The ROP (Reorder Point) consistent with the desired service level of 90 percent is approximately 25.08 gallons. Assuming average demand, there are approximately 12 days of supply on hand at the ROP.
To calculate the ROP, we need to consider the lead time and desired service level. The lead time in this case is two days, and the dairy is open seven days a week. Therefore, the total demand during the lead time is 2 days multiplied by the average demand per day.
Given that the demand for walnut fudge ice cream follows a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.5 gallons per week, we can calculate the average demand per day by dividing the mean by the number of days the dairy is open in a week, which is 7. So, the average demand per day is 21 gallons per week divided by 7 days, which is approximately 3 gallons per day.
Multiplying the average demand per day (3 gallons) by the lead time (2 days), we get a total demand of 6 gallons during the lead time.
To determine the ROP, we need to consider the desired service level. In this case, the new manager desires a service level of 90 percent, which means there is a 10 percent chance of stockout.
Using a standard normal distribution table or a statistical software, we can find the z-score corresponding to a 10 percent chance. The z-score for a 90 percent service level is approximately 1.28.
Next, we calculate the safety stock by multiplying the standard deviation (3.5 gallons) by the z-score (1.28). The safety stock is approximately 4.48 gallons.
Finally, we calculate the ROP by adding the safety stock (4.48 gallons) to the total demand during the lead time (6 gallons). The ROP is approximately 10.48 gallons, which we can round up to 11 gallons.
Assuming average demand, we can subtract the ROP (11 gallons) from the average demand per day (3 gallons) multiplied by the number of days the dairy is open in a week (7 days) to calculate the number of days of supply on hand at the ROP. This is approximately 12 days.
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one reason the aggregate demand curve is downward sloping is because of the question options: interest rate effect. welfare effect. price effect. tariff effect.
The main reason the aggregate demand curve is downward sloping is due to the interest rate effect. When the overall price level decreases, households and businesses can afford to borrow more, leading to increased consumption and investment, which raises aggregate demand.
The interest rate effect is a key determinant of the downward slope of the aggregate demand curve. When the overall price level falls, individuals and businesses can afford to borrow money at lower interest rates. This leads to increased consumption and investment, as borrowing becomes more attractive. Consequently, aggregate demand rises. Conversely, when the overall price level rises, borrowing becomes more expensive due to higher interest rates. This discourages consumption and investment, leading to a decrease in aggregate demand. Thus, changes in the price level have an inverse relationship with the interest rate, influencing borrowing costs and subsequently affecting aggregate demand.
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suppose that the value of the euro fell from $1.47 on january 1, 2009 to $1.40 on january 12, 2009. this implies that:
The statement, "suppose that the value of the euro fell from $1.47 on January 1, 2009, to $1.40 on January 12, 2009. this implies that" can be completed as the euro decreased in value against the dollar.
It is because a drop in the value of the currency means it can purchase fewer amounts of another currency per unit. The currency exchange rate represents the value of one currency in terms of another currency. A currency can appreciate or depreciate based on supply and demand factor . Suppose that the value of the euro fell from $1.47 on January 1, 2009, to $1.40 on January 12, 2009. This implies that the euro decreased in value against the dollar.
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Le Wood, Inc. Le Wood, Inc. makes furniture sets. During April, the purchasing agent bought 25,600 pounds of lumber at $1.94 per pound. During the month, 21,400 pounds of lumber were used to produce 600 furniture sets. Each set requires a standard quantity of 35 pounds at a standard cost of $1.90 per pound. The company applies fixed overhead at a rate of $3 per direct labor hour. Each furniture produced is expected to take 30 direct labor hours. Paper Products expected production in the current year to be 750 sets but 600 units were actually produced. Actual direct labor hours were 19,000 and actual fixed overhead costs were $62,000. REQUIRED 1. Find the direct material price variance (based on the quantity PURCHASED) for April. 2. Find the direct material quantity variance (based on quantity USED) for April.
1. The direct material price variance for April is $6,400 favorable.
2. The direct material quantity variance for April is $1,700 unfavorable.
1. The direct material price variance is calculated by multiplying the difference between the actual price and the standard price by the quantity purchased.
Actual quantity purchased = 25,600 pounds
Actual price = $1.94 per pound
Standard price = $1.90 per pound
Direct material price variance = (Actual price - Standard price) x Actual quantity purchased
= ($1.94 - $1.90) x 25,600 pounds
= $0.04 x 25,600 pounds
= $1,024 favorable
Therefore, the direct material price variance for April is $1,024 favorable.
2. The direct material quantity variance is calculated by multiplying the difference between the actual quantity used and the standard quantity by the standard price.
Actual quantity used = 21,400 pounds
Standard quantity = 600 sets x 35 pounds per set = 21,000 pounds
Standard price = $1.90 per pound
Direct material quantity variance = (Actual quantity used - Standard quantity) x Standard price
= (21,400 pounds - 21,000 pounds) x $1.90 per pound
= 400 pounds x $1.90 per pound
= $760 unfavorable
Therefore, the direct material quantity variance for April is $760 unfavorable.
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Course: Introduction to Economics - Growth and
CPI
Walking through your Faculty, you hear someone say, "Whenever
you read a CPI inflation figure, remember that actual inflation is
higher, because CPI
The statement "Whenever you read a CPI inflation figure, remember that actual inflation is higher, because CPI understates inflation." is usually true because it employs a basket of goods that does not precisely reflect the items that consumers buy every day. It is essential to keep in mind that CPI is a rough indicator of inflation, and the actual cost of living may vary depending on various personal variables.
The Consumer Price Index (CPI) is a widely used measure of inflation that tracks the average price change of a basket of goods and services consumed by households. However, there are some limitations to the CPI that can lead to an understatement of actual inflation:
Substitution bias: The CPI assumes that consumers do not change their consumption patterns in response to price changes. In reality, when the price of a particular good or service increases, consumers may substitute it with a cheaper alternative. The CPI does not fully account for this substitution behavior, which can lead to an understatement of inflation.Quality changes: The CPI does not always capture improvements in the quality of goods and services over time. If the quality of a product improves while its price remains the same, the CPI may not fully reflect the increased value received by consumers. This can result in an understatement of inflation.New products and outlets: The CPI may not adequately capture the introduction of new products or changes in the way goods and services are purchased. As new products enter the market or consumers shift their shopping preferences to different outlets, the CPI may not fully account for these changes, leading to a potential understatement of inflation.Overall, while the CPI is a useful indicator of inflation, it is important to recognize its limitations and understand that actual inflation may be higher than what is reported by the CPI.
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one primary purpose or function of a company’s social media information system (smis) is to connect the company’s ____
One primary purpose or function of a company's Social Media Information System (SMIS) is to connect the company's social media accounts with its target audience or customers.
SMIS allows companies to establish and maintain a presence on various social media platforms. It provides a centralized system to manage and interact with the company's social media accounts, enabling effective communication and engagement with customers.
By connecting the company's social media accounts, SMIS helps in:
1. Building brand awareness: Companies can use social media platforms to promote their brand, products, and services, reaching a wider audience and increasing brand visibility.
2. Customer engagement: SMIS facilitates direct communication with customers, allowing companies to respond to queries, address concerns, and provide timely customer support.
3. Marketing and promotions: SMIS enables companies to create and share content, run targeted advertising campaigns, and track the effectiveness of their marketing efforts.
4. Gathering customer feedback: Companies can leverage SMIS to gather customer feedback, conduct surveys, and gain insights into customer preferences and opinions.
Overall, the primary function of a company's SMIS is to connect the company with its target audience, foster engagement, and support various social media marketing and communication activities.
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what are 3 advantages of a product owner with a clear and well communicated product goal?
The following are three advantages of a product owner with a clear and well-communicated product goal: 1. Alignment of team efforts A clear and well-communicated product goal will help the development team understand the purpose of the product and how it is expected to function. 2. Better prioritization of features When the product owner has a clear and well-communicated product goal, it becomes easier to prioritize the features of the product. 3. Improved customer satisfactionWhen the product owner has a clear and well-communicated product goal, it is easier to deliver a product that meets the customer's needs.
Having a product owner with a clear and well-communicated product goal can bring several advantages to a development team and the overall product development process. Three key advantages are:
Alignment and Focus: A clear and well-communicated product goal provides the development team with a shared understanding of what needs to be achieved. It aligns everyone's efforts toward a common objective, ensuring that everyone is on the same page and working towards a unified vision. This alignment and focus help streamline decision-making, prioritize tasks, and avoid wasted efforts on activities that do not contribute to the product's ultimate goal.Efficient Resource Allocation: When the product goal is clearly defined and effectively communicated, it becomes easier to allocate resources efficiently. The product owner can prioritize features, functionalities, and user requirements based on their alignment with the goal, enabling the team to make informed decisions about resource allocation. This leads to optimized development efforts, reduced waste, and improved productivity.Stakeholder and User Satisfaction: A clear product goal helps manage stakeholder expectations and ensures that the end product meets user needs effectively. By understanding the desired outcome, the product owner can gather feedback, perform market research, and make informed decisions on feature prioritization and user experience. This results in a product that aligns with customer expectations and satisfies stakeholder requirements, increasing overall satisfaction and reducing the risk of rework or dissatisfaction.Overall, a product owner with a clear and well-communicated product goal brings alignment, focus, efficient resource allocation, and stakeholder satisfaction. These advantages contribute to more effective product development, better collaboration within the team, and ultimately a higher likelihood of creating a successful and impactful product.
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Which of the following is NOT one of the advantages associated with multinational corporations? O the capacity to tap into new technology from around the world O significantlabor savings, even in highly unionized countries the ability to shift production from one plant to another as market conditions change a positive exchange rates the ability to sidestep regulatory problems
The advantage that is not associated with multinational corporations is "significant labor savings, even in highly unionized countries.
"Explanation: Multinational corporations are the companies that operate in multiple countries. These corporations have several advantages. They have the ability to tap into new technology from around the world, the ability to shift production from one plant to another as market conditions change, and a positive exchange rate. They also have the ability to sidestep regulatory problems. The corporations have multiple benefits associated with them.
These advantages may range from economic benefits to advantages to the community. However, the significant labor savings, even in highly unionized countries is not one of the advantages associated with multinational corporations. Instead, multinational corporations face criticism from labor unions, who argue that these corporations pay too little and provide poor working conditions.
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a 6.40 percent coupon bond with 10 years left to maturity is priced to offer a 7.8 percent yield to maturity. you believe that in one year, the yield to maturity will be 7.0 percent. assuming semiannual interest payments, what is the change in price the bond will experience in dollars?
The change in price the bond will experience in dollars is approximately $-5.43.
To calculate the change in price, we need to find the present value of the bond's cash flows at the new yield to maturity.
Given:
Coupon rate = 6.40% (or 0.064)
Yield to maturity (initial) = 7.8% (or 0.078)
Yield to maturity (new) = 7.0% (or 0.07)
Time to maturity = 10 years
Since the bond pays semiannual interest, it will have 20 periods (10 years * 2 periods per year).
Using the formula for present value of a bond, the price of the bond at the initial yield to maturity can be calculated as follows:
PV = (C / 2) * [1 - (1 + r)⁻ⁿ] / r + F / (1 + r)ⁿ
Where:
C = Coupon payment
r = Yield to maturity
n = Number of periods
F = Face value of the bond
Using the given values, we can calculate the price of the bond at the initial yield to maturity:
C = 0.064 * Face value / 2
r = 0.078 / 2
n = 20
F = Face value
Next, we calculate the present value of the bond's cash flows at the new yield to maturity of 7.0% using the same formula but with the updated yield to maturity:
C = 0.064 * Face value / 2
r = 0.07 / 2
n = 19 (as one year has passed)
F = Face value
Finally, we find the difference between the two prices to determine the change in price.
Step 1: Calculate the present value of the bond at the initial yield to maturity.
Coupon payment per period:
C = 0.064 * $1000 / 2 = $32
Number of periods:
n = 10 years * 2 = 20
Yield to maturity per period:
r = 0.078 / 2 = 0.039
Present value of the bond:
PV = (C / 2) * [1 - (1 + r)⁻ⁿ] / r + F / (1 + r)ⁿ
= ($32 / 0.039) * [1 - (1 + 0.039)(-20)] + $1000 / (1 + 0.039)20
≈ $747.78
Step 2: Calculate the present value of the bond at the new yield to maturity.
Coupon payment per period and number of periods remain the same.
New yield to maturity per period:
r_new = 0.07 / 2 = 0.035
Present value of the bond at the new yield to maturity:
PV_new = ($32 / 0.035) * [1 - (1 + 0.035)(-20)] + $1000 / (1 + 0.035)20
≈ $753.21
Step 3: Calculate the change in price.
Change in price = PV_new - PV
= $753.21 - $747.78
≈ $5.43
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Assume that l2t = 0.15% and that it = 0. If the one-year interest rate is 5% and the two-year interest rate is 5.75%, then it is equal to: t+1 OA. 5.90% OB. 6.20% OC. 5.15% OD. 5.60%
The one-year interest rate (it) is approximately 0.300225% OC. 5.15%.
To calculate the implied one-year interest rate (it),
(1 + it) = (1 + l2t)² / (1 + lt)
Given:
l2t = 0.15%
it = 0 (implied one-year interest rate)
t+1 = unknown
substitute the values into the formula:
(1 + 0) = (1 + 0.0015)² / (1 + lt)
Simplifying the equation:
1 = (1.0015)² / (1 + lt)
1 = 1.00300225 / (1 + lt)
1 + lt = 1.00300225
lt = 1.00300225 - 1
lt = 0.00300225
To convert the annual interest rate to a percentage,
lt = 0.00300225 × 100
lt = 0.300225%
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2) (15 points) Suppose that the utility possibilities curve of a 2 person economy is given by the equation u + Au = 20 where A E R+ and the social welfare function of the economy is W(U₁₁U₂) = U
For every point on the , the contract curve utility possibilities frontier depicts the utility levels of the two customers. The utility of one consumer is plotted on the vertical axis, and the utility of the other consumer is displayed on the horizontal axis.
the graph illustrating the maximum degree of utility that any individual can achieve given the utility levels of other members of society. It represents the outer limits of a range of economic agents' utility possibilities for the specified level of production.
calculates each person's contribution to society's overall welfare. No matter how useful they were at first, everyone is treated equally.
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Which of the following is the correct assumption under variable and absorption costing?
O Variable manufacturing costs per unit remain constant, while fixed costs vary
O Variable manufacturing costs per unit remain constant, and fixed manufacturing costs remain constant
O Variable costs remain constant, while fixed costs are ignored
O Variable costs are ignored while fixed costs remain constant
The correct assumption under variable and absorption costing Variable manufacturing costs per unit remain constant, while fixed costs vary Therefore the correct option is A.
Variable manufacturing costs per unit are costs that vary with changes in the number of units produced. These costs include direct materials, direct labor, and other variable expenses. In contrast, fixed costs are expenses that do not change with the number of units produced, such as rent, equipment, and salaries.
Therefore, if production increases, variable costs increase proportionally, while fixed costs remain constant. As a result, the total cost per unit decreases with an increase in production levels. However, if production decreases, fixed costs spread over fewer units, resulting in a higher cost per unit.
Hence the correct option is A
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Machine hours are used to absorb overheads in a production cost centre. Overheads allocated and apportioned to the cost centre are: $ Allocated 13,122 Apportionned 7,920 Reapportioned from service cost centers 2,988 216,000 units of product are manufactured at a rate of 120 units per machine hour. What is the overhead absorption rate per machine hour?
The overhead absorption rate per machine hour is $1.08.
The overhead absorption rate is calculated by dividing the overheads absorbed by the actual machine hours worked. So, we need to calculate the overheads absorbed first.
Overheads absorbed = Allocated + Apportioned + Reapportioned= 13,122 + 7,920 + 2,988= $24,030Then, we need to calculate the actual machine hours worked:
Machine hours = Units produced ÷ Rate per hour= 216,000 ÷ 120= 1,800
Now, the overhead absorption rate per machine hour can be calculated as:
Overhead absorption rate = Overheads absorbed ÷ Machine hours= $24,030 ÷ 1,800= $13.35
But we are asked to calculate the overhead absorption rate per machine hour.
So, we divide the overhead absorption rate by the number of machine hours:
Overhead absorption rate per machine hour = Overhead absorption rate ÷ Rate per hour= $13.35 ÷ 12= $1.08
Thus, the overhead absorption rate per machine hour is $1.08.
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Casinos attain a profit by collecting the bets/wagers placed by guests, but giving back on average a % of revenues as winnings for the customers and incurring costs of running the operations in a casino utilizing various resources. In a typical month, the casino’s gambling area (excluding the food, beverages and lodging) had the following revenues and expenses: There were 500,000 guests. You can assume that all guests will wager the average amount always.
Revenues (wagers by guests) $10,000,000
Winnings given back to Guests $3,000,000 (as a % of revenues)
Labor Costs (salaries) $1,000,000
Commissions for employees $700,000 (as a % of revenues)
Utilities (unrelated to the number of guests) $600,000
Utilities (related to the number of guests) $300,000
Depreciation on Casino buildings $2,000,000 and equipment
Other monthly admn. and facility costs $400,000
The casino pays combined state and federal taxes equal to 25% of profit before taxes.
1. What is the breakeven in dollars?
2. How many Diamond Jubilee guests are needed or how much should be the total wagers by guests in a month for the casino to earn an after-tax income of $2,000,000?
3. What is the operating leverage in a typical month? What will be the operating leverage if the number of guests were to drop by 50% because of an outbreak?
1. Break-even in dollars is $701,000 2. No of jublee guest should be 500,000 3 Operating leverage = 30.45 but if umber of guests were to drop by 50% because of an outbreak then the Operating leverage = -5.4.
Breakeven point can be calculated using the following formula;Break-even point = Fixed costs / Contribution margin.The contribution margin is the revenue remaining after the variable costs have been subtracted from the total revenue. The fixed cost is constant and does not change with the level of production.
Total Revenue - Variable Costs - Fixed Costs = 0Contribution Margin = Total Revenue - Variable CostsBreakeven point = Fixed costs / Contribution marginIn this case, Fixed Costs are: $1,000,000 (labor costs) + $700,000 (commissions) + $600,000 (unrelated utilities) + $2,000,000 (depreciation) + $400,000 (other admin costs) = $4,700,000. The Contribution Margin will be the difference between Revenues and variable costs.
Variable costs here are winnings and the related utilities, which is $3,300,000 ($3,000,000 + $300,000). Therefore; Breakeven point = $4,700,000 / ($10,000,000 - $3,300,000) Breakeven point = $4,700,000 / $6,700,000Breakeven point in dollars = $0.701 or $701,000.
2. Total wager by guests required for the casino to earn after-tax income of $2,000,000.
The net income of the casino is $2,000,000 after-tax income. In this case, total revenue, variable costs and fixed costs remain constant. The taxes are deducted from the profits. As taxes are equal to 25% of profit before taxes, the profit before taxes is $2,000,000 / (1 - 0.25) = $2,666,667.
To achieve this profit before taxes, the total revenue required will be;Total Revenue = Variable Costs + Fixed Costs + Profit before taxesTotal Revenue = $3,300,000 (variable costs) + $4,700,000 (fixed costs) + $2,666,667 (profit before taxes)Total Revenue = $10,666,667The total wager by the guest required to achieve this amount will be:Total Wager by Guests = Total Revenue / Number of Guests Total Wager by Guests = $10,666,667 / 500,000Total Wager by Guests = $21.33 or $21.3
Operating leverage refers to the relationship between the variable costs and fixed costs of the company. The formula to calculate the operating leverage is: Operating leverage = Contribution Margin / Net Operating IncomeThe operating leverage in the current scenario is: Operating leverage = ($10,000,000 - $3,300,000) / ($10,000,000 - $3,300,000 - $4,700,000 - $1,000,000 - $700,000 - $600,000 - $2,000,000 - $400,000)
Operating leverage = $6,700,000 / $220,000 Operating leverage = 30.45 If the number of guests dropped by 50%, the new number of guests will be 500,000/2 = 250,000.
New Operating Income = -$375,000The new operating leverage will be:Operating leverage = ($5,325,000 - $3,300,000) / ($5,325,000 - $3,300,000 - $4,700,000 - $1,000,000 - $700,000 - $600,000 - $2,000,000 - $400,000) Operating leverage = $2,025,000 / -$375,000 Operating leverage = -5.4.
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under public law 86-272, which activity does not establish nexus? solicitation of orders is approved out-of-state, and delivery is made from an in-state location. solicitation of orders is approved out-of-state, and delivery is made from an out-of-state location. solicitation of orders is approved in-state, and delivery is made from an in-state location. solicitation of orders is approved in-state, and delivery is made from an out-of-state location.
Under public law 86-272, which establishes limitations on a state's ability to impose taxes on certain out-of-state businesses, the activity that does not establish nexus is: solicitation of orders is approved out-of-state, and delivery is made from an out-of-state location. (Option B)
Under Public Law 86-272, the only activity that does not establish nexus (i.e., does not create sufficient connection or presence) for an out-of-state business to be subject to a state's income tax is:
b. solicitation of orders is approved out-of-state, and delivery is made from an out-of-state location.
This means that if a business only engages in solicitation activities in a state and all orders are approved and accepted outside of that state, and if the delivery of the goods is made from an out-of-state location, the business would not establish nexus and would be protected from that state's income tax jurisdiction.
In other words, if the business does not have any physical presence beyond solicitation in the state and does not engage in activities such as delivery or maintaining inventory within the state, it would be exempt from the state's income tax.
It's important to note that the specific application and interpretation of Public Law 86-272 can vary, and it's advisable to consult with a tax professional or legal expert for accurate and up-to-date guidance based on the specific circumstances and relevant state laws.
The correct question is:
Under public law 86-272, which activity does not establish nexus? a. solicitation of orders is approved out-of-state, and delivery is made from an in-state location.
b. solicitation of orders is approved out-of-state, and delivery is made from an out-of-state location.
c. solicitation of orders is approved in-state, and delivery is made from an in-state location.
d. solicitation of orders is approved in-state, and delivery is made from an out-of-state location.
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RiverRocks, Inc., is considering a project with the following projected free cash flows:
Year
0
1
2
3
4
Cash Flow
(in millions)
−$50.8
$9.1
$20.4
$20.8
$15.8
The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.9%.
Should it take on this project? Why or why not?
The net present value of the project is - ? million. (Round to three decimal places.)
Yes, RiverRocks, Inc. should undertake the project because the NPV is positive ($17.210 million).
To determine whether RiverRocks, Inc. should undertake the project, we need to calculate the net present value (NPV) of the project. The NPV is the difference between the present value of cash inflows and the present value of cash outflows.
Using the WACC method, we discount each cash flow by the weighted average cost of capital (WACC) to calculate their present values. The WACC for RiverRocks is given as 12.9%.
Year Cash Flow Discount Rate PV of Cash Flow
0 ($50.8) 1.129 ($57.381)
1 $9.1 1.129 $10.293
2 $20.4 1.129 $22.996
3 $20.8 1.129 $23.486
4 $15.8 1.129 $17.816
To calculate the NPV, we sum up the present values of the cash flows:
NPV = ($57.381) + $10.293 + $22.996 + $23.486 + $17.816 = $17.210 million
The calculated NPV of the project is $17.210 million. Since the NPV is positive, it indicates that the project is expected to generate more value than the initial investment.
Therefore, RiverRocks, Inc. should undertake this project. The positive NPV suggests that the project's cash flows are expected to exceed the cost of capital, resulting in increased shareholder wealth.
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The attached image shows the two projects that Lawn & Order Property Maintenance Company is currently considering. Because of past financial difficulties, the company has a high cost of capital of 15%. Determine the highest cost of capital at which both projects would be acceptable. Projects Initial Investment Year Project-A $70,000 Cash Inflows $30,000 $30,000 $30,000 Project-B $90,000 Cash Inflows $40,000 $40,000 $45,000 1 2 3 Select one: O a. 18.00% O b. 13.70% OC. 15.00% O d. 15.89%
A firm’s weighted average cost of capital (WACC) reflects the required return on the company's existing assets as well as its required return on new investments. The company Lawn & Order Property Maintenance is currently considering two projects as shown in the attached image.
To determine the highest cost of capital at which both projects would be acceptable, the company's cost of capital of 15% will be used. Both projects have three-year lives, and all cash inflows and outflows occur at year-end as illustrated in the attached image.
Therefore, to calculate the present value of these cash flows, we can use the following formula:
PV = FV/ (1 + r)n where, PV = present value, FV = future value, N = Number of years, r = discount rate,
Project A : Initial Investment = $70,000, Cash Inflows = $30,000, $30,000, $30,000 Year-end Present Value factor at 15%: 0.870, 0.756, 0.658PV of Cash Inflows = $26,100, $22,680, $19,740. Net Present Value of Project A = $68,520. Therefore, Project A would be acceptable at a cost of capital of 15%
Project B : Initial Investment = $90,000, Cash Inflows = $40,000, $40,000, $45,000, Year-end Present Value factor at 15%: 0.870, 0.756, 0.658
PV of Cash Inflows = $34,800, $30,240, $29,610
Net Present Value of Project B = $94,650
Therefore, Project B would be acceptable at a cost of capital of 15%. So, the correct option is C. 15.00%.
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Ob. Equilibrium price and quantity are, respectively, P-500, Q-500. Oc Equilibrium price and quantity are, respectively. P-1000, Q-300. O d. Equilibrium price and quantity are, respectively. P425, Q-9
Equilibrium price and quantity are two concepts in microeconomics that aid in understanding the market system.
Equilibrium refers to a market state in which the quantity demanded of a product is equal to the quantity supplied of a product. It is the point at which the market is balanced. Equilibrium price is the price at which a good or service is sold when the quantity demanded is equal to the quantity supplied. It is the price that maintains the balance of supply and demand in a market. Equilibrium quantity is the quantity of a good or service that is sold when the quantity demanded is equal to the quantity supplied. It is the quantity that maintains the balance of supply and demand in a market.
Let's consider the three cases:
Ob. Equilibrium price and quantity are, respectively, P-500, Q-500.
Oc. Equilibrium price and quantity are, respectively. P-1000, Q-300.
Od. Equilibrium price and quantity are, respectively. P425, Q-9.
Therefore, the three cases are as follows:
- In the first case (Ob), the market is in equilibrium when the price is $500, and 500 units of the good are sold.
- In the second case (Oc), the market is in equilibrium when the price is $1000, and 300 units of the good are sold.
- In the third case (Od), the market is in equilibrium when the price is $425, and 9 units of the good are sold.
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A running balance is the total in the account from last period.
true or false
The given statement "A running balance is the total in the account from last period" is True. What is a running balance ?A running balance is a real-time record of your account balance as you conduct transactions such as deposits, withdrawals, and payments.
It is a type of balance that keeps a running tally of the balance as transactions are made against an account. The running balance is a bookkeeping strategy that allows a user to monitor and verify the bank balance in their account and keep track of their finances. The asset’s fair value at that time was P6,000,000 and will be depreciated using the straight-line method. The transaction meets the criteria of IFRS 15 to be accounted for as sale.
We need to record the entry to record the transaction on January 1, 2020.In this transaction, the seller, MCU Company has sold the equipment to Painer Company for P9,000,000 and leased the same equipment back from Painer Company under a 10-year finance lease. It is the most common type of balance that banks and financial institutions use to track account activity and manage their customers' accounts, balance that keeps a running tally of the balance as transactions are made against an account. The running balance is a bookkeeping strategy that allows a user to monitor and verify the bank balance in their account and keep track of their finances.
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Assume the price elasticity of demand is unit-elastic. If price changes from $21 to $19, then the quantity demand must change from Ca. 416 to 464 units. b. 180 to 210 units. Cc. 210 to 180 units. Od. 464 to 416 units.
The quantity demand must change from approximately 416 units to 456 units when the price changes from $21 to $19, assuming unit-elastic demand. Option A is correct.
If the price elasticity of demand is unit-elastic, it means that the percentage change in quantity demanded is equal to the percentage change in price. In other words, if the price changes by a certain percentage, the quantity demanded will change by the same percentage.
The price changes from $21 to $19, which is a decrease of approximately 9.52% [(21-19)/21 × 100 = 9.52%].
Now, if we assume that the quantity demanded changes by the same percentage, we need to find the new quantity that is 9.52% higher than 416 units.
416 + (9.52% × 416) ≈ 416 + 39.63 ≈ 455.63 ≈ 456 units (rounded to the nearest whole unit).
Hence, A. is the correct option.
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Which of the following statements is true? If the opportunity cost of current consumption is high, the inflation rate will increase. If the opportunity cost of current consumption is high, people will save more. If the opportunity cost of current consumption is high, the unemployment rate will decrease. If the opportunity cost of current consumption is high, people will save less.
If the opportunity cost of current consumption is high, people will save more is a true statement.
This is because opportunity cost is defined as the cost of an alternative that must be forgone to pursue a certain action. In other words, when the opportunity cost of current consumption is high, it means that there are other options that can be pursued with the money being used for current consumption. This could be saving the money for future use or investing it to earn a return. Hence, people will be motivated to save more or invest the money instead of spending it on current consumption.On the other hand, high opportunity cost does not directly affect the inflation rate or unemployment rate. Inflation rate refers to the rate at which the general level of prices for goods and services is rising and is influenced by factors such as money supply, demand, and government policies. Unemployment rate refers to the percentage of the labor force that is unemployed and is influenced by factors such as the state of the economy, labor market policies, and demographic changes.
If the opportunity cost of current consumption is high, people will tend to save more or invest the money instead of spending it.
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the economic analysis of minimum wage involves both normative and positive analysis. consider the following consequences of a minimum wage:a. the minimum wage law causes unemployment.b. unemployment would be lower without a minimum wage law.c. minimum wage laws benefit some workers and harm others.d. the minimum wage should be more than $7.25 per hour.which of the consequences above are positive statements and which are normative statements?
The minimum wage law causes unemployment is a positive statement, Unemployment would be lower without a minimum wage law and Minimum wage laws benefit some workers and harm others are positive statements. (Option a, b and c)
Positive statements are statements that can be objectively tested or evaluated based on facts and data. Normative statements, on the other hand, involve value judgments and express opinions about what should or ought to be.
Based on the consequences of a minimum wage presented:
a. "The minimum wage law causes unemployment." - This is a positive statement as it can be evaluated and tested by analyzing empirical data and studying the relationship between minimum wage and unemployment rates.
b. "Unemployment would be lower without a minimum wage law." - This is also a positive statement as it makes a factual claim about the potential impact of the minimum wage law on unemployment levels. It can be evaluated and tested using empirical evidence.
c. "Minimum wage laws benefit some workers and harm others." - This is a positive statement as well, as it describes the different effects that minimum wage laws can have on different groups of workers. It can be evaluated and tested by analyzing the distributional impacts of minimum wage policies.
d. "The minimum wage should be more than $7.25 per hour." - This is a normative statement because it expresses an opinion about what the minimum wage should be. It involves a value judgment and reflects a particular perspective or preference.
To summarize:
Positive statements: a, b, c
Normative statement: d
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"Crest is a cavity fighter" is an example of a positioning strategy based on product A. price/quality B. class C. attributes D. users
The given statement "Crest is a cavity fighter" is an example of a positioning strategy based on the attributes of the product. By highlighting this attribute, Crest is able to differentiate itself from other toothpaste brands that may not necessarily focus on the cavity-fighting aspect of their products. The correct option is C.
Positioning is a marketing approach that refers to how customers perceive a brand or product in relation to competitors. It is a concept that involves creating a unique image and identity for a product that differentiates it from other similar products.Positioning strategies can be based on different factors such as price/quality, class, attributes, and users. In this case, the positioning strategy of Crest toothpaste is based on its attribute, which is being a cavity fighter. Crest uses this positioning strategy to target a specific audience who value oral health and seek products that can help prevent cavities.
This audience may be willing to pay a premium price for a product that they believe is effective in cavity prevention.Crest's positioning strategy based on its attribute has been successful over the years, as it has been able to establish itself as a leading toothpaste brand in the market. By focusing on its unique attribute, it has been able to attract a loyal customer base that trusts its product for cavity prevention. The correct option is C.
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An existing machine in a factory has an annual maintenance cost
of P140,000. A new and more efficient machine will require an
investment of P290,000 and is estimated to have a salvage value of
P60,000
When considering purchasing a new and more efficient machine, various factors should be taken into account, including the existing machine's annual maintenance cost, the investment required for the new machine, and its salvage value.
Annual maintenance cost of the existing machine: P140,000Investment required for the new machine: P290,000Salvage value of the new machine: P60,000The annual cost of maintaining the existing machine should be compared to the annual cost of owning and operating the new machine.
The annual cost of owning and operating the new machine is determined by subtracting the new machine's salvage value from the investment required for the new machine and dividing by the new machine's useful life.In this situation, suppose the new machine's useful life is five years.
The annual cost of owning and operating the new machine is: P290,000 - P60,000 = P230,000P230,000 ÷ 5 = P46,000 per year
Therefore, the existing machine's annual maintenance cost of P140,000 is less than the new machine's annual cost of owning and operating it, which is P46,000. As a result, the existing machine is the better option for the factory since it is more cost-effective than purchasing a new machine.
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the covariance between mun corporation's common stock returns and the return on the market portfolio is 0.0415. the standard deviation of the market is 0.5 and the standard deviation of mun is 0.0 what is the beta of mun corporation's common stock?
The beta of Mun Corporation's common stock is 0, indicating no systematic risk and no relationship with market returns.
To calculate the beta of Mun Corporation's common stock, we can use the formula:
[tex]\[\text{Beta} = \frac{\text{Covariance}(r_{\text{mun}}, r_{\text{market}})}{\text{Variance}(r_{\text{market}})}\][/tex]
Given:
Covariance between Mun Corporation's common stock returns and the return on the market portfolio = [tex]0.0415[/tex]
Standard deviation of the market [tex](r_{\text{market}}) = 0.5[/tex]
Standard deviation of Mun Corporation's common stock returns [tex](r_{\text{mun}}) = 0.0[/tex]
Since the standard deviation of Mun Corporation's common stock returns is 0, it means there is no variability or risk associated with the stock. Therefore, the beta of Mun Corporation's common stock would be 0, indicating that the stock's returns do not move in relation to the market returns and do not exhibit systematic risk.
In conclusion, the beta of Mun Corporation's common stock is 0, indicating that the stock's returns do not vary with the returns of the market portfolio and it is not exposed to systematic risk.
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1. When you were 10 years old, your parents opened an investment
account in your name and deposited $450 into the account. The
account has earned an average annual rate of return of 4.8 percent.
Today
The value of the investment account today would be approximately $661.20.
To calculate the value of the investment account today, we can use the compound interest formula. Let's denote the initial deposit as $P, the annual interest rate as r, the number of years as t, and the current value as V.
The formula for calculating the current value with compound interest is:
[tex]\[ V = P \times (1 + r)^t \][/tex]
Given that your parents deposited $450 into the account when you were 10 years old and the account has earned an average annual rate of return of 4.8 percent, we can calculate the current value using the formula:
[tex]\[ V = 450 \times (1 + 0.048)^{t} \][/tex]
Now, let's assume a specific value for t. For example, if you are currently 20 years old, then t would be 10 (current age minus the age when the account was opened).
Substituting the values into the formula:
[tex]\[ V = 450 \times (1 + 0.048)^{10} \][/tex]
Calculating the value using a calculator or software, we find:
[tex]\[ V \approx 450 \times (1.048)^{10} \approx 661.20 \][/tex]
Therefore, the value of the investment account today would be approximately $661.20.
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What are the characteristics of the Global Competition ? How it
affects the world as a whole?
Global competition refers to the competition that takes place among businesses from different nations and is the result of globalization. It refers to the competition between countries, businesses, and individuals. The characteristics of global competition include the following: It encourages the development of new technologies. It promotes innovation. It enhances the quality of products. It encourages investment in research and development. It provides consumers with a wide range of products and services. It improves the efficiency of businesses. It fosters economic growth. Global competition has a significant impact on the world as a whole.
Some of the ways that global competition affects the world include the following: It encourages countries to specialize in their areas of comparative advantage. It fosters economic growth and development in developing countries. It can lead to the outsourcing of jobs. It can lead to the exploitation of workers in developing countries. It can lead to environmental degradation. It can lead to the depletion of natural resources. It can lead to the loss of cultural diversity.
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Which of these journal entries represent paying cash to reduce a liability? (check all that apply)
a)Dr. Cash 1000
Cr. Notes Payable 1000
b)Dr. Land 100
Cr. Cash 100
c)Dr. Income Taxes Payable 500
Cr. Cash 500
d)Dr. Cash 300
Cr. Accounts Payable 300
e)Dr. Retained Earnings 500
Cr. Cash 500
The journal entries that represent paying cash to reduce a liability are as follows: Dr. Cash 1000 Cr. Notes Payable 1000 Dr. Income Taxes Payable 500 Cr. Cash 500Dr. Cash 300 Cr. Accounts Payable 300. The correct options are a, c, and d.
When liability is reduced by paying cash, it is typically recorded through a journal entry that reflects the decrease in the liability account and the corresponding decrease in the cash account. This transaction is essential for accurately representing the financial position of a company.
For example, in the journal entry "Dr. Cash 1000 Cr. Notes Payable 1000," the liability account "Notes Payable" is reduced by 1000 units, indicating that the company has made a payment to settle a debt. Simultaneously, the cash account is debited by 1000 units, reflecting the outflow of cash from the company.
Similarly, in the entries "Dr. Income Taxes Payable 500 Cr. Cash 500" and "Dr. Cash 300 Cr. Accounts Payable 300," the respective liabilities are decreased while the cash account is reduced by the same amount.
These journal entries accurately represent the transaction of paying cash to reduce liabilities, ensuring that the financial statements provide an accurate picture of the company's financial health and obligations. Such record-keeping is vital for financial reporting, decision-making, and maintaining transparency in a company's financial operations.
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Ann obtains a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $4,500,000 at 4.38%, What will be Ann's mortgage balance after 20 years of payments (le after 240 months)?
Ann's mortgage balance after 20 years of payments will be approximately $1,965,695.54.
To calculate Ann's mortgage balance after 20 years of payments, we need to use the amortization formula for a fully amortizing mortgage. The formula is as follows:
M = P * [[tex](r(1 + r)^n) / ((1 + r)^n[/tex] - 1)]
Where:
M = Monthly mortgage payment
P = Principal amount (loan amount)
r = Monthly interest rate
n = Total number of payments
Given information:
P = $4,500,000 (loan amount)
r = 4.38% per annum, or 4.38%/12 = 0.365% monthly interest rate
n = 20 years * 12 months/year = 240 months
To calculate the monthly mortgage payment, we can rearrange the formula as follows:
M = P * [([tex]r(1 + r)^n) / ((1 + r)^n[/tex] - 1)]
M = $4,500,000 * [(0.00365(1 + 0.00365)^240) / ((1 + 0.00365)^240 - 1)]
Calculating this equation will give us the monthly mortgage payment. However, the question asks for the mortgage balance after 20 years of payments. To calculate this, we need to determine the remaining balance at month 240.
We can use an amortization schedule or mortgage calculator to find the remaining balance. Using the given information, the remaining mortgage balance after 20 years of payments is: $1,965,695.54.
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Clemens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were $7500 and $25.500 respectively. During the year, actual overhead was $107,900 and actual direct labor cost was $115.800. The entry to close the over- or undersupplied at year-end, assuming an immaterial amount, would include (Round predetermined overhead rate to nearest whole percentage) a. A credit to Finished Goods Inventory for $952. b. A credit to Factory Overhead for $952. c. A debit to Cost of Goods Sold for $952. d. A credit to Cost of Goods Sold for $952. e. A debit to Work in Process Inventory for $952.
The entry to close the over- or undersupplied at year-end, assuming an immaterial amount, would include a debit to the cost of goods sold for $952. Therefore, option C is correct.
Predetermined overhead rate = Estimated overhead / Direct labor cost
Predetermined overhead rate = $7,500 / $25,500
Predetermined overhead rate ≈ 0.2941 (rounded to four decimal places)
Next, let's calculate the difference between actual and estimated overhead costs:
Overhead variance = Actual overhead - Applied overhead
Overhead variance = $107,900 - ($25,500 * 0.2941)
Overhead variance = $107,900 - $7,494.95
Overhead variance = $100,405.05
Since the overhead variance is an over-supplied amount, it is closed by debiting the Cost of Goods Sold account. This entry reduces the cost of goods sold, resulting in a lower expense and adjusting for the over-supplied overhead amount.
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Purchases Transactions Rolfes Company purchased merchandise on account from a supplier for $9,200, terms 1/10, n/30. Rolfes returned $1,400 of the merchandise and received full credit.
a. If Rolfes Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar. $_____
b. What account is debited by Rolfes Company to record the return? ______
If Rolfes Company pays the invoice within the discount period, the amount of cash required for the payment is $9,108
The account debited by Rolfes Company to record the return of the merchandise is the "Accounts Payable" account
The terms "1/10, n/30" indicate that a 1% discount is available if the invoice is paid within 10 days. The "n/30" means the total invoice amount is due within 30 days without the discount.
To calculate the discount, we multiply the invoice amount by the discount rate:
Discount = Invoice amount x Discount rate
Discount = $9,200 x 1% = $92
The amount of cash required for payment within the discount period is the invoice amount minus the discount:
Cash required = Invoice amount - Discount
Cash required = $9,200 - $92 = $9,108
The account debited by Rolfes Company to record the return of the merchandise is typically the "Accounts Payable" account. This is because the return reduces the amount owed to the supplier, effectively decreasing the accounts payable balance.
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