In Farmland, only Carlos and Madeline can raise free-range chickens on their farms. Assume that Carlos and Madeline can collect and sell a large quantity of eggs at no cost and that free-range eggs produced outside Farmland cannot be transported into the town for sale. The following questions will walk you through the process of computing the equilibrium result using the Stackelberg model. Suppose that, in this market, Carlos decides how many eggs per day he is going to produce, and then Madeline makes her decision after observing Carlos's quantity choice. The market demand for eggs is given by Q = 16 - P. Use the purple line (diamond symbol) on the following graph to illustrate Madeline's best-response function as determined by the quantity of eggs Carlos decides to produce. Since Carlos knows how Madeline will react depending on the quantity of eggs he sells, he can internalize this effect by deriving the net demand for his eggs. In the first blank column of the following table, enter the quantity of eggs Madeline will sell, given each of the quantities listed for Carlos's production. Then add these quantities to solve for the total production of eggs and enter the sum in the Total Production column. Finally, determine the market price that will emerge, given the total production, and enter that price in the final column.
The following graph shows Carlos's marginal cost (MC) for producing eggs. Use the green point (triangle symbol) to plot the net demand (ND) for Carlos's eggs based on the prices listed in the preceding table. Then, use the grey line (star symbol) to graph Carlos's marginal revenue (MR) curve. Finally, use the black point (plus symbol) to indicate Carlos's profit-maximizing level of output and the resulting market price for a gross of eggs. Note: Dashed drop lines will automatically extend to both axes. True or False: If Carlos cannot commit to the output level you determined, then Carlos and Madeline will both end up producing around 5 gross of eggs. O True O False

Answers

Answer 1

Only a tiny fraction—a startling 99.9%—of hens in the United States are reared on farms with free range, which is astonishing. Surprisingly, though, there is no official definition of what "free-range" means.

Although raising free-range chickens can be difficult, it can be well worth it in the long run for a more resilient, healthy, and productive flock. But why are free-range chickens so coveted, and what unique requirements do they have for care ?Definition of "Free Range" When chickens or other animals are "free ranged," they are given more freedom to wander about and inhabit their habitat. They also have unrestricted access to outside spaces. These animals have a lot larger, more interesting room to explore than they would in a tiny coop, barn, or pen. However, because there are few laws governing what can be formally branded as free range, there is a wide variety of interpretation for free range definitions.

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Related Questions

Epsilon currently pays $76 per unit to buy a part for a product it sells. Epsilon has excess capacity, and estimates that making the part would incur variable costs of $8 for direct materials and $40 for direct labor. Epsilon's normal predetermined overhead rate is 150% of direct labor cost, but management computes an incremental overhead rate of $16.00 per unit to make this part. Epsilon should choose to:___.
A. Buy since the relevant cost to make it is $82 per unit.
B. Make since the relevant cost to make it is $61.20 per unit.
C. Buy since the relevant cost to make it is more than $74.00 per unit.

Answers

Answer:

If the company males the unit, it will save $12 per unit.

Explanation:

Giving the following information:

Buying price= $76

Make in-house:

Direct material= $8

Direct labor= $40

Incremental Overhead= $16

The total cost of production is:

Total unitary cost of production= 8 + 40 + 16

Total unitary cost of production= $64

If the company males the unit, it will save $12 per unit.

Financial information is presented below: Operating expenses $ 63000 Sales returns and allowances 2000 Sales discounts 5000 Sales revenue 156000 Cost of goods sold 104000 The amount of net sales on the income statement would be

Answers

Answer:

$149,000

Explanation:

The computation of the amount of net sales is shown below:

=  Sales revenue - sales return & allowance - sales discount

= $156,000 - $2,000 - $5,000

= $149,000

We simply deduct the two items from the sales revenue so that the net sales revenue could be come and the same would be reported on the income statement

Sanders Corporation has the following shares outstanding: 8,000 shares of $50 par value, six percent preferred stock and 50,000 shares of $1 par value common stock. The company has $328,000 of retained earnings. At year-end, the company declares its regular $3 per share cash dividend on the preferred stock and a $2.2 per share cash dividend on the common stock. Three weeks later, the company pays the dividends.
a. Prepare the journal entry for the declaration of the cash dividends.
b. Prepare the journal entry for the payment of the cash dividends.

Answers

Answer:

A. Dr Cash $134,000

Cr Dividend payable-preferred stock $24,000

Cr Dividend payable-common stock $110,000

b. Dr Dividend payable- preferred stock $24,000

Dr Dividend payable- common stock $110,000

Cr Cash $134,000

Explanation:

a. Preparation of the journal entry for the declaration of the cash dividends.

Dr Cash $134,000

($24,000+$110,000)

Cr Dividend payable-preferred stock $24,000

($3 x 8,000)

Cr Dividend payable-common stock $110,000

($2.20 x 50,000)

( To record declaration of $3 dividend on preferred stock and $2.20 on common stock)

b. Preparation or the journal entry for the payment of the cash dividends.

Dr Dividend payable- preferred stock $24,000

($3 x 8,000)

Dr Dividend payable- common stock $110,000

($2.20 x 50,000)

Cr Cash $134,000

($24,000+$110,000)

(To record payment of dividends on preferred and common stock)

Read the scenario and answer the following questions:
Maria works for a toy manufacturer and is responding to the claim of a disgruntled customer. The customer is upset because the Interactive toy he purchased for his child stopped working the day of the purchase. The customer tried replacing the batteries, but that would not fix the problem. Maria knows that there have been issues with this product, and she decides to write an adjustment message. Which of the following sentences would be appropriate for Maria to include in her adjustment message?
a. I wasn't personally responsible for the defect, but I'll see what I can do.
b. Perhaps your child did something to the toy to cause it to stop working.
c. You can use the enclosed voucher to purchase a new product of your choice.
d. I promise this will never happen again.

Answers

Answer: You can use the enclosed voucher to purchase a new product of your choice

Explanation:

An adjustment message simply refers to the response that is written with respect to a claim letter which was made against a business or organization.

The appropriate sentence that Maria should include in her adjustment message will be that "You can use the enclosed voucher to purchase a new product of your choice".

This will help calm the customer down and the customer will be happy to know that she can make another purchase with the voucher.

Other options such as "I wasn't personally responsible for the defect, but I'll see what I can do", and "Perhaps your child did something to the toy to cause it to stop working" will make the customer angrier.

Therefore, the correct option is C.

Joint products A and B emerge from common processing that costs $116,000 and yields 4,000 units of Product A and 2,800 units of Product B. Product A can be sold for $280 per unit. Product B can be sold for $100 per unit. How much of the joint cost will be assigned to Product A if joint costs are allocated on the basis of relative sales values

Answers

Answer:

Apportioned joint cost to A=$92,800

Explanation:

Joint costs are the costs incurred up until the split-off where two or more products result from the same production process. These  common costs need to be apportioned among the joint products using any of the following basis:

physical unitsRelative sales value basis.

The relative value basis apportions joint costs using the proportion of product individual sales value to the the total sales value.

Total sales value = (280×4,000) + (100×2,800) =1400000

Apportioned joint cost to A =(1,120,000/1,400,000)× 116,000=92800

Apportioned joint cost to A=$92,800

Your company manufactures riding lawn mowers.One of your customers,Marie,writes a claim,demanding a compensation for her faulty mower.On examining the faulty product,a service executive in your company discovers that someone dismantled the mower and attempted to fix it.Which of the following statements is the best way to phrase your refusal of Marie's claim for adjustment?
A) Our contract,which you signed,clearly absolves us of any liability in this case.
B) If you read our contract,you would know that we are not liable to pay compensation in such cases.
C) Paragraph 2 of our contract clearly shows that your claim is without foundation.
D) As stated in our contract,we are liable to pay compensation only when our personnel repair the equipment.
E) Your attempt to repair the lawn mower on your own has rendered the product warranty void.

Answers

Answer: D) As stated in our contract,we are liable to pay compensation only when our personnel repair the equipment

Explanation:

Based on the information given in the question, the best way to phrase the refusal of Marie's claim for adjustment is that "As stated in our contract, we are liable to pay compensation only when our personnel repair the equipment".

Since a service executive in the company discovers that the mower was dismantled by someone, then Marie's claim for adjustment can be refused since it wasn't dismantled by someone from the company.

Lester sold a warehouse with an original cost of $150,000 for $230,000. The warehouse had accumulated depreciation of $40,000. The recognized gain on the sale was $ . The amount of the gain that is unrecaptured Section 1250 gain is $ and will be taxed at a maximum rate of percent. The remaining $ will be taxed at a maximum rate of 20%.

Answers

Answer:

Recognized Gain:

= Selling price - Net book value

= 230,000 - (150,000 - 40,000)

= $120,000

The amount of the gain that is unrecaptured Section 1250 gain:

= Selling Price - Cost of asset - Accumulated depreciation

= 230,000 - 150,000 - 40,000

= $40,000

Tax will be maximum rate of 25% as per IRS rules.

The cash to be charged at maximum of 20% is:

= Gain - Section 1250 gain

= 120,000 - 40,000

= $80,000

What do we call an item that is essential for survival in economics?


A Needs

B Wants


C scarcity
D opportunity cost​

Answers

Answer:

A) Needs

Explanation:

In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend was declared on the stock and paid to Dora's granddaughter. What amount must Dora's granddaughter include in her gross income for the current year

Answers

Answer:

$500

Explanation:

Based on the information given we were told that the DIVIDEND of the amount of $500 which was declared on the stock was paid to Dora's granddaughter Several months later, which means that the amount that Dora's granddaughter must include in her GROSS INCOME for the current year will be the dividend amount of $500 that was paid to Dora's granddaughter.

Therefore the amount that Dora's granddaughter must include in her gross income for the current year is $500

Elizabeth (25 years old) studied music education in college and graduated a year ago. She currently works as a music teacher at a year-round private middle school. Her gross pay is $28800 a year, or $2400 a month. After taxes, health insurance, and other paycheck deductions, her net pay is $24600 a year. Based on recommended guidelines, how much money should Elizabeth be saving each month

Answers

Based on her gross pay, the amount that Elizabeth should be saving each month is $288.

Recommended savings rate

It is recommended that one saves at least 12% of their gross salary each month to allow them cater for emergencies.

Elizabeth savings per month

Her savings would therefore be:

= Gross monthly pay x 12%

= 2,400 x 12%

= $288

In conclusion, she should save $288.

Find out more on savings at https://brainly.com/question/10473550.

Mount Snow Inc. operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 15% return on the company's $115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Mount Snow projects fixed costs to be $43,500,000 for the ski season. The resort serves 900,000 skiers and snowboarders each season. Variable costs are $10 per guest. The resort had such a favorable reputation among skiers and snowboarders that it had some control over the lift ticket prices. Assume that Mount Snow's reputation has diminished and other resorts in the vicinity are charging only $66 per lift ticket. Mount Snow has become a price-taker and won't be able to charge more than its competitors. At the market price, Mount Snow's managers believe they will still serve 900,000 skiers and snowboarders each season.

Requried:
a. Would Mount Snow emphasize target costing or cost-plus pricing. Why?
b. If other resorts in the area charge $66 per day, what price should Mount Snow charge?

Answers

Answer:

Mount Snow Inc.

a. Mount Snow would emphasize cost-plus pricing and not target costing.  The target costing considered the investors expected returns on investment.  Based on the target returns, customers were then charged any fee to meet the target profit, including all other costs.  Now that Mount Snow is a price-taker, it cannot meet the target returns.  It can only work with the cost-plus pricing strategy in order to rein in its costs.

b. As a price-taker, Mount Snow cannot charge more than $66.  It should charge $66.

Explanation:

a) Data and Calculations:

Investors expected return on investment = 15%

Cost of investment = $115,000,000

Ski Season's Fixed costs = $43,500,000

No of skiers and snowboarders served = 900,000

Variable costs per guest = $10

Charges by other resorts in the vicinity = $66 per lift ticket

Total expected revenue              $59,400,000 ($66 * 900,000)

Total variable costs =  $9,000,000

Fixed costs =               43,500,000

Total costs =                                 $52,500,000

Profit =                                            $6,900,000

Target profit =                               $17,250,000 ($115,000,000 * 15%)

You are considering a project in Honduras that would generate 1.5 million dollars in cash flows per year going forever. The cost of the project is 8 million dollars. The discount rate for the project is 12%. You believe that there is some probability of expropriation prior to the 4th year (after the 3rd cash flow). Which of the following fully describes when this is a good project?
a. This is a good project if the probability of expropriation is larger than 0.33
b. This is a good project if the probability of expropriation is smaller than 0.33
c. This is a good project if the probability of expropriation is smaller than 0.5
d. This is a good project if the probability of expropriation is smaller than 0.66 7.

Answers

Answer:

c. This is a good project if the probability of expropriation is smaller than 0.5

Explanation:

initial outlay = $8,000,000

if no expropriation, NPV = -$8,000,000 + $1,500,000/0.12 = $4,500,000

if the risk of expropriation is 0.33:

NPV = $925,211

if the risk of expropriation is 0.5:

NPV = -$425,265

the breakeven risk = 44.6%

Mary Magnolia wants to open a flower shop, the Petal Pusher, in a new mall. She has her choice of three different floor sizes, 200 square feet, 500 square feet, or 1,000 square feet. The monthly rent will be $1 a square foot. Mary estimates that if she has F square feet of floor space and sells y bouquets a month, her variable costs will be cv(y) = y^ 3/ 4F per month.

Required:
a. If she has 200 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost?
b. If she has 500 square feet, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost? .
c. If she has 1,000 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost?

Answers

Answer:

a-1. We have:

MC = 3y^2 / 800 <=== Marginal cost (MC) function

AC = (200 / y) + (y^2 / 800)  <=== Average cost (AC) function

a-2. The amount of output is 43.09 bouquets.

a-3. Average cost at this level is $6.96 per unit.

b-1. We have:

MC = 3y^2 / 2,000  <=== Marginal cost (MC) function

AC = (500 / y) + (y^2 / 2,000) <=== Average cost (AC) function

b-2. The amount of output is 79.37 bouquets.

b-3. Average cost at this level is $9.45 per unit.

c-1. We have:

MC = 3y^2 / 4,000 <=== Marginal cost (MC) function

AC = (1,000 / y) + (y^2 / 4,000) <=== Average cost (AC) function

c-2. The amount of output is 125.99 bouquets.

c-3. Average cost at this level is $11.91 per unit.

Explanation:

Given:

cv(y) = y^3/ 4F  ………………… (1)

cf = fixed cost = F

Therefore, total cost (C) per month is as follows:

C(y) = cf + cv(y) = y^ 3/ 4F

C(y) = F + y^3 / 4F ……………………… (2)

a-1. If she has 200 square feet of floor space, write down her marginal cost function and her average cost function.

This implies that:

F = 200

Marginal cost (MC) function is obtained by taking the first derivative of equation (1) and substituting F = 200 as follows:

MC = cv’(y)

MC = 3y^2 / (4 * 200)

MC = 3y^2 / 800 ………………. (3) <= Marginal cost (MC) function

Average cost (AC) function can be obtained by dividing equation (2) by y, substituting F = 200 and solve as follows:

AC = C’(y) = (200 / y) + (y^3 / 4F) / y

AC = (200 / y) + (y^3 / (4 * 200)) / y

AC = (200 / y) + (y^2 / 800) …………………. (4) <= Average cost (AC) function

a-2. At what amount of output is average cost minimized?

Since average cost is minimized when MC = AC, we therefore equate equations (3) and (4) and solve for y as follows:

3y^2 / 800 = (200 / y) + (y^2 / 800)

0.00375y^2 = (200 / y) + 0.00125y^2

0.00375y^2 - 0.00125y^2 = 200 / y

0.0025y^2 = 200 / y

(0.0025y^2)y = 200

0.0025y^3 = 200

y^3 = 200 / 0.0025

y^3 = 80,000

y = 80,000^(1/3)

y = 43.09

Therefore, the amount of output at which is average cost minimized is 43.09 bouquets.

a-3. At this level of output, how much is average cost?

Substituting y = 43.09 into equation (4), we have:

AC = (200 / 43.09) + (43.09^2 / 800)

AC = 6.96

Therefore, average cost at this level is $6.96 per unit.

b-1. If she has 500 square feet, write down her marginal cost function and her average cost function.

This implies that:

F = 500

Marginal cost (MC) function is obtained by taking the first derivative of equation (1) and substituting F = 500 as follows:

MC = cv’(y)

MC = 3y^2 / (4 * 500)

MC = 3y^2 / 2,000 ………………. (5) <= Marginal cost (MC) function

Average cost (AC) function can be obtained by dividing equation (2) by y, substituting F = 500 and solve as follows:

AC = C’(y) = (500 / y) + (y^3 / (4 * 500)) / y

AC = (500 / y) + (y^3 / (4 * 500)) / y

AC = (500 / y) + (y^2 / 2,000) …………………. (6) <= Average cost (AC) function

b-2. At what amount of output is average cost minimized?

Since average cost is minimized when MC = AC, we therefore equate equations (5) and (6) and solve for y as follows:

3y^2 / 2,000 = (500 / y) + (y^2 / 2,000)

0.0015y^2 = (500 / y) + 0.0005y^2

0.0015y^2 - 0.0005y^2 = 500 / y

0.001y^2 = 500y

0.001y^2 * y = 500

0.001y^3 = 500

y^3 = 500 / 0.001

y^3 = 500,000

y = 500,000^(1/3)

y = 79.37

Therefore, the amount of output at which is average cost minimized is 79.37 bouquets.

b-3. At this level of output, how much is average cost?

Substituting y = 79.37 into equation (6), we have:

AC = (500 / 79.37) + (79.37^2 / 2,000)

AC = 9.45

Therefore, average cost at this level is $9.45 per unit.

c-1. If she has 1,000 square feet, write down her marginal cost function and her average cost function.

This implies that:

F = 1,000

Marginal cost (MC) function is obtained by taking the first derivative of equation (1) and substituting F = 1,000 as follows:

MC = cv’(y)

MC = 3y^2 / (4 * 1,000)

MC = 3y^2 / 4,000 ………………. (7) <= Marginal cost (MC) function

Average cost (AC) function can be obtained by dividing equation (2) by y, substituting F = 1,000 and solve as follows:

AC = C’(y) = (1,000 / y) + (y^3 / (4 * 1,000)) / y

AC = (1,000 / y) + (y^3 / (4,000)) / y

AC = (1,000 / y) + (y^2 / 4,000) …………………. (8) <= Average cost (AC) function

c-2. At what amount of output is average cost minimized?

Since average cost is minimized when MC = AC, we therefore equate equations (7) and (8) and solve for y as follows:

3y^2 / 4,000 = (1,000 / y) + (y^2 / 4,000)

0.00075y^2 = (1,000 / y) + 0.00025y^2

0.00075y^2 - 0.00025y^2 = 1,000 / y

0.0005y^2 = 1,000 / y

0.0005y^2 * y = 1,000

y^3 = 1,000 / 0.0005

y^3 = 2,000,000

y = 2,000,000^(1/3)

y = 125.99

Therefore, the amount of output at which is average cost minimized is 125.99 bouquets.

c-3. At this level of output, how much is average cost?

Substituting y = 125.99 into equation (8), we have:

AC = (1,000 / 125.99) + (125.99^2 / 4,000)

AC = 11.91

Therefore, average cost at this level is $11.91 per unit.

Type the correct answer in the box. Spell all words correctly.
Why is the cost of goods sold account part of a trading business only?
The cost of goods sold account is part of a trading business, but not seen in the income statement of a service business. This is because in a
service business, no
goods are sold to the consumers.

Answers

Answer:

Indeed, the cost of goods sold account is part of a trading business, but not seen in the income statement of a service business, because in a service business, no material goods are sold to the consumers. In this way, contrary to what happens in the sale of goods, in the sale of services the seller does not offer a material with a previous production cost to the buyer, but rather offers the performance of a certain task, with which there is no material component in the offer, but rather an execution of an act and the knowledge of how to carry out said execution by the person providing the service.

Instructions: Please make sure that you show all your work when solving the problems. Feel free to make any assumptions whenever you feel necessary. Just make sure that you clearly state your assumptions.
Analysts expect MC, Co. to maintain a dividend payout ratio of 35% and enjoy an expected growth rate of 12% per year for the next 5 years. After the fifth year, all earnings will be paid out as dividends. The required rate of return on MC, Co equity is 8%.
a. Given that the last dividend paid was $0.5 and the current market price of the stock is $15, what growth rate does the market expect for MC, Co?
b. At what price would the analysts value the stock under their own expectations?
c. Suppose 5 years have gone by and the company has to make a decision on how to move forward. It can either pay out all earnings as dividends without considering any growth opportunities, or choose a growth strategy where the company will expand into new lines of business in global markets. If the management chooses this strategy, the payout ratio will be reduced down to 20% from 35%, and the company will be able to maintain a growth rate of 7% forever. Which strategy should the management choose to maximize shareholder value?

Answers

Answer:

Explanation:

From the given information:

The current price = [tex]\dfrac{Dividend(D_o) \times (1+ Growth \ rate) }{\text{Cost of capital -Growth rate}}[/tex]

[tex]15 = \dfrac{0.50 \times (1+ Growth rate)}{8\%-Growth rate}[/tex]

[tex]15 \times (8 -Growth \ rate) = 0.50 +(0.50 \times growth \ rate)[/tex]

[tex]1.20 - (15 \times Growth \ rate) = 0.50 + (0.50 \times growth \ rate)[/tex]

[tex]0.70 = (15 \times growth \ rate) \\ \\ Growth \ rate = \dfrac{0.70}{15.50} \\ \\ Growth \ rate = 0.04516 \\ \\ Growth \ rate \simeq 4.52\% \\ \\[/tex]

2. The value of the stock  

Calculate the earnings at the end of  5 years:

[tex]Earnings (E_o) \times Dividend \ payout \ ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%} \\ \\ = \$1.42857[/tex]

[tex]Earnings (E_5) year \ 5 = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \ 5 = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5 = \$2.51763[/tex]

Terminal value year 5 = [tex]\dfrac{Earnings (E_5) \times (1+ Growth \ rate)}{Interest \ rate - Growth \ rate}[/tex]

[tex]=\dfrac{\$2.51763\times (1+0.04516)}{8\%-0.04516}[/tex]

=$75.526

Discount all potential future cash flows as follows to determine the stock's value:

[tex]\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 +Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no\ of\ years} }[/tex]

[tex]+ \dfrac{Terminal\ Value }{(1+interest \ rate )^{no \ of \ years}} \Bigg)[/tex]

[tex]\implies \bigg(\dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}} + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$75.526}{(1+8\% )^{5}} \bigg )[/tex]

[tex]\implies \bigg(\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$75.526}{1.4693} \bigg)[/tex]

=$ 54.1945

As a result, the analysts value the stock at $54.20, which is below their own estimates.

3. The value of the stock  

Calculate the earnings at the end of  5 years:

[tex]Earnings (E_o) \times Dividend payout ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%}\\ \\ = \$1.42857[/tex]

[tex]Earnings (E_5) year \ 5 = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \ 5 = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5 = \$2.51763 \\ \\[/tex]

Terminal value year 5 =[tex]\dfrac{Earnings (E_5) \times (1+ Growth \ rate)\times dividend \ payout \ ratio}{Interest \ rate - Growth \ rate}[/tex]

[tex]=\dfrac{\$2.51763\times (1+ 7 \%) \times 20\%}{8\%-7\%}[/tex]

=$53.8773

Discount all potential cash flows as follows to determine the stock's value:

[tex]\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 + Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no \ of\ years} }+ \dfrac{Terminal \ Value }{(1+interest \ rate )^{no \ of \ years }} \bigg)[/tex]

[tex]\implies \bigg( \dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}} + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$53.8773}{(1+8\% )^{5}} \bigg)[/tex]

[tex]\implies \bigg (\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$53.8773}{1.4693} \bigg)[/tex]

=$39.460

As a result, the price is $39.460, and the other strategy would raise the value of the shareholders. Not this one, since paying a 100% dividend would result in a price of $54.20, which is higher than the current price.

Notice that the third question depicts the situation after 5 years, but the final decision will be the same since we are discounting in current terms. If compounding is used, the future value over 5 years is just the same as the first choice, which is the better option.

The presumption in the second portion is that after 5 years, the steady growth rate would be the same as measured in the first part (1).

Calistoga Produce estimates bad debt expense at 0.50% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $476,000 and $1,650 respectively, at December 31, 2020. During 2021, Calistoga's credit sales and collections were $315,000 and $307,000, respectively, and $1,880 in accounts receivable were written off. Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is:

Answers

Answer:

$1,345

Explanation:

Calculation to determine what Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is

First step is to calculate the Expense amount

Expense=Credit sales $315,000* .5%

Expense=$1,575

Second step is to calculate the Allowance

Allowance 12/31/2020 $1,650

Less Write-offs(1,880)

Allowance ($ 230)debit

Now let calculate the final balance in its allowance for uncollectible accounts

December 31, 2021 allowance for uncollectible accounts= ($230) + $1,575

December 31, 2021 allowance for uncollectible accounts=$1,345

Therefore Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is $1,345

A newspaper report states the following: "On March 2, Bastiaan Vanacker was arrested for indecent exposure"; However, what really happened was that someone called Sebastian Van Akker was arrested on March first for indecent exposure. The journalist made a mistake when reading the police report. Both Vanacker and Van Akker sue the newspaper for libel. Given libel jurisprudence, which of the following is most likely to happen? They both are private figures.
a. Bastiaan Vanacker wins a libel suit , Sebastian Van Akker loses.
b. Sebastian Van Akker wins a libel suit, Bastiaan Vanacker loses a libel suit.
c. They both win a libel suit.
d. They both lose a libel suit

Answers

Answer:

a. Bastiaan Vanacker wins a libel suit , Sebastian Van Akker loses.

Explanation:

Libel is where a defamatory statement has been published and that statement is false, this will result in the person able to claim libel charges.

This means that if information about someone is publicised (specially a private figure) for any criminal act and which could lead to damage that person's reputation seriously without any proper evidence or even false evidence then this would become ground for a libel case.

Such as in this case where a journalist reported that Bastiaan Vanacker was arrested for indecent exposure even though this was not really the case. As confirmed through the police report which the journalist had misread. This libel suit filed by Bastiaan Vanacker would be won, as his reputation has been damaged to the falsely alleged report published in the newspaper.

However, in the case of Sebastian Van Akker, who had actually committed the crime and no information was mentioned about him in the newspaper, will lose the libel suit filed. This is due to the fact that he was not defamed for any act which he himself had not conducted.

Cal Cookie Company (CCC) has 100 million shares of $1 par common stock authorized. The transactions below caused changes in CCC's outstanding shares.
January 4, 2016 Repurchased and retired 1 million shares at $8 per share
June 25, 2016 Repurchased and retired 2 million shares at $2 per share
Prior to the transactions, CCC's shareholder's equity included the following:
Common stock, 80 million shares at $1 par $80,000,000
Paid-in-Capital - excess of par160,000,000
Retained Earnings 120,000,000
Required:
Record entries for the above transactions. Please show work

Answers

Answer and Explanation:

The journal entries are shown below:

On January 4, 2016

Common capital (1 million ×  $1 per share) $1,000,000

Paid in capital excess of par (1 million × $160,000,000 ÷ $80,000,000) $2,000,000

Retained earnings (difference) $5,000,000

          To Cash (1 million × $8) $8,000,000

(Being repurchase & retired shares are recorded)

On June 25,2016

Common capital (2 million × $1 per share) $2,000,000

Paid in capital excess of par ( 2 million × $2) $4,000,000

         To Cash (2 million × $2) $4,000,000

         To Retained earnings (difference) $2,000,000

(Being repurchase & retired shares are recorded)

Sunland Company just began business and made the following four inventory purchases in June: June 1 153 units $1071 June 10 204 units 1632 June 15 204 units 1836 June 28 153 units 1530 $6069 A physical count of merchandise inventory on June 30 reveals that there are 204 units on hand. Using the average cost method, the amount allocated to the ending inventory on June 30 is

Answers

Answer:

the ending inventory is $1,734

Explanation:

The computation of the amount allocated to the ending inventory is shown below:

But before that the average per unit is

= Total amount ÷ total units

= $6,069 ÷ (153 + 204  + 204 + 153)

= $8.5

Since the ending inventory units is 204 units

So, the ending inventory is

= $8.5 ×204 units

= $1,734

hence, the ending inventory is $1,734

The present value of lease payments should be used by the lessee in determining the amount of a lease liability under a lease classified by the lessee as a(n) Finance Lease Operating Lease Finance Lease Yes Operating Lease Yes Finance Lease Yes Operating Lease No Finance Lease No Operating Lease No Finance Lease No Operating Lease Yes

Answers

Answer:

Finance Lease Yes Operating Lease Yes

Explanation:

The lease payments present value should be used for measuring the liability under a capital lease. In the case of the operating lease, the liability when occured at the time when the rent expense should be recorded but not be paid. In addition to this, it is recorded at the actual value of cash that should be paid not the present value

Therefore the first option is correct

Warranty Costs Milford Company sells a motor that carries a three-month unconditional warranty against product failure. Based on a reliable statistical analysis, Milford knows that between the sale and the end of the product warranty period, four percent of the units sold will require repair at an average cost of $60 per unit. The following data reflect Milford's recent experience:
October November December Dec. 31 Total 23,000 22,000 25,000 70,000 Units sold Known product failures from sales in: October November December 120 460 180 130 160 220 350 210 210
Calculate, and prepare a journal entry to record, the estimated liability for product warranties at December 31. Assume that warranty costs of known failures have already been reflected in the records. Credit General Journal Date Description Dec.31 Product Warranty Expense Estimated Liability for Product Warranty To provide for estimated future warranty expense. $ Debit 64,800 $ 0 64,800

Answers

Answer and Explanation:

The computation of the estimated liability and the journal entry is given below:

But before that following calculations need to be done

The Estimated defective units is

= 70,000 × 4%

= 2,800 units

the actual defective units is

= 460 + 350 + 210

= 1,020 units

The no of unclaimed units is

= 2,800 - 1,020

= 1,780 units

Now the warranty expense is

= 1,780 units × $60 per unit

= $106,800

Now the journal entry is given below:

Product warranty expense Dr $106,800

    To Estimated liability  $106,800

(Being estimated liability is recorded)

vProblem 10-4 Partnership Formation (LO 10.2) Elaine's original basis in the Hornbeam Partnership was $40,000. Her share of the taxable income from the partnership since she purchased the interest has been $70,000, and Elaine has received $80,000 in cash distributions from the partnership. Elaine did not recognize any gains as a result of the distributions. In the current year, Hornbeam also allocated $1,000 of tax-exempt interest to Elaine. Calculate Elaine's current basis in her partnership interest. $fill in the blank 1

Answers

Answer: $31000

Explanation:

Elaine's current basis in her partnership interest will be calculated as:

= Value of original basis + (interest purchased - Cash received) + tax exempt interest

= $40000 + ($70000 - $80000) + $1000

= $40000 - $10000 + $1000

= $31000

Gibson Company makes fine jewelry that it sells to department stores throughout the United States. Gibson is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet A Bracelet B Cost of materials per unit $ 29 $ 45 Cost of labor per unit 33 33 Advertising cost per year 8,100 6,000 Annual depreciation on existing equipment 6,000 5,600 Required Identify the fixed costs and determine the amount of fixed cost for each product. Identify the variable costs and determine the amount of variable cost per unit for each product. Identify the avoidable costs and determine the amount of avoidable cost for each product.

Answers

Answer:

Gibson Company

Fixed costs for each product:

                                    Bracelet A   Bracelet B

Advertising cost per year   8,100        6,000

Annual depreciation on

existing equipment          6,000        5,600

Total fixed costs             $14,100     $11,600

Variable costs:

                                    Bracelet A   Bracelet B

Cost of materials per unit    $ 29          $ 45

Cost of labor per unit              33              33

Variable cost per unit          $ 62          $ 78

Avoidable costs:

                                    Bracelet A   Bracelet B

Variable cost per unit          $ 62          $ 78

Explanation:

a) Data and Calculations:

                                    Bracelet A   Bracelet B

Cost of materials per unit    $ 29          $ 45

Cost of labor per unit              33              33

Advertising cost per year   8,100        6,000

Annual depreciation on

existing equipment          6,000        5,600

NB:

Advertising cost can be avoided if production did not take place, just as all variable costs can be avoided without production.

Rachel's Designs has 2,000 shares of 7%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining shares are common stock. Due to cash flow difficulties, the company was not able to pay dividends in 2019 or 2020. The company plans to pay total dividends of $23,000 in 2021. How much of the $23,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders

Answers

Answer:

the dividend paid to preferred stockholders and  paid to common stockholders is $21,000 and $2,000 respectively

Explanation:

The computation of the dividend paid to preferred stockholders and  paid to common stockholders is shown below:

For preferred stockholders

= (2,000 × 7% × $50) × 3 years (2019,2020 and 2021)

= $7,000 × 3 years

= $21,000

And, for common stockholders

= $23,000 - $21,000

= $2,000

Hence,  the dividend paid to preferred stockholders and  paid to common stockholders is $21,000 and $2,000 respectively

Which of the following is a disadvantage of incentive compensation plans? Group of answer choices Employees are taxed heavily on their income from incentive plans. Employers are taxed heavily on their expenditure incurred through incentive plans. Employees know that rise in productivity will have no impact on their compensation. Employers are unable to increase employee productivity while following incentive plans. Employees don't develop loyalty to their employers when incentive plans are practiced.

Answers

Answer:

Employees don't develop loyalty to their employers when incentive plans are practiced.

Explanation:

Incentive compensation plan can be regarded as strategic that is been utilized by using incentives in driving a better business outcomes together with alignment of sales rep behavior to go with the goals of the organization. It is a compensation plan which can appear in different forms such as commissions as well as bonuses and prizes. It should be noted that one of the disadvantage of incentive compensation plans is that Employees don't develop loyalty to their employers when incentive plans are practiced.

Sexton, Corp., has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 860 $ 940 $ 900 $ 1,000 Sales in the year following this one are projected to be 15 percent greater in each quarter. a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Calculate payments to suppliers assuming a 60-day payables period.

Answers

Answer:

                                                   Q1               Q2             Q3            Q4

a. Payment of accounts ($)     258.00       282.00       270.00    300.00

b. Payment of accounts ($)     258.00       282.00       270.00    300.00

c. Payment of accounts ($)     258.00       282.00       270.00    300.00

Explanation:

Given:

                              Q1                Q2           Q3           Q4

Sales ($)               860              940         900         1,000

Therefore, we  have:

a. Calculate payments to suppliers assuming that the company places orders during each quarter equal to 30 percent of projected sales for the next quarter. Assume that the company pays immediately. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

This is done as follows:

                                                 Q1                Q2           Q3            Q4

Order (30% of Sales) ($)      258.00       282.00       270.00    300.00

Payment of accounts ($)     258.00       282.00       270.00    300.00

b. Calculate payments to suppliers assuming a 90-day payables period. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

A 90-day payables period implies that the payment has be made within the next 90 days or within one quarter or the same quarter. Therefore, we have:

                                                 Q1               Q2             Q3            Q4

Order (30% of Sales) ($)      258.00       282.00       270.00    300.00

Payment of accounts ($)     258.00       282.00       270.00    300.00

c. Calculate payments to suppliers assuming a 60-day payables period.

A 60-day payables period implies the payment for the Order in each of the quarters has to be made in the same quarter.

Therefore, we have:

                                                 Q1               Q2             Q3            Q4

Order (30% of Sales) ($)      258.00       282.00       270.00    300.00

Payment of accounts ($)     258.00       282.00       270.00    300.00

Note:

It can be observed that the answer look the same for all the questions.

Blu-Rays can be produced at a constant marginal cost of $5 per disk, and Superhero Studios is releasing the Blu-Rays for its last two major films. The Blu-Ray for Obscure-Man is priced at $20 per disk, and the Blu-Ray for Team-Up Flick 17: The Final Chapter, Part 1 is priced at $30 per disk. What are the price elasticities of demand for these two movies

Answers

Answer:

Obscure-Man = -1.33Team-Up Flick 17: The Final Chapter, Part 1 = -1.2

Explanation:

Price elasticity based on the variables given here, can be calculated using the formula:

= Price / (Marginal cost  - Price)

Obscure-Man:

= 20/ (5 - 20)

= -1.33

Team-Up Flick 17: The Final Chapter, Part 1:

= 30 / (5 - 30)

= -1.2

The standard cost of Product B manufactured by Pharrell Company includes 3.6 units of direct materials at $5.90 per unit. During June, 26,600 units of direct materials are purchased at a cost of $5.65 per unit, and 26,600 units of direct materials are used to produce 7,300 units of Product B. (a) Compute the total materials variance and the price and quantity variances.

Answers

Answer:

Results are below.

Explanation:

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (5.9 - 5.65)*26,600

Direct material price variance= $6,650 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (7,300*3.6 - 26,600)*5.9

Direct material quantity variance= $1,888 unfavorable

Elmhurst Corporation is considering changes to its responsibility accounting system. Which of the following statements​ is/are correct for a responsibility accounting​ system? I. In a cost​ center, managers are responsible for controlling costs but not revenue. II. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent. III. To be​ effective, a good responsibility accounting system must help managers to plan and to control. IV. Costs that are allocated to a responsibility center are normally controllable by the responsibility center manager.

Answers

Answer:

I. In a cost center, managers are responsible for controlling costs but not revenue.

ii. The idea behind responsibility accounting is that a manager should be held responsible for those items that the manager can control to a significant extent.

iii. To be effective, a good responsibility accounting system must help managers to plan and to control

Explanation:

XYZ Manufacturing Corporation manufactures two vacuum cleaners, the Standard and the Super. The following information was gathered about the two products: Standard Super Budgeted sales in units 2,160 540 Budgeted selling price $500 $1,500 Budgeted contribution margin per unit $80 $250 Actual sales in units 1,820 980 Actual selling price $550 $1,400 The total sales-mix variance in terms of the contribution margin is ________.

Answers

Answer:

Sales mix variance= $71,400F

Explanation:

A sales mix variance occurs when products are sold in a mix different from the standard mix. It can be calculated as follows:

Step 1: Actual total quantity sold = 1,820 + 980 =2,800

Step 2: Divide the actual total quantity sold into standard mix

Standard- 2160/2160+54)×2,800=2,240

Super -(540/2160+540)×2,800=560

Step 3: calculate mix variance as tabulated  below

Product       Std mix    Actual mix      Mix var    Cont. Magin  Mix Vari

Standard     2,240     1,820                420U          80               33,600 U

Super          560         980                 420 F          250           105,000 F

Variance                                                                                      71,400F

Sales mix variance= $71,400F

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