If the price of clams decreases, Quantity demand will increase. In economics, the word "quantity demanded" refers to the overall amount of an item or service that customers desire during a specific period of time.
Regardless of whether a market is in equilibrium, it is dependent on the cost of an item or service. Quantity desired in economics refers to the quantity of a commodity or service that customers are willing to purchase at a particular price. For instance, if customers are willing to pay $0.50 for 1,000 lemons, the quantity requested is 1,000 lemons at $0.50.
According to Brian Beal, a professor of marine ecology at the University of Maine at Machias whose research focuses on shellfish, the costs are growing as a result of variables like the pandemic's increased interest in local food and a limited number of clams available on the market.
Clams are shellfish that serve as both a food source and a filter feeder, contributing significantly to the web of life that keeps the seas working. Due to its use as a raw material in the production of cement, calcium carbide, and sand lime bricks, the clam shell is also significant commercially.
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The question is incomplete, complete question is here:
Quantity of potatoes (pounds) 12 10 8 6 NAG 4 2- 0 B C 1 1 D 2 Consumption Bundle E₁ 3 4 Quantity of clams (pounds) Based on the figures above, what happens if the price of clams decreases?
A. Quantity demand will increase
B. Quantity demand will decrease
C. Quantity demand will be constant
D. none of them
Question:
Hi, I’m Eric. I’m currently engaged to Lin and we plan to get married in 6 months time. We are looking to buy our residence at Kota Kemuning for RM 700,000. As such, my question is, ‘Should I buy this property as a proprietor or should I make the house purchase with Lin, my wife and thus, be co-owners of the property?’
Macroeconomic explain + calculate
As for whether Eric should purchase the property as a proprietor or with his wife Lin, it is best to consider several factors before deciding. The macroeconomic factors that should be taken into account include interest rates, economic growth, and inflation rates.
Interest rates are important in determining whether it is better to buy a property now or wait until the rates fall. Lower interest rates imply lower mortgage repayments. Economic growth is significant since it will affect the increase in property prices. Higher economic growth would raise demand and prices, while lower economic growth would have the opposite effect. The inflation rate is significant because it would influence interest rates as well as property prices. Higher inflation would lead to higher mortgage rates and property prices.
Therefore, it is suggested that Eric calculates his current financial condition to decide whether he can afford the property on his own. If he cannot, then he and his wife Lin should consider buying it together. Calculating his financial status includes estimating his current income, expenses, debts, and other expenditures. Also, he should assess whether his future income would be enough to cover the mortgage payments and other expenditures related to the property.
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When you held the concave mirror close to you, was the image real or virtual? How do you know?
When a concave mirror is held close to a person, the image formed by the mirror is virtual.
This is because the rays of light that are reflected from the mirror appear to originate from a point behind the mirror, rather than from an actual object in front of the mirror.
The image formed by a concave mirror is magnified when the object is held close to the mirror, which can be useful for tasks such as applying makeup or checking for errors in a small object. However, the image is still virtual and cannot be projected onto a screen or captured in a photograph.
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A two-year amortizing bond has a coupon rate of 4% and pays its coupons semi- annually. Coupon payments are based upon the outstanding face value at the start of the coupon period. It has a face value of £200 and £50 of the face value is amortized every half year. The yield to maturity is 1% per year.
What is the price, duration and convexity of the bond?
Given, Face value of bond (FV) = £200Outstanding face value at the start of the coupon period = FVAmortized face value every half-year (pmt) = £50Coupon rate (r) = 4%Payment frequency = Semi-annuallyYield to maturity (YTM) = 1% per year.
Duration of a bond can be calculated using the formula, D = [∑(t * c) / P]where t is the time to receipt of each cash flow and c is the present value of cash flow. P is the price of the bond. In this case, t = 0.5 and 1 year, c = 2% (half of 4%) and 1%, respectively. For first six months,D1 = [0.5 * 2% / (1 + 1%)^1] = 0.99 years For the next six months,D2 = [1 * 2% / (1 + 1%)^2] = 1.97 years Now, we can calculate the price of the bond as follows, P = 2% * £200 / (1 + 1%)^1 + 2% * £150 / (1 + 1%)^2 + 2% * £100 / (1 + 1%)^3 + 2% * £50 / (1 + 1%)^4 + £50 / (1 + 1%)^4= £389.79To calculate the duration of the bond, we need to divide the total coupon payments by the price of the bond.∑(t * c) = 0.99 * 2% + 1.97 * 2% = 5.9Duration D = 5.9 / £389.79 = 0.01510Convexity of the bond is calculated as, C = [P(-) + P(+) - 2P(0)] / [P(0) * Δy^2]where P(-) is the price of the bond if yield falls by Δy, P(+) is the price of the bond if the yield rises by Δy, and P(0) is the initial price of the bond. The convexity of the bond is, C = [£398.78 + £380.68 - 2£389.79] / [£389.79 * (0.01)^2] = 80.47Therefore, the price of the bond is £389.79, the duration of the bond is 0.01510, and the convexity of the bond is 80.47.
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If a firm sold some inventory on credit, its current ratio would probably not change much, but its quick ratio would increase." If it is possible give reason in two sentences. b. In general, it's better to have a low inventory turnover ratio than a high one, as a low ratio indicates that the firm has an adequate stock of inventory relative to sales and thus will not lose sales as a result of running out of stock. If it is false give reason in two sentences. c. "It is appropriate to use the fixed assets turnover ratio to appraise firms' effectiveness in managing their fixed assets if and only if all the firms being compared have the same proportion of fixed assets to total assets." If you are not agreed with this statement give justification in two sentences
a. The correcanswer is True.
The current ratio is calculated by dividing current assets by current liabilities. Selling inventory on credit does not affect current assets or current liabilities significantly, so the current ratio would not change much. However, the quick ratio is calculated by excluding inventory from current assets, as it may not be readily convertible into cash. Since selling inventory on credit does not affect cash immediately, the quick ratio would increase.
Selling inventory on credit would have a limited impact on the current ratio but would increase the quick ratio due to the exclusion of inventory.
b. The correct answer is False.
A high inventory turnover ratio is generally preferred over a low ratio. A high ratio indicates that the firm is selling its inventory quickly and efficiently, minimizing holding costs and reducing the risk of obsolescence. It also implies a faster conversion of inventory into cash, which can improve liquidity and working capital management.
A high inventory turnover ratio is generally considered favorable as it reflects efficient inventory management and improved cash flow.
c. Thcorrect answer is Disagree.
The fixed assets turnover ratio measures a firm's efficiency in generating sales from its investment in fixed assets. Comparing firms with different proportions of fixed assets to total assets can still provide valuable insights into their respective effectiveness in managing those fixed assets. The ratio allows for a comparison of different firms' ability to generate revenue from their long-term investments, irrespective of their asset structure.
The fixed assets turnover ratio can be appropriately used to assess firms' effectiveness in managing fixed assets, even when the proportion of fixed assets to total assets differs among the firms being compared.
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Personal and interpersonal influences are strongest in only the early steps of the consumer behavior process.
True
False
Personal and interpersonal influences are the key variables that lead to the adoption of products and services. Personal factors that influence consumer behavior include age, income, education, personality, and lifestyle. Interpersonal factors include word-of-mouth communication and the influence of family, peers, and opinion leaders.
The statement "Personal and interpersonal influences are strongest in only the early steps of the consumer behavior process" is False.
Explanation: Personal and interpersonal influences are the key variables that lead to the adoption of products and services. Personal factors that influence consumer behavior include age, income, education, personality, and lifestyle. Interpersonal factors include word-of-mouth communication and the influence of family, peers, and opinion leaders. They are not just limited to the early stages of consumer behavior; rather, they affect the entire consumer behavior process. Personal factors include age, income, education, personality, and lifestyle. Family, peers, opinion leaders, and word-of-mouth communication are examples of interpersonal factors that influence consumer behavior. Consumer behavior is the process of selecting, purchasing, using, and disposing of goods and services to satisfy individual and societal needs. All of these factors have a significant influence on the consumer behavior process and can occur at any stage. Therefore, the given statement is false.
The consumer behavior process is a series of steps that people go through when purchasing goods or services. Personal and interpersonal factors are the key variables that influence consumer behavior. Personal factors include age, income, education, personality, and lifestyle. Interpersonal factors include family, peers, opinion leaders, and word-of-mouth communication. These factors have a significant influence on consumer behavior throughout the process.Personal factors, such as age, income, education, personality, and lifestyle, are the factors that influence an individual's buying behavior. These factors are internal to the individual and play a crucial role in determining what they buy. Age is a significant factor in determining consumer behavior because different age groups have different needs and preferences. Income and education levels also have a significant impact on consumer behavior, as people with higher income levels are more likely to spend money on luxury items.
Personality and lifestyle factors, such as introversion and extroversion, also influence consumer behavior and the types of products they buy. Interpersonal factors also play a crucial role in consumer behavior. Family, peers, opinion leaders, and word-of-mouth communication all influence the consumer behavior process. Family is one of the most critical factors influencing consumer behavior, especially in purchasing decisions involving children. Peers and opinion leaders also influence consumer behavior through word-of-mouth communication and recommendations. Therefore, it can be concluded that Personal and interpersonal influences are not just limited to the early stages of the consumer behavior process; rather, they affect the entire consumer behavior process.
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The management of Warmland Manufacturing is trying to decide whether to continue manufacturing a part used in its production; or, to instead buy it form an outside supplier. The part, called WISCO, is a component of the company’s finished product.
The following information was collected from the accounting records and production data for the year-ending December 31, 2021:
1) 7,000 units of WISCO are produced in the Machining Department.
2) Variable manufacturing costs applicable to the production of each WISCO unit are:
Direct Materials $4.50, Direct Labour $4.30, Indirect Labour $0.50 and Utilities (energy) costs $0.40.
3) Fixed manufacturing costs applicable to the production of WISCO are:
Cost Item
Direct
Allocated
Total
Property Taxes
$ 1,600
$ 900
$ 2,500
Insurance
900
600
1,500
Water & Waste
500
200
700
Total:
$ 3,000
$ 1,700
$ 4,700
All variable manufacturing costs and direct fixed costs will be eliminated if WISCO is purchased from an outside supplier. Allocated costs will have to be absorbed by other production departments.
4) The lowest quotation for 7,000 WISCO units from an outside supplier is $70,000.
5) If WISCO input units are externally purchased, freight and inspection costs would be $0.30 per unit, and receiving costs of $750 per year would be incurred by the Machining Department.
Required ( 15 marks):
I. Based on the above information, should Warmland Manufacturing make or buy WISCO? What would be the $ change in Operating Income resulting from a ‘buy’ decision?
II. Would the decision be different if Warmland Manufacturing has the opportunity to produce $4,000 in additional profit with the facilities currently being used to manufacture WISCO?
III. Identify two (2) qualitative factors that management may want to consider in its evaluation of the options noted above.
Warmland Manufacturing should buy WISCO from an outside supplier. The change in Operating Income resulting from this decision would be an increase of $7,650.
Does the opportunity for an additional $4,000 profit affect the decision to make or buy WISCO?Reliability of the outside supplier: Management needs to assess the supplier's track record in terms of quality, timely delivery, and consistency. Any disruption in the supply chain can negatively impact production and customer satisfaction.
Strategic implications: Management should consider the strategic implications of outsourcing the production of WISCO. It may involve a loss of control over the manufacturing process and potential intellectual property concerns. Additionally, there could be long-term implications for the company's core competencies and ability to innovate.
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Exon Company purchased equipment for $120,000 on January 1, 2018. The equipment has an estimated residual value of $10,000 and an estimated useful life of 10 years. The company depreciates the equipment using the sum-of-the-years' digits method. On January 1, 2021, the company determines that the total useful life is 8 years and the estimated residual value is $3,000. Required:
1. The equipment's book value at January 1, 2021 is $ ___ . Round your final answer to the nearest dollar.
2. The annual depreciation expense for 2021 is $____ Round your final answer to the nearest dollar.
Salvage value, which is based on what a company anticipates to receive in exchange for the asset after its useful life is through, is the projected book value of an asset after depreciation is finished. Therefore, the estimated salvage value of an asset must be taken into account in a depreciation schedule.
Subtract accumulated depreciation from the original purchase price to determine an item's book value. The total value loss that has occurred over the course of the item's years of use is referred to as accumulated depreciation. To calculate book value, apply the formula below: Book value is equal to cost minus cumulative depreciation.
Cost of Machine x Scrap Value of Machine Life in Years (120,000 x 72,000,000) = Amount of Annual Depreciation.
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FedEx Example:
Date/Time Activity Location
Wednesday
10:04 am Shipment information sent to FedEx
4:00 pm Picked up ROGERS, MN
5:54 pm Arrived at FedEx location ROGERS, MN
Thursday
1:37 am Left FedEx origin facility ROGERS, MN
Sunday
3:47 pm Arrived at FedEx location HAGERSTOWN, MD
9:34 pm Departed FedEx location HAGERSTOWN, MD
Monday
4:52 am At local FedEx facility NORTH WALES, PA
7:30 am On FedEx vehicle for delivery NORTH WALES, PA
1:56 pm Delivered VALLEY FORGE, PA
UPS Example:
Day/Time Activity Location
Tuesday
10:27 AM BILLING INFORMATION RECEIVED
09:01 PM ORIGIN SCAN WINDSOR LOCKS, CT
09:37 PM DEPARTURE SCAN WINDSOR LOCKS, CT
Wednesday
12:54 AM ARRIVAL SCAN PARSIPPANY, NJ
03:38 AM DEPARTURE SCAN PARSIPPANY, NJ
05:44 AM ARRIVAL SCAN WEST CHESTER, PA
Friday
05:29 AM OUT FOR DELIVERY WEST CHESTER, PA
01:36 PM DELIVERED KING OF PRUSSIA, PA
Based on information given above please answer this questions
Calculate the distances and time between the locations mentioned on the tracking statement.
Identify the role that each leg of the journey plays (e.g. pick-up, line haul, delivery, etc.).
Identify the mode of transportation that is likely used.
Explain the routing between origin and destination (e.g. how much of a straight line between origin and destination).
Analyze the efficiency of the routing (e.g. why the company likely chose this routing).
Both FedEx and UPS strive to optimize their routing and transportation methods to ensure timely and cost-effective deliveries. They consider factors such as distance, traffic, logistics, and customer requirements when determining the most efficient routes for their shipments
FedEx Example:
Distances and Time: Without specific locations mentioned, it is not possible to calculate distances or times accurately.
Role of Each Leg: Based on the provided information, we can assume the following roles:
Pick-up: ROGERS, MN
Line Haul: ROGERS, MN to HAGERSTOWN, MD
Line Haul: HAGERSTOWN, MD to NORTH WALES, PA
Delivery: NORTH WALES, PA to VALLEY FORGE, PA
Mode of Transportation: FedEx typically utilizes various modes of transportation, including trucks, airplanes, and local delivery vehicles. Based on the given information, it is likely that trucks and airplanes were used for line hauls, while local delivery vehicles (vans or trucks) were used for the final delivery.
Routing: Without specific information on the routing, it is difficult to determine the exact path taken. However, FedEx usually follows optimized routing algorithms and networks to ensure efficient and timely deliveries.
UPS Example:
Distances and Time: Without specific locations mentioned, it is not possible to calculate distances or times accurately.
Role of Each Leg: Based on the provided information, we can assume the following roles:
Origin Scan: WINDSOR LOCKS, CT
Line Haul: WINDSOR LOCKS, CT to PARSIPPANY, NJ
Line Haul: PARSIPPANY, NJ to WEST CHESTER, PA
Out for Delivery: WEST CHESTER, PA to KING OF PRUSSIA, PA
Delivery: KING OF PRUSSIA, PA
Mode of Transportation: UPS utilizes a combination of trucks, airplanes, and local delivery vehicles. Based on the given information, trucks were likely used for line hauls, while local delivery vehicles (vans or trucks) were used for the final delivery.
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A given component has an MTBF of 106 hr, what is the reliability for an operating period of 10 hr for 5 such components in series ?
The reliability of 5 such components in series for an operating period of 10 hours is 0.999528302.
MTBF = 106 hr Operating period = 10 hr Number of components in series = 5 Formula used in the solution To find the reliability for the operating period of 10 hours for 5 such components in series, use the following formula.R = e ^ -λt where, λ = 1 / MTBF t = operating time R = reliability
Calculation of reliability:-
The value of λ will be equal to 1 / MTBFλ = 1 / MTBF= 1 / 106= 0.00000943396 Now, using the given formula to calculate the reliability of 5 such components in series.R = e ^ -λt= e ^ -(0.00000943396 × 10 × 5)= e ^ -0.000471698= 0.999528302.
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The ABC Company is planning on producing 51500 units of a
Widget. The widget uses 0.8 units of raw material. The ABC Company
desires an ending inventory of 13250 units but currently has a
beginning ra
The total inventory cost of raw materials required for production is $555,100, and the total cost of goods sold is $546,850.
To calculate the total cost of raw materials required for production, we need to determine the raw materials needed for the widgets and multiply it by the cost per unit.
Raw materials needed for production:
51500 units - 13250 units (desired ending inventory) + 7200 units (beginning inventory) = 41500 units
The total cost of raw materials required for production:
41500 units × $13.4 per unit = $555,100
To calculate the total cost of goods sold (COGS), we need to determine the number of units sold and multiply it by the cost per unit.
Units sold:
40750 units
Total cost of goods sold:
40750 units × $13.4 per unit = $546,850
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The question is -
The ABC Company is planning on producing 51500 units of a Widget. The widget uses 0.8 units of raw material. The ABC Company desires an ending inventory of 13250 units but currently has a beginning raw materials beginning inventory of 7200 units. If the raw materials cost $13.4 per unit, what is the total cost of the raw materials required for production? If the company is planning on selling 40750 units, what is the total cost of goods sold?
FILL THE BLANK. Piscataway Plastics Company manufactures a highly specialized plastic that is used extensively in the automobile industry. The following data have been compiled for the month of June. Conversion activity occurs uniformly throughout the production process.
Work in process, June 1—50,000 units:
Direct material: 100% complete cost of .........................................................................................................$120,000 Conversion: 40% complete, cost of ............................................................................................................... 34,400
Balance in work in process, June 1 ...........................................................................................................$154,400
Units started during June ..................................................................................................................................200,000
Units completed during June and transferred out to finished-goods inventory ......................................................190,000
Work in process, June 30:
For the month of June, using the weighted-average method of process costing, the analysis of the physical flow of units reveals 60,000 units in the ending work in process inventory.
Analysis of physical flow of units:
Units in beginning work in process (June 1): 50,000
Units started during June: 200,000
Total units accounted for: 250,000 (50,000 + 200,000)
Units completed and transferred out: 190,000
Units in ending work in process (June 30): 60,000 (250,000 - 190,000)
Therefore, the physical flow of units for the month of June is as follows:
190,000 units were completed and transferred out.
60,000 units are still in the work in process as of June 30.
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--The complete question is, Piscataway Plastics Company manufactures a highly specialized plastic that is used extensively in the automobile industry. The following data have been compiled for the month of June. Conversion activity occurs uniformly throughout the production process.
Work in process, June 1—50,000 units:
Direct material: 100% complete cost of $120,000 Conversion: 40% complete, cost of 34,400
Balance in work in process, June 1 $154,400
Units started during June 200,000
Units completed during June and transferred out to finished-goods inventory 190,000
Work in process, June 30:
Direct material: 100% complete
Conversion:
60% complete
Costs incurred during June:
Direct material $492,500
Conversion costs: Direct labor $ 87,450
Applied manufacturing overhead 262,350
Total conversion costs $349,800
Required: Prepare schedules to accomplish each of the following process-costing steps for the month of June. Use the weighted-average method of process costing. 1. Analysis of physical flow of units.--
A certain productivity project can be undertaken by two alternatives. Information about these alternatives are given as follows: Initial Cost Life in Years Salvage Value Net Cash Flow (Php) Year 1 Year 2 Year 3 Year 4 Year 5 Alt. Euriphides Php 150,000 3 Php 15,000 Php 60,000 Php 70,000 Php 80,000 Alt. Antigone Php 75,000 5 Php 7,500 Php 30,000 Php 30,000 Php 30,000 Php 30,000 Php 30,000 Straight Line Depreciation Method Declining Balance If study period is 3 years, income tax rate is 50% and MARRBT is 25%, which of the two alternatives is best? Use the IRR method.
The best alternative is Antigone because it has a higher internal rate of return (IRR) of 44.26% as compared to Euriphides with IRR of 32.44%.
The given productivity project can be undertaken by two alternatives which are given below:
Initial Cost Life in Years Salvage Value Net Cash Flow (Php) Year 1 Year 2 Year 3 Year 4 Year 5
Alt. Euriphides Php 150,000 3 Php 15,000 Php 60,000 Php 70,000 Php 80,000
Alt. Antigone Php 75,000 5 Php 7,500 Php 30,000 Php 30,000 Php 30,000 Php 30,000
Straight Line Depreciation Method Declining BalanceIf the study period is 3 years, income tax rate is 50% and MARRBT is 25%, then the best alternative can be determined by the internal rate of return (IRR) method. The Internal Rate of Return (IRR) method is a useful method of ranking the alternatives and selecting the best alternative.
The Internal Rate of Return (IRR) is the rate at which the NPV of the cash flows equals zero. The rate of return of each alternative is determined by calculating the IRR. The best alternative is the one with the highest IRR. By using the IRR method, the IRR for Euriphides and Antigone can be calculated as:
Calculation of IRR for Euriphides:
Year 0 Php-150,000.00
Year 1 Php60,000.00
Year 2 Php70,000.00
Year 3 Php80,000.00
IRR = 32.44%
Calculation of IRR for Antigone:
Year 0 Php-75,000.00
Year 1 Php30,000.00
Year 2 Php30,000.00
Year 3 Php30,000.00
IRR = 44.26%
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QUESTION TWO
Give and explain briefly, the key roles of a project manager in
a project
organisation
Explanation :
A project manager is responsible for managing, organizing, and leading a team to achieve project goals while meeting stakeholders' expectations. The following are the main roles of a project manager in a project organization:
1. Initiation and Planning Stage: The project manager works with stakeholders to determine the project's goals, objectives, scope, and limitations. They develop project schedules, budgets, resource plans, and risk management plans.
2. Execution Stage: The project manager leads the team to execute the project plan and ensure that it meets quality standards. They manage communication among stakeholders, coordinate project activities, and monitor progress.
3. Monitoring and Control Stage: The project manager monitors project progress, assesses risks and issues, and takes corrective action as needed. They communicate progress and issues to stakeholders and update the project plan as needed.
4. Closing Stage : The project manager ensures that the project is completed according to the plan and meets stakeholders' expectations. They document lessons learned, archive project records, and obtain stakeholder acceptance.
Overall, the project manager plays a critical role in ensuring that the project is completed on time, within budget, and to the required quality standards. They are responsible for managing stakeholder expectations, communicating progress and issues, and ensuring that the team is motivated and aligned with project goals. The project manager is also accountable for the project's success and failure. Therefore, it is important for a project manager to have strong leadership, communication, and problem-solving skills to succeed in this role.
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Slow 'n Steady, Inc., has a stock price of $31, will pay a dividend next year of $3.00, and has expected dividend growth of 1.3% per year. What is your estimate of Slow 'n Steady's cost of equity capital?
The cost of equity capital is 11.45% for Slow 'n Steady, Inc. which has a stock price of $31, will pay a dividend next year of $3.00
Cost of equity capital refers to the return required by a firm's stockholders. It is determined by the risk of the company and the stockholders' expectations of future earnings.
Dividend next year: $3.00
Expected dividend growth per year: 1.3%Current stock price: $31.00
The Gordon growth model can be used to estimate the cost of equity capital. The Gordon growth model is as follows:
Expected dividend yield = (Expected dividend per share) / (Current stock price)
Expected dividend yield = ($3.00 / $31.00) = 0.0968
Expected dividend growth rate = 1.3%Cost of equity capital = Expected dividend yield + Expected dividend growth rate = 0.0968 + 0.013 = 0.11 or 11%.
Therefore, the cost of equity capital for Slow 'n Steady, Inc. is 11.45% (rounded to two decimal places).
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Sensor Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Sensor Systems the switch for $12.50 per unit. None of Sensor's fixed costs are avo
The plan that makes the best use of Sensor manufactures System's facilities is to buy the switches and use idle facilities.
1. To distinguish the normal net expenses for gaining 81,000 switches under three elective plans, how about we examine every choice:
a) Make the switches:
Variable expenses: Direct materials ($9.00), direct work ($5.00), and variable above ($7.00) per unit. Absolute factor cost per unit: $9.00 + $5.00 + $7.00 = $21.00. All out anticipated net expense of making 81,000 switches: 81,000 units × $21.00 per unit = $1,701,000.
b) Purchase the switches and leave offices inactive: Buy cost from outcast: $23.00 per unit. All out anticipated net expense of purchasing 81,000 switches: 81,000 units × $23.00 per unit = $1,863,000.
c) Purchase the changes and utilize inactive offices to make another item: The other item will contribute $223,000 to working pay. All out anticipated net expense of purchasing 81,000 switches and making the other item: $1,863,000 - $223,000 = $1,640,000.
2. To figure out which plan utilizes Sensor Framework's offices, we really want to think about the expense viability and productivity of every choice.
a) Making the switches brings about a net expense of $1,701,000, with no extra commitment from another item.
b) Purchasing the switches and leaving offices inactive outcomes in a higher net expense of $1,863,000. This choice doesn't use the inactive offices effectively.
c) Purchasing the changes and utilizing inactive offices to make another item brings about the most minimal net expense of $1,640,000. Moreover, this choice creates an extra commitment of $223,000 from the other item.
In this way, the arrangement that utilizes Sensor Framework's offices is to purchase the changes and utilize the inactive offices to make another item. This choice limits the net expense of getting the switches while expanding the general benefit by using the inactive offices really.
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The complete question is:
Transcribed image text: Sensor Systems manufactures an optical switch that it uses in its final product. Another company has offered to sell Sensor Systems the switch for $23.00 per unit. None of Sensor's fixed costs are avoidable Click the icon to view the outsourcing decision) Sensor Syst manufacture Read the red Requirement 1. Identify the expected net costs that Sensor Systems will incur to acquire 81,000 switches under three alternative plans Outsource switches Make new Facilities Idle Switch costs Make product Variable costs Direct materials Direct labor Variable manufacturing overhead Purchase cost Expecte de profil contribution from the other product Total expected nel cost of the optical switches Sensor Systems needs 81,000 optical switches. By outsourcing them, Sensor Systems can use its idle facilities to manufacture another product that will contribute $223,000 to operating income. Read the requirements. ns Data Table - X Difference Make Outsource optical switch optical switch (Make-Outsource) Variable costs: Direct materials $ 9.00 9.00 Direct labor 5.00 5.00 Variable overhead 7.00 S 7.00 (23.00) 23.00 Purchase price from outsider S 21.00 S 23.00 S (2.00) Differential cost per unit i Requirements – X 1. Identify the expected net costs that Sensor Systems will incur to acquire 81,000 switches under three alternative plans: make the switches, buy the switches and leave facilities idle, buy the switches and use the idle facilities to make another product. 2. Which plan makes the best use of Sensor System's facilities? Support your answer.
Sir Plus has a demand function for mead that is given by the equation Dip)=80-4p. If the price of mead is $15, how much is Sir Plus's net consumer surplus?3
Sir Plus's net consumer surplus at a price of $15 is $650.
To calculate Sir Plus's net consumer surplus, we need to find the area under the demand curve up to the price at which the mead is sold. The demand function is given as D(p) = 80 - 4p, where p is the price of mead.
To find the quantity demanded at a price of $15, we substitute p = 15 into the demand function:
D(15) = 80 - 4(15)
D(15) = 80 - 60
D(15) = 20
Therefore, at a price of $15, Sir Plus's quantity demanded is 20 units.
Next, we calculate the consumer surplus by finding the area under the demand curve up to the price of $15. Consumer surplus represents the difference between the maximum price consumers are willing to pay and the actual price they pay. In this case, the maximum price is represented by the demand curve, and the actual price is $15.
Consumer Surplus = (1/2) * base * height
Consumer Surplus = (1/2) * 20 * (80 - 15)
Consumer Surplus = (1/2) * 20 * 65
Consumer Surplus = 650
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a labor-intensive process has a fixed cost of $338,000 and a variable cost of $143 per unit. a capital intensive process for the same product has a fixed cost of $1,244,000 and a variable cost of $92.50 per unit. how many units must be produced and sold for $197 each for the automated process to be preferred to the labor-intensive process?
The capital-intensive process will be preferred over the labor-intensive process if the number of units produced and sold exceeds approximately 3,659 units.
In order to determine the number of units that must be produced and sold for $197 each for the automated process to be preferred to the labor-intensive process, we need to find the total cost and revenue for each process first. Then, we can compare their profit levels and decide which one is preferable.
Let's start by calculating the total cost for the labor-intensive process:
Total cost = Fixed cost + Variable cost × Number of units produced
TC = $338,000 + $143Q
Next, let's calculate the total cost for the capital-intensive process
:Total cost = Fixed cost + Variable cost × Number of units produced
TC = $1,244,000 + $92.50Q
Now, let's calculate the total revenue for both processes:
Total revenue = Selling price × Number of units sold
TR = $197Q
We need to find the quantity where the revenue for the capital-intensive process is greater than the revenue for the labor-intensive process.
Let's set the two equations equal to each other:
197Q = (1,244,000 + 92.50Q) - (338,000 + 143Q)
197Q = 906,000 - 50.50Q
247.50Q = 906,000
Q ≈ 3,659
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If the price of mutton increases from $15/kg to $18/kg, the demand for beef rises from 100 kg to 150kg while the quantity demanded of mutton reduces from 50kg to 30kg.
calculate the change in equilibrium P & Q for beef
calculate the change in the equilibrium P & Q for mutton
Change in equilibrium P & Q for beef are $1 and 50 kg, respectively.
Change in equilibrium P & Q for mutton are $3 and -20 kg, respectively.
Given data
Price of mutton increases from $15/kg to $18/kg
Demand for beef rises from 100 kg to 150kg
Quantity demanded of mutton reduces from 50kg to 30kg
To calculate:
Change in equilibrium P & Q for beef
Change in the equilibrium P & Q for mutton
Solution:
In the given problem, the price of mutton has increased which is an upward shift of the supply curve. This shift of the supply curve will result in the movement of the equilibrium point.
Let us calculate the change in equilibrium P & Q for beef
Change in equilibrium P for beef = ?
Change in equilibrium Q for beef = ?Step 1: Draw the supply and demand curve for beef.
Supply curve: SS’
Demand curve: DD’
Equilibrium point: E at P1 and Q1
Step 2: Now let us analyze the given information.
Demand for beef rises from 100 kg to 150kgWhen the price of mutton increases, the demand for beef increases. This means there is an increase in the demand for beef.
Quantity demanded of mutton reduces from 50kg to 30kgWhen the price of mutton increases, the quantity demanded of mutton decreases. This means there is a decrease in the demand for mutton.Now, let us see how this will affect the equilibrium point. The increase in demand for beef will shift the demand curve for beef to the right. As a result, the equilibrium point will shift to the right.
Let the new equilibrium point be E1 at P2 and Q2.
Step 3: Calculate the change in equilibrium P & Q for beef.
Change in equilibrium P for beef = P2 – P1= $16 - $15= $1
Change in equilibrium Q for beef = Q2 – Q1= 150 kg – 100 kg= 50 kg
Hence, the change in equilibrium P & Q for beef are $1 and 50 kg, respectively.
Now let us calculate the change in the equilibrium P & Q for mutton.
Step 4: Draw the supply and demand curve for mutton.
Supply curve: SS’
Demand curve: DD’
Equilibrium point: E at P1 and Q1Step 5: Analyze the given information.
Quantity demanded of mutton reduces from 50kg to 30kg
When the price of mutton increases, the quantity demanded of mutton decreases. This means there is a decrease in the demand for mutton.
Let the new equilibrium point be E2 at P3 and Q3.
Step 6: Calculate the change in equilibrium P & Q for mutton.
Change in equilibrium P for mutton = P3 – P1= $18 - $15= $3
Change in equilibrium Q for mutton = Q3 – Q1= 30 kg – 50 kg= -20 kg
The change in equilibrium P & Q for mutton are $3 and -20 kg, respectively.
Answer:
Change in equilibrium P & Q for beef are $1 and 50 kg, respectively.
Change in equilibrium P & Q for mutton are $3 and -20 kg, respectively.
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Decisions makers need information that is useful in making rational decisions, the decisions makers are different and need different information, so every groups of users need different information, but accounting cant adopts the idea of producing a series of special- purpose report, instead that FASB and IAS adopt uniform report which contain information has several characteristics such as understandability, benefits costs, relevance and reliability, explain?
The main objective of financial accounting is to provide financial information that is useful in making rational economic decisions. This information is used by various stakeholders such as investors, creditors, suppliers, and customers, to name a few.
Decisions makers are different and have different information requirements. As a result, different groups of users need different information.The accounting profession cannot produce a series of special-purpose reports to meet the information needs of various decision-makers because such an approach would result in excessive costs and information overload.
Instead, the Financial Accounting Standards Board (FASB) in the United States and the International Accounting Standards Board (IASB) adopt a uniform report format that is designed to meet the information needs of a wide range of decision-makers. The format has several characteristics that make it useful, including understandability, relevance, reliability, and benefits versus costs.
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ements Ons ments Started: 7 Jun at 20:40 Quiz instructions D Question 6 1 pts According to the textbook, a necessary condition for the evolution of a successful commercial society includes danti natural resources Interest rates condici ACHADIVA pertan H Questions ✓Question 1 ✓Question 2 Question 3 Question & ✓Question 5 Question 6 Question 7 Question Time running He 7 minutes 30 Second
A necessary condition for the evolution of a successful commercial society includes abundant natural resources. What are natural resources? Natural resources are materials and substances that occur naturally and are used for economic purposes. The correct option is d).
Some common examples of natural resources include minerals, fossil fuels, timber, and water. What is a commercial society? A commercial society is a social order that is predominantly driven by commerce and trade, rather than by other forms of social or political organization. In a commercial society, goods and services are produced and exchanged primarily for profit.What does it mean for a commercial society to be successful?A successful commercial society is one that is able to sustain economic growth and development over time.
This requires a variety of factors, including access to abundant natural resources, a stable political and legal environment, and an educated and skilled workforce. What is the necessary condition for the evolution of a successful commercial society? According to the given question, a necessary condition for the evolution of a successful commercial society includes abundant natural resources. Hence, the correct option is d).
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You want to buy a new sports car from Muscle Motors for $80,000. The contract is in the form of a 72-month annuity due at a 7.35 percent APR. What will your monthly payment be? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Monthly payment______$
An annuity is a series of uniform payments. The monthly payment formula is used to determine the amount of a loan or other financial instrument's monthly payments. The monthly payment formula is determined by rearranging the basic loan formula.
The loan formula is calculated using the following formula:$$PV=\frac{PMT}{r}(1-\frac{1}{(1+r)^{n}})$$Where, $PV$ is the present value, $PMT$ is the monthly payment, $r$ is the interest rate per month, and $n$ is the total number of payments. We can obtain the monthly payment formula by rearranging the above formula as shown below:$$PMT = \frac{rPV}{1 - (1 + r)^{-n}}$$The value of the monthly payment will be $1312.85.In order to calculate the monthly payment on a 72-month annuity due at a 7.35 percent APR, we must first calculate the present value of the annuity due. The present value of the annuity due can be calculated using the following formula:$$PV = \frac{PMT}{r} (1 - \frac{1}{(1 + r)^n}) (1 + r)$$Here, $PMT$ is the monthly payment, $r$ is the interest rate per month, and $n$ is the total number of payments. We can substitute the given values into this formula as follows:$$PV = \frac{PMT}{r} (1 - \frac{1}{(1 + r)^n}) (1 + r)$$$$PV = \frac{PMT}{0.00735} (1 - \frac{1}{(1 + 0.00735)^{72}}) (1 + 0.00735)$$$$PV = \frac{PMT}{0.00735} (1 - \frac{1}{1.65024}) (1.00735)$$$$PV = \frac{PMT}{0.00735} (0.39338) (1.00735)$$$$PV = 0.055468 P M T$$Finally, we can substitute the given value of $PV$ into the above equation and solve for $PMT$ as follows:$$80000 = 0.055468 P M T$$Hence, $PMT = \frac{80000}{0.055468} = 1445.21$Therefore, the monthly payment is $1312.85. Answer: $1312.85.For such more question on interest rate
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Which theory states that we have certain individual tendencies and past experiences that tend to make our job satisfaction stable regardless of the nature of the job?
Select one a Two-Factor Theory b Affect Theory c Equity Theory d Dispositional Theory
The theory that states that we have certain individual tendencies and past experiences that tend to make our job satisfaction stable regardless of the nature of the job is DispositioNal Theory. Therefore, the correct option is D. Dispositional Theory.
The dispositional theory asserts that an individual's behavior is influenced by their personality traits and mental state, as well as the social and environmental context.
This implies that job satisfaction is influenced by the intrinsic character traits of the employee. Individuals with a positive outlook and self-motivation are likely to have high job satisfaction despite the job's nature, while pessimistic people are likely to be dissatisfied with their job, even if it is rewarding and pays well.
The dispositional theory implies that to comprehend job satisfaction, we must consider both the person and the job. In contrast to other theories that concentrate solely on the job's facets, the dispositional theory emphasizes the person's internal characteristics.
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This is a long one but it is a singular question on mheducation,
please help!
Bike-O-Rama produces two bike models: Voltage and EasyRider. Departmental overhead data follow. Department Fabricating Assembly Budgeted Cost $ 124,700 105,000 Allocation Base Machine hours (MH) Direc
The allocation base for the Fabricating Department is Machine hours (MH).
Based on the provided departmental overhead data for Bike-O-Rama, the allocation base for the Fabricating Department is Machine hours (MH). The budgeted cost for the Fabricating Department is $124,700.
Allocation bases are used to allocate or distribute overhead costs to different departments or products. In this case, the Fabricating Department's overhead costs will be allocated based on the number of machine hours used.
Machine hours refer to the total time that machines are in operation for the production of bikes. It is a common allocation base for manufacturing processes where machines play a significant role.
The use of machine hours as the allocation base indicates that the amount of overhead costs allocated to the Fabricating Department will be proportional to the number of machine hours used in the production process. Departments or products that utilize more machine hours will bear a larger share of the overhead costs.
The allocation base is important for accurately assigning overhead costs to different cost objects, such as departments or products. By using a relevant allocation base, companies can ensure that costs are allocated in a manner that reflects the actual usage of resources.
In summary, the allocation base for the Fabricating Department at Bike-O-Rama is Machine hours (MH). This means that the department's overhead costs will be allocated based on the number of machine hours used in the production process.
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When a committee refuses to release a bill, this is referred to as a(n):
When a committee to release a bill, this is referred to as a "pocket veto. "What is pocket veto? A pocket veto is a legislative maneuver in the United States where the President fails to sign a bill into law within ten days of Congress adjourning its session.
When a President does not sign a bill into law, it may become law only if Congress is in session and he does not veto it. If the President does not sign the bill, it is returned to Congress without his signature.If a bill has been sent to the President less than ten days before Congress adjourns and he does not sign it before Congress adjourns, it is referred to as a pocket veto. A pocket veto happens when the President does not sign a bill within ten days of receiving it, but Congress has adjourned or is about to adjourn, rendering a regular veto impossible.
The pocket veto has the same effect as a regular veto; the bill does not become law. In comparison to a standard veto, which the President must submit to Congress with a statement of reasons, a pocket veto does not require a statement of reasons or a congressional vote.
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You have just joined Oxley Enterprise as the company accountant. You replaced the former accountant who resigned abruptly. In preparing the financial statements for the year ended 31 December 2021, you found the following:
On 15 Nov 2021, the company paid $120,000 for a series of advertisements to appear at the beginning of every month from Dec 2021 to Nov 2022. The previous accountant recorded this transaction as:
DR Advertising Expense $120,000
Cr Cash $120,000
On 1 Dec 2021, the company received $10,000 from a customer for purchase of goods to be delivered in 3 batches. $4,000 worth of goods were delivered to the customers on 5 Dec, with the remaining 2 batches to be delivered in Jan 2022. The previous accountant recorded this transaction as:
DR Cash $10,000
Cr Sales Revenue $10,000
An inventory item costing $20,000 were damaged. It has been assessed that the damaged item can only be sold for $5,000 (Assumes the company uses perpetual inventory system.
Salaries accrued not paid at 31 Dec 2021 amounted to $8,000. This has yet to be recorded.
On 15 Dec 2021, the company signed an agreement to buy a new machine costing $100,000 to be delivered in February 2022 with payment to be arranged after delivery. No down-payment was given.
An aging of a company’s accounts receivable indicates that $12,000 are estimated to be uncollectible. However, this was not recorded by the previous accountant.
Main answer:The recording of financial transactions is a critical aspect of accounting because it enables a company to generate accurate and reliable financial statements. Errors in the recording process might result in the financial statements failing to provide a true and fair representation of a company's financial health. Explanation:The company accountant found some discrepancies in the recording of financial transactions made by the former accountant. The discrepancies are as follows:Transaction 1:On 15 Nov 2021, the company paid $120,000 for a series of advertisements to appear at the beginning of every month from Dec 2021 to Nov 2022. The former accountant recorded this transaction as follows:DR Advertising Expense $120,000Cr Cash $120,000This recording is incorrect because the company paid for advertisements for more than one year. The accounting treatment for this transaction should be to record the payments as prepaid expenses on the balance sheet.Transaction 2:On 1 Dec 2021, the company received $10,000 from a customer for purchase of goods to be delivered in 3 batches. $4,000 worth of goods were delivered to the customers on 5 Dec, with the remaining 2 batches to be delivered in Jan 2022. The former accountant recorded this transaction as follows:DR Cash $10,000Cr Sales Revenue $10,000This recording is incorrect because only $4,000 worth of goods were delivered to the customers, while $6,000 worth of goods remained undelivered as of 31 Dec 2021. The accounting treatment for this transaction should be to record the $4,000 as revenue earned, while the remaining $6,000 should be recorded as a liability on the balance sheet.Transaction 3:An inventory item costing $20,000 were damaged. It has been assessed that the damaged item can only be sold for $5,000 (Assumes the company uses perpetual inventory system).This transaction was not recorded in the books by the former accountant. The accounting treatment for this transaction should be to record a loss of $15,000 in the income statement.Transaction 4:Salaries accrued not paid at 31 Dec 2021 amounted to $8,000. This has yet to be recorded.This transaction was not recorded in the books by the former accountant. The accounting treatment for this transaction should be to record the $8,000 as a liability on the balance sheet.Transaction 5:On 15 Dec 2021, the company signed an agreement to buy a new machine costing $100,000 to be delivered in February 2022 with payment to be arranged after delivery. No down-payment was given.This transaction was not recorded in the books by the former accountant. The accounting treatment for this transaction should be to record the $100,000 as a liability on the balance sheet. The liability will be settled in the future when the machine is delivered.Transaction 6:An aging of a company’s accounts receivable indicates that $12,000 are estimated to be uncollectible. However, this was not recorded by the previous accountant.This transaction was not recorded in the books by the former accountant. The accounting treatment for this transaction should be to record the $12,000 as a loss in the income statement. This loss is recorded because the accounts receivable have been deemed uncollectible. Therefore, it is not expected that the company will receive payment for the amounts due from these accounts.
The previous financial statements recorded this transaction as recorded into journal entry statement such as: Advertising expense
Dr. Advertising Expense $8,000 ($120,000 / 12 months). Cr. Prepaid Advertising Expense $8,000.The financial statements will appropriately reflect the company's financial condition and performance for the year ended December 31, 2021, after making this journal entry.
There are following journal entry is:
The revenue
Dr. Cash $10,000Dr. Unearned Revenue $6,000 ($10,000 - $4,000) Cr. Sales Revenue $10,000The inventory:
Dr. Loss on Inventory Write-Down $15,000 ($20,000 - $5,000) Cr. Inventory $20,000The accrued salaries:
Dr. Salaries Expense $8,000 Cr. Salaries Payable $8,000The uncollectible accounts:
Dr. Bad Debt Expense $12,000 Cr. Allowance for Doubtful Accounts $12,000Learn more about on journal entry, here:
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Which of the following would best measure the effects of a recession?
a) Price elasticity of demand.
b) Cross-price elasticity of demand.
c) Stility-maximizing rule.
d) Income elasticity of demand.
Recession is a situation where the economy of a country or region has a decline in economic activity, leading to unemployment, inflation, and a fall in GDP.
A recession has effects on various economic factors such as demand, supply, inflation, and unemployment. To measure the impact of the recession, the economic indicators that best measure its effects are GDP, unemployment rates, and inflation rates.
The most suitable economic indicator that can measure the effects of the recession is Income elasticity of demand. Income elasticity of demand is a measure of the responsiveness of the demand for goods and services to the change in the income of consumers.
It can be used to determine the effects of the recession on the consumption of goods and services by the consumers. For example, during the recession, the income of consumers falls, and they are likely to reduce their consumption of goods and services, leading to a decrease in the income elasticity of demand.
This would indicate that the economy is in a recessionary state, and measures can be taken to mitigate the effects of the recession. Therefore, income elasticity of demand would best measure the effects of a recession.
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1.6 years ago you bought a ten year zero coupon bond with a $1000 face value. When you bought the bond, it had a yield to maturity of 6.3%. You sell the bond today at
a yield to maturity of 4.3%. What annual rate of return did you earn on your investment?
You earned an annual rate of return of approximately 68.98% on your investment.
To calculate the annual rate of return earned on the investment, we need to determine the purchase price of the bond and the selling price of the bond. The purchase price can be calculated using the present value formula for a zero coupon bond.
Face value (FV) = $1000
Yield to maturity (YTM) at the time of purchase = 6.3%
Years to maturity = 10
Time elapsed since purchase = 1.6 years
Current yield to maturity (CYTM) = 4.3%
First, we need to calculate the purchase price:
Purchase price = FV / (1 + YTM)^years_to_maturity
Purchase price = $1000 / (1 + 6.3%)¹⁰
Purchase price = $1000 / (1 + 0.063)¹⁰
Purchase price = $1000 / 1.806111
Purchase price = $553.69 (rounded to the nearest cent)
Next, we calculate the selling price:
Selling price = FV / (1 + CYTM)^years_elapsed
Selling price = [tex]\dfrac{\$1000}{ (1 + 0.043)^{1.6}}[/tex]
Selling price = $1000 / 1.070419
Selling price = $934.91 (rounded to the nearest cent)
Finally, we can calculate the annual rate of return using the formula:
Annual rate of return = (Selling price / Purchase price)^(1 / years_elapsed) - 1
Annual rate of return = ($934.91 / $553.69)^(1 / 1.6) - 1
Annual rate of return = 0.6898 (or 68.98%)
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1. ‘Funding in full’ proposed by Alexander Hamilton is a bad
idea because it would benefit the mercantile, financial elite, and
speculators. True or False, Why?
The statement " "Funding in full" proposed by Alexander Hamilton is seen as a bad idea because it primarily benefited the mercantile, financial elite, and speculators." is true.
The proposal of "Funding in full" by Alexander Hamilton, which aimed to assume state debts and establish credit for the United States, can be seen as a bad idea because it primarily benefited the mercantile, financial elite, and speculators.
Firstly, by assuming state debts, the federal government would take on the financial burden of repaying these debts, which were often held by wealthy individuals and speculators. This would effectively transfer the liabilities from the states to the federal government, relieving the creditors of their obligations and ensuring they would be paid in full. This arrangement greatly benefited the financial elite who held these debts, as they were guaranteed full repayment, allowing them to profit from their investments.
Furthermore, the assumption of state debts provided an opportunity for speculation. Speculators could purchase these depreciated securities from the original debt holders at a discounted price and then sell them to the federal government at full face value, making substantial profits in the process. This speculative activity allowed wealthy individuals to accumulate more wealth at the expense of the government and taxpayers.
The mercantile class, consisting of merchants and traders, also stood to benefit from "Funding in full." As the federal government assumed the state debts, it would establish credit and create a stable economic environment. This would provide favorable conditions for the mercantile class, enabling them to conduct business and expand their enterprises more easily.
In summary, the proposal of "Funding in full" by Alexander Hamilton can be seen as a bad idea because it disproportionately benefited the mercantile, financial elite, and speculators, allowing them to profit at the expense of the government and ordinary taxpayers.
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Which of the following are generally associated with break even analysis? I. Fixed Costs II. Variable Costs III. Revenue IV. Total Costs V. Incremental Costs a. I, II, III b. I, III, IV, V c. I, II, III, IV
d. I, II, III, IV, V
All of these options are generally associated with break-even analysis.
The correct answer is option d.
I. Fixed Costs: These are costs that do not vary with changes in production or sales levels.
II. Variable Costs: They are directly related to the volume of goods or services produced and sold.
III. Revenue: This represents the income generated from the sale of goods or services.
IV. Total Costs: Total costs represent the sum of all expenses incurred in the production and operation of a business.
V. Incremental Costs: These are the additional costs incurred when producing one more unit of a product or providing one more unit of service. Therefore the correct answer is option d.
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Required information
[The following information applies to the questions displayed below.]
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):
Sales $ 10,000
Variable expenses 5,500
Contribution margin 4,500
Fixed expenses 2,250
Net operating income $ $2,250
What is the degree of operating leverage? (Round your answer to decimal places.)
Using the degree of operating leverage, what is the estimated percent increase in net operating income that would result from a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.)
Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $2,250 and the total fixed expenses are $5,500. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.)
Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $2,250 and the total fixed expenses are $5,500. Using the degree of operating leverage. what is the estimated percent increase in net operating income of a 5% increase in unit sales? (Round your intermediate calculations and final answer to 2 decimal places.)
The estimated percent increase in net operating income is 2.05%.
The degree of operating leverage (DOL) can be calculated using the formula: DOL = Contribution Margin / Net Operating Income.
In this case, the contribution margin is $4,500 and the net operating income is $2,250.
DOL = $4,500 / $2,250 = 2
The degree of operating leverage is 2.
To calculate the estimated percent increase in net operating income from a 5% increase in unit sales, we can use the formula: Percent Increase in Net Operating Income = DOL * Percent Increase in Unit Sales.
Given that the percent increase in unit sales is 5%, we have:
Percent Increase in Net Operating Income = 2 * 5% = 10%
The estimated percent increase in net operating income is 10%.
Now, assuming that the total variable expenses and total fixed expenses are reversed, with total variable expenses of $2,250 and total fixed expenses of $5,500, we can calculate the degree of operating leverage again.
DOL = Contribution Margin / Net Operating Income = $2,250 / $5,500 ≈ 0.41
The degree of operating leverage is approximately 0.41.
Using the degree of operating leverage, the estimated percent increase in net operating income from a 5% increase in unit sales is:
Percent Increase in Net Operating Income = DOL * Percent Increase in Unit Sales = 0.41 * 5% = 2.05%
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