sales revenue as "X".
The gross contribution margin is calculated as a percentage of sales, so it can be expressed as 40% of X: 0.40X.
The variable selling expenses are also calculated as a percentage of sales, which is 10% of X: 0.10X.
Therefore, the contribution margin after deducting variable selling expenses is:
Contribution Margin = Gross Contribution Margin - Variable Selling Expenses
= 0.40X - 0.10X
= 0.30X
Now, we can calculate the contribution margin that covers the fixed costs:
0.30X - £12,000 = desired net profit margin * X
Since the desired net profit margin is 10% (or 0.10), we have:
0.30X - £12,000 = 0.10X
Simplifying the equation:
0.30X - 0.10X = £12,000
0.20X = £12,000
X = £12,000 / 0.20
X = £60,000
Therefore, the sales revenue necessary to yield a monthly net profit margin of 10% is £60,000.
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Thomas is a graduate student who can afford only two varieties of food: canned beans and ramen noodles. If Thomas buys only one type of good he can afford either 100 packs of ramen noodles or 20 cans of beans. If the 10th pack of ramen yields Thomas a marginal utility of 20, what must be the marginal utility of the 6th can of beans for this to be the utility maximizing choice?
I need a graph as well Please!
Please explain each and every step.
The marginal utility of the 6th can of beans for this to be the utility maximizing choice is 12.
Marginal utility means extra satisfaction or utility received from consuming additional unit of goods.
To determine the marginal utility of the 6th can of beans:
Marginal utility of the 10th pack of ramen noodles = 20 (Given)
Let marginal utility of the 6th can of beans be MU(6).
MU(6) / Price of 6 cans of beans = MU(10) / Price of 10 packs of ramen noodles
MU(6) / (6 cans of beans) = 20 / (10 packs of ramen noodles)
MU(6) / 6 = 20 / 10
MU(6) / 6 = 2
= 2 × 6
= 12
Therefore, the marginal utility of the 6th can of beans must be 12 for this to be the utilize maximum when compared to the marginal utility of the 10th pack of ramen noodles with marginal utility of 20.
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Johnson, Inc. has 3.8 million shares of common stock outstanding and is subject to a corporate tax rate of 21 percent. The firm currently has no debt. The expected annual earnings before taxes of $3.5 million in perpetuity and it distributes all of its earnings as dividends at the end of each year. The current required return on the firm’s equity is 10.5 percent. The firm is planning a recapitalization under which it will issue $5 million of perpetual 5 percent debt and use the proceeds to buy back shares.
a. What is the price per share prior to announcement?
b. What is the vlaue of the firm and price per share uder APV method after the recapitalization plan is announced?
c. How may share will be repurchased? What is the price per share after the completion of the repurchase program?
a) Price per share = $8.76. b) Price per share = $9.05. c) after the completion of the repurchase program, the price per share will be approximately $7.91.
How to find the price per share prior to announcementTo solve this problem, we can use the Adjusted Present Value (APV) method. Let's calculate the different components:
a. Price per share prior to the announcement:
To calculate this, we need to determine the value of the firm without the recapitalization. We can use the perpetuity formula to find the value of the firm:
Value of the firm = Earnings before taxes / Required return on equity
Value of the firm = $3.5 million / 0.105 (10.5%)
Value of the firm = $33.33 million
Now, we can calculate the price per share:
Price per share = Value of the firm / Number of shares outstanding
Price per share = $33.33 million / 3.8 million
Price per share = $8.76
b. Value of the firm and price per share under the APV method after the recapitalization plan is announced:
In this case, we need to consider the tax shield from the interest expense of the debt. Let's calculate the value of the tax shield first:
Tax shield = Tax rate * Debt
Tax shield = 0.21 (21%) * $5 million
Tax shield = $1.05 million
Now, we can calculate the value of the firm:
Value of the firm = Value of the firm without debt + Value of the tax shield
Value of the firm = $33.33 million + $1.05 million
Value of the firm = $34.38 million
Next, we can calculate the price per share:
Price per share = Value of the firm / Number of shares outstanding
Price per share = $34.38 million / 3.8 million
Price per share = $9.05
c. Number of shares repurchased and price per share after the completion of the repurchase program:
To calculate the number of shares repurchased, we need to use the proceeds from the debt issuance divided by the price per share after the announcement:
Number of shares repurchased = Debt issued / Price per share after the announcement
Number of shares repurchased = $5 million / $9.05
Number of shares repurchased ≈ 552,486 shares
Now, we can calculate the price per share after the completion of the repurchase program:
Price per share = Price per share after the announcement * (1 - (Number of shares repurchased / Number of shares outstanding))
Price per share = $9.05 * (1 - (552,486 / 3.8 million))
Price per share ≈ $7.91
So, after the completion of the repurchase program, the price per share will be approximately $7.91.
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Discussion of Torts 10 pts In the business environment, tort causes of action can put a company out of business. It important for the astute business owner to understand the risk the company is taking
In the business environment, a tort refers to a wrongful act that results in injury to an individual or damage to property. It is a civil offense, as opposed to a criminal offense. Tort causes of action can put a company out of business because they may result in high financial settlements or judgments.
There are several types of torts that a business owner should be aware of. These include intentional torts, negligence, and strict liability. Intentional torts occur when an individual or business intentionally commits an act that results in injury or damage. Examples include assault, battery, and defamation. Negligence occurs when an individual or business fails to exercise reasonable care and causes injury or damage.
In conclusion, understanding tort law and the risks associated with it is critical for any business owner. By taking steps to mitigate those risks, a business owner can protect their company and ensure its long-term success.
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at common law, the person who used a symbol or mark to identify a business or product was protected in the use of that trademark. true false
True. At common law, the person who used a symbol or mark to identify a business or product was protected in the use of that trademark.
What is a trademark?
A trademark is a unique symbol, logo, phrase, word, or a combination of these that distinguishes the goods and services of one company from those of another. It can be a brand, a logo, or a slogan that makes it unique from others. Trademarks can be registered, which gives them the status of property that is owned by the registrant.
Why is a trademark important?
A trademark is crucial because it provides legal protection to the brand owner. It prohibits others from using the same or similar mark without permission. If a competitor or other third party uses a trademark, the owner of the trademark can bring a lawsuit against them for infringement of the trademark.
Therefore, if someone uses a symbol or mark to identify a business or product, they will be protected in the use of that trademark. This statement is true.
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TRUE / FALSE. The top management team are the organization's group of senior executives responsible for the day to day functions and these are the people that make the most contributions to any organization. True F
False. The statement is not entirely accurate. While the top management team consists of senior executives who play a crucial role in decision-making and setting the strategic direction of the organization, it is not accurate to say that they are solely responsible for the day-to-day functions or that they make the most contributions to the organization.
The top management team is primarily responsible for formulating strategies, setting goals, and providing overall guidance to the organization. They are tasked with making critical decisions that impact the long-term success and direction of the company. However, the day-to-day functions of the organization are typically carried out by various departments and teams throughout the organization.
Each department within the organization, such as operations, finance, marketing, human resources, and others, has its own set of responsibilities and contributes to the functioning of the organization. Frontline employees, middle managers, and other staff members also play a significant role in executing tasks, implementing strategies, and delivering value to customers.
It is important to recognize that contributions to an organization come from various levels and functions within the company. While top management sets the vision and direction, it is the collective effort of all employees that drives the success of the organization. Collaboration, teamwork, and effective coordination between different levels and departments are crucial for achieving goals.
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When the social value and the private value are equal to one another but social cost is higher than the private cost, the private market outcome will be _than the outcome desired by the higher, producers O higher, society O lower, society O None of the other alternatives are correct
When the social value and the private value are equal to one another but social cost is higher than the private cost, the private market outcome will be lower than the outcome desired by the society. The correct answer is option C.
When the social value and the private value are equal to one another but social cost is higher than the private cost, the private market outcome will be lower than the outcome desired by the higher, society because the private market does not take into account the negative externalities of economic activities.
In other words, when the social value and private value are equal, it suggests that the private benefits of the production activity are equal to the social advantages. However, when the social cost is higher than the private cost, it suggests that the private market is not considering the negative externalities of the economic activity.
This is because the private market is only concerned with the private benefits and costs associated with the economic activity, whereas the social cost is borne by society as a whole.
In conclusion, when social cost is higher than the private cost, the private market outcome will be lower than the outcome desired by the society.
Hence, option C is the right answer.
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