Answer and Explanation:
1. Business implication: if there are no trade barriers, it would enable them get better raw materials for their business and increase customer base
Legal anti trust implication: lobbying is illegal in some countries
2. Business implication: this would attract more manufacturers who were not previously members of the association which would in turn promote the goals of the association in improving trade amongst the manufacturers
Legal anti trust implication: associatio may be exposed to legal examination, example increased regulations
3 business implications:sales territories would invariably create a safe and secure investment for manufacturers such that there is less cost of marketing and campaigning as consumers are guaranteed
Legal implications: this is against anti trust laws and goes against free trade policies and illegal monopoly
4 business implications: boycotting this supplier could create an alternative source of raw materials which wouldn't be as efficient and even cost more
Legal implications: boycotting a large supplier such as this who might have a political backing might bring political retaliations from the supplier's political proxies who might create other regulations in the supplier's favour
g Benton, Inc. has decided to discontinue manufacturing its Quantum model personal organizer. Currently the company has a number of partially completed personal organizers on hand. The company has spent $111 per unit to manufacture these organizers. To complete each unit, costs of $14 for material and $15 for direct labor will be incurred. In addition, $9 of variable overhead and $34 of allocated fixed overhead (relating primarily to depreciation of plant and equipment) will be added per unit. If Benton, Inc., completes the organizers, it can sell them for $124 per unit. Another manufacturer is interested in purchasing the partially completed organizers for $107 per unit and converting them into inventory tracking devices. Determine whether Benton should complete the personal organizers or sell them in their current state.
Answer:
Sell them in their current state
Explanation:
Ignore the cost already incurred ($111) since it is a sunk cost (already spent) and should not affect future decision.
1) The incremental cost of completing each unit = material cost ($14) + direct labour cost ($15) + variable overhead cost ($9) = $38 (allocated fixed cost was not included since it is a non-cash item)
With a sale price of $124, the profit per unit = $124 - $38 = $89.
2) Whereas, selling the partially completed unit will earn $107 (without any additional cost).
Since selling the partially completed unit earns higher incremental value than completing manufacture before sale, selling is the optimal decision.
Statement of Cash Flows
Colorado Corporation was organized at the beginning of the year, with the investment of $251,500 in cash by its stockholders. The company immediately purchased an office building for $304,900, paying $212,700 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,500 promissory note at a local bank during the year and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers. It paid $66,500 for inventory, $20,500 in salaries and wages, and another $4,000 in taxes. Colorado paid $6,200 in cash dividends.
Required
1. Prepare a statement of cash flows for the years
2. What does this statement tell you that an income statement does not?
Answer:
Required 1 ;
Statement of Cash Flows
Cash flow from Operating Activities
Cash Receipts from Customers $93,970
Cash Payments to Suppliers and Employees ($87,000)
Cash Generated from Operations $6,970
Income tax paid ($4,000)
Net Cash from Operating Activities $2,970
Cash flow from Investing Activities
Purchase of Office Building ($212,700)
Net Cash from Investing Activities ($212,700)
Cash flow from Financing Activities
Capital Investment $251,500
Promissory note (Five Year) $60,500
Dividends Paid ($6,200)
Net Cash from Financing Activities $305,800
Beginning Cash and Cash Equivalent $0
Movement during the year $96,070
Ending Cash and Cash Equivalent $96,070
Required 2 ;
It shows the liquidity position of the Company, which proves its credit worthiness.
Explanation:
I have prepared the Cash Flow Statement using the Direct Method in terms of IAS 7.
Cash Payments to Suppliers and Employees = ($66,500 + $20,500
= $87,000
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The _________ interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR). If the compounding periods for different securities is the same, then you _______ use the APR for comparison. If the securities have different compounding periods, then the Iper must be used for comparison.
Answer:
*Nominal Interest Rate
*Can
*EAR
*Annual
*Higher
Explanation:
Here is the complete question;
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The__________ interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR). If the compounding periods for different securities is the same, then you____________ use the APR for comparison. If the securities have different compounding periods, then the____________ must be used for comparison. Here, M is the number of compounding periods per year and INOM/M is equal to the periodic rate (IPER). If a loan or investment uses___________ compounding, then the nominal interest rate is also its effective annual rate. However, if compounding occurs more than once a year, EAR is___________ INOM. Quantitative Problem: Bank 1 lends funds at a nominal rate of 6% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal interest rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.__________ %
Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The____Nominal______ interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate (APR). If the compounding periods for different securities is the same, then you_____can_______ use the APR for comparison. If the securities have different compounding periods, then the_______EAR_____ must be used for comparison. Here, M is the number of compounding periods per year and INOM/M is equal to the periodic rate (IPER). If a loan or investment uses____annual______ compounding, then the nominal interest rate is also its effective annual rate. However, if compounding occurs more than once a year, EAR is______higher_____ INOM. Quantitative Problem: Bank 1 lends funds at a nominal rate of 6% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal interest rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.__________ %
CALCULATION PART
what nominal interest rate will they charge their customers?
Effective annual rate= (1+nominal rate/n)^n -1)
n= compounding period
Effective annual rate=[(1+0.06/2)^2 -1]
[(1+0.06/2)^2 -1]
= (1+0.03)^2 -1
=1.0609-1
=0.0609
= 6.09%
They will charge it 6.09%
There are four quarter in a year which means n=4
Let the nominal rate = x
Using the effective annual rate formula
0.0609=[ (1+x/4)^4 -1]
0.0609+1= (1+x/4)^4
(1.0609)^1/4 = 1+x/4
1.01489= 1+x/4
1.01489-1= x/4
x= 0.01489×4
x= 0.05956×100
x= 5.956%
Hence, effective annual rate for the both banks is 6.09%
While nominal annual rate for bank2 is 5.956%
,
You borrow $14,500 to buy a car. The terms of the loan call for monthly payments for 6 years at a 6.9 percent rate of interest. What is the amount of each payment
Answer:
$246.51
Explanation:
Use the Time Value of Money Techniques to find the Monthly Payments (PMT)
Pv = $14,500
N = 6 × 12 = 72
P/yr = 12
i = 6.9%
FV = $0
Pmt = ?
Using a financial calculator to input the data as above, the Monthly Payments (PMT) are $246.51
When she was in college, Kiersten Walburg wrote a case study on Grokster, an online peer-to-peer (P2P) file-sharing network, and knew that it was shut down because its services were illegal. Several years later, Montgomery Records, Inc., which owned the copyrights to a large number of music recordings, discovered that "tereastarr", a user name associated with Walburg's Internet protocol address, had made twenty-four songs available for distribution on another P2P network. Montgomery notified Walburg that she had been identified as engaging in the unauthorized trading of music. She replaced the hard drive on her computer with a new drive that did not contain the songs in dispute. Is Walburg liable for copyright infringement?
1. Making material available on a P2P network or through the cloud is called Select (file-sharing/ obtaining copyright protection)
2. Is file-sharing always prohibited? Select (Yes/ No)
3. File sharing is prohibited Select (when it is used to download and store copyrighted music/when it is used to listen to music)
4. Under the Digital Millennium Copyright Act, a person who file-shares Select (can/ cannot) use the fair use doctrine to justify the file-sharing.
5. Montgomery notified Walburg that she had been identified as engaging in the unauthorized trading of music. She replaced the hard drive on her computer with a new drive that did not contain the songs in dispute. Walburg Select (can/ cannot) remedy her wrongful conduct by replacing her hard drive?
6. Why or why not? The illegal file sharing Select (was/ was not) already done.
7. Who is an innocent infringer? A person who Select (is/ is not) aware and had no reason to believe that his or her acts constituted copyright infringement.
8. Walburg likely Select (was/ was not) an innocent infringer.
9. Why? She had written a case study on Napster and knew file sharing was Select (right/ wrong)
10. It is Select (likely/ not likely) that Walburg replaced her hard drive to conceal her acts.
11. If that is true, Walburg's act of replacing her hard drive Select (was / was not) ethical.
12. If Walburg did commit an illegal act in sharing copyrighted material without earning a profit, she Select (can/ can not) face criminal sanctions
13. A court likely Select (would/ would not) find Walburg liable for copyright infringement.
Answer:
File-Sharing and Copyrights
1. Making material available on a P2P network or through the cloud is called Select (file-sharing/ obtaining copyright protection) .
2. Is file-sharing always prohibited? Select (Yes/ No) .
3. File sharing is prohibited Select (when it is used to download and store copyrighted music/when it is used to listen to music) .
4. Under the Digital Millennium Copyright Act, a person who file-shares Select (can/ cannot) use the fair use doctrine to justify the file-sharing.
5. Montgomery notified Walburg that she had been identified as engaging in the unauthorized trading of music. She replaced the hard drive on her computer with a new drive that did not contain the songs in dispute. Walburg Select (can/ cannot) remedy her wrongful conduct by replacing her hard drive?
6. Why or why not? The illegal file sharing Select (was/ was not) already done.
7. Who is an innocent infringer? A person who Select (is/ is not) aware and had no reason to believe that his or her acts constituted copyright infringement.
8. Walburg likely Select (was/ was not) an innocent infringer.
9. Why? She had written a case study on Napster and knew file sharing was Select (right/ wrong) .
10. It is Select (likely/ not likely) that Walburg replaced her hard drive to conceal her acts.
11. If that is true, Walburg's act of replacing her hard drive Select (was / was not) ethical.
12. If Walburg did commit an illegal act in sharing copyrighted material without earning a profit, she Select (can/ can not) face criminal sanctions .
13. A court likely Select (would/ would not) find Walburg liable for copyright infringement.
Explanation:
Copyright infringement is like plagiarism. It is the wrongful use of another person's copyrighted works or words, as if they were their own and without obtaining copyright permission from the copyright owner. It is illegal while plagiarism is unethical.
• One-pound baby carrots, $0.99
Two pounds baby carrots, $1.89
One-pound full-sized carrots, $0.68
What is the price per pound for each
Answer:
The price for the one-pound baby carrots will be the same, because it's one pound: $0.99
The price for the two pounds of baby carrots will be $0.945 (rounded to $0.95)
And for the one-pound full-sized carrots, still $0.68, because it is one pound.
Answer:
$0.99
Explanation:
Food handlers with facial hair must
Answer:Food handlers with facial hair should also wear a beard restraint. - aprons; remove aprons when leaving prep area. Never wipe your hands on your apron. - jewelry; do not wear rings (except for a plain band), bracelets, including medical bracelets and watches.
Explanation: because hair might get on their food and they can get a complain or something else
Brace Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,600 hours. At the end of the year, actual direct labor-hours for the year were 20,400 hours, the actual manufacturing overhead for the year was $506,920, and manufacturing overhead for the year was underapplied by $23,440. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:_________
A. $501,920
B. $531,445
C. $483,480
D. $511,920
Answer:
D. $511,920
Explanation:
For determining the estimated manufaturing overhead first determined the predetermined overhead which is shown below:
= (Actual manufacturing overhead - underapplied overhead) ÷ (actual direct labor hours)
= ($506,920 - $23,440) ÷ (20,400 hours)
= $23.7
Now the estimated manufacturing overhead is
= $23.7 × 21,600 hours
= $511,920
Estella Osage publishes an online travel magazine. In need ofcash, the business applies for a loan with National Bank. The bank requires borrowers to submit financial statements. With little knowledge of accounting, Estella Osage, the owner, does not know how to proceed.The explanations for how to prepare each statementRequirements:1. What are the four financial statements that the business will need to prepare?2. Is there a specific order in which the financial statements must be prepared?3. Explain how to prepare each statement.Requirements 1, 2, and 3. What are the four financial statements that the business will need to prepare? Is there a specific order in which the financial statements must beprepared? Explain how to prepare each statementIn the first column, select the four financial statements that the business will need to prepare. In the second column, select the number corresponding with the order the financial statements must be prepared. If there is no specific order, select "n/a" for each statement. In the third column, select the letter grouping that corresponds with the proper explanations for how to prepare each statement.1. Financial statement 2. Order 3. How to preparea. Each asset account is listed separately and then totaled. Cash is always listed first.b. Each dollar amount is calculated by evaluating the cash column on the transaction detail.c. Each expense account is listed separately from largest to smallest and then subtotaled if necessary.d. Financing activities include cash contributions by the owner and owner withdrawals of cash.e. Investing activities include the purchase and sale of land and equipment.f. Liabilities are listed separately and then totaled. Liabilities that are to be paid first are listed first.g. Net income is calculated as total revenues minus total expenses.h. Operating activities involve cash receipts for services provided and cash payments for expenses paid.i. The beginning capital is listed first and will always be the ending capital from the previous time period.j. The ending cash balance must match the cash balance on the balance sheet.k. The header includes the name of the business, the title of thestatement, and the date, listed as a period of time. l. The header includes the name of the business, the title of thestatement, and the date, listed as a specific date.m. The owner's contribution and net income are added to the beginning capital.n. The owner's equity is taken directly from the statement ofowner's equity.o. The owner's withdrawals are subtracted from capital. If there had been a netloss, this would also be subtracted.p. The revenue accounts are always listed first and then subtotaled if necessary.q. This statement must always balance. Assets = Liabilities + Equity
Answer:
1. The four financial statements are;
Income StatementStockholder's Equity statementBalance SheetStatement of Cashflows2. The specific order is done as follows because information from the preceding statement will be needed for the next one.
Income Statement ⇒ Stockholder's Equity statement ⇒ Balance Sheet ⇒ Statement of Cashflows
3. Income Statement
c. Each expense account is listed separately from largest to smallest and then subtotaled if necessary.g. Net income is calculated as total revenues minus total expenses.k. The header includes the name of the business, the title of thestatement, and the date, listed as a period of time.p. The revenue accounts are always listed first and then subtotaled if necessary.Stockholder's Equity
i. The beginning capital is listed first and will always be the ending capital from the previous time periodk. The header includes the name of the business, the title of thestatement, and the date, listed as a period of time.m. The owner's contribution and net income are added to the beginning capital.o. The owner's withdrawals are subtracted from capital. If there had been a netloss, this would also be subtracted.Balance Sheet
a. Each asset account is listed separately and then totaled. Cash is always listed first.f. Liabilities are listed separately and then totaled. Liabilities that are to be paid first are listed first.l. The header includes the name of the business, the title of thestatement, and the date, listed as a specific daten. The owner's equity is taken directly from the statement ofowner's equity.q. This statement must always balance. Assets = Liabilities + EquityStatement of Cashflows
b. Each dollar amount is calculated by evaluating the cash column on the transaction detail.d. Financing activities include cash contributions by the owner and owner withdrawals of cash. e. Investing activities include the purchase and sale of land and equipment.h. Operating activities involve cash receipts for services provided and cash payments for expenses paid.j. The ending cash balance must match the cash balance on the balance sheet.k. The header includes the name of the business, the title of thestatement, and the date, listed as a period of time.Additionally, a $57 check written and recorded by the company correctly, was recorded by the bank as a $75 deduction. The adjusted cash balance per the bank records should be:
Answer: $32,744
Explanation:
To find out the balance as per the bank records;
= Unadjusted book balance + Deposits in transit + error in bank record - Outstanding checks
= 30,361 + 3,850 + (75 - 57) - 1,485
= $32,744
Match the items.The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives.a. Showrooming: pricing in one store & while still there using mobile to purchase onlineb. Marketplace Fairness Act of 2013-- specifies how online retailers collect sales taxc. Best Buy introduced price matching even for online offers to promote instore purchased. E-commerce, up 13% year, while mobile commerce is growing at twice that ratee. Vendor Flex places Amazon employees at suppliers warehouses to lower shipping costsf. 80% of new phone purchases are smartphones allowing online shoppingg. Amazon spent $14B building warehouse bigger & closer to customers1. Immediate Environment: COMPANY2. Immediate Environment: COMPETITOR3. Immediate Environment: COLLABORATORS4. Macro Environment: Political/Regulatory/Legal5. Macro Environment: Economic6. Macro Environment: Social/cultural7. Macro Environment: Technological
Answer:
1. Immediate Environment: COMPANY - g. Amazon spent $14B building warehouse bigger & closer to customers
These are actions that in which the company deals within itself.
2. Immediate Environment: COMPETITOR - c. Best Buy introduced price matching even for online offers to promote instore purchased.
These are actions relating to competitors in the market.
3. Immediate Environment: COLLABORATORS - e. Vendor Flex places Amazon employees at suppliers warehouses to lower shipping costs.
These are actions between a few companies in a less in a market working together.
4. Macro Environment: Political/Regulatory/Legal - b. Marketplace Fairness Act of 2013-- specifies how online retailers collect sales tax.
At Macro level this reflects actions by the Government meant to govern the industry.
5. Macro Environment: Economic - d. E-commerce, up 13% year, while mobile commerce is growing at twice that rate.
This refers to the general economy and how it is moving.
6. Macro Environment: Social/cultural - a. Showrooming: pricing in one store & while still there using mobile to purchase online.
Refers to Socio-cultural actions that are widespread in the society or not unique to individual entities such as Showrooming.
7. Macro Environment: Technological - f. 80% of new phone purchases are smartphones allowing online shopping.
This describes the general actions of the society in relations to technological improvements or advancements.
what are the factors that influence management
Answer:
hope it helps..
Explanation:
Factors influencing changes in strategic management may be internal or external to the business organization. Some of these factors include management functions, structural transformations, competition, socio-economic factors, laws and technology.
Answer: Factors influencing changes in strategic management may be internal or external to the business organization. Some of these factors include management functions, structural transformations, competition, socio-economic factors, laws and technology.
Explanation:
The explanation is that these are factors influencing changes strategically that are internal or external rather.
is a specialty popcorn store. It offers two varieties of popcorn: plain and flavored. The flavors range from Caramel Popcorn to Dark Chocolate Drizzled Popcorn to White Cheddar Popcorn. The plain popcorn sells for per box and costs per box to make. The flavored popcorn sells for per box and costs per box to make. has fixed costs per month of . sells 1 box of plain popcorn for every 4 boxes of flavored popcorn. How many boxes of plain popcorn and how many boxes of flavored popcorn must sell each month to break even?
Answer:
The numbers are missing, so I looked for a similar question (see image):
first we must calculate the contribution margin:
plain popcorn = selling price - variable costs = $2 - $0.80 = $1.20
flavored popcorn = selling price - variable costs = $4 - $2.50 = $1.50
sales mix = 1 plain : 4 flavored
weighted contribution margin = [$1.20 + (4 x $1.50)] / 5 = $1.44
total fixed costs = $3,240
break even point in units = $3,240 / $1.44 = 2,250 units
the company must sell 2,250 x 1/5 = 450 plain popcorn boxes and 1,850 flavored popcorn boxes in order to break even
Gold Company was experiencing financial difficulties, but was not bankrupt or insolvent. The National Bank, which held a mortgage on other real estate owned by Gold, reduced the principal from $110,000 to $85,000. The bank had made the loan to Gold when it purchased the real estate from Silver, Inc. Pink, Inc., the holder of a mortgage on Gold’s building, agreed to accept $40,000 in full payment of the $55,000 due. Pink had sold the building to Gold for $150,000 that was to be paid in installments over 8 years. As a result of the above, Gold must:____________
a. Include $40,000 in gross income.
b. Reduce the basis in its assets by $40,000.
c. Include $25,000 in gross income and reduce its basis in its assets by $15,000.
d. Include $15,000 in gross income and reduce its basis in the building by $25,000.
e. None of these.
Answer:
c. Include $25,000 in gross income and reduce its basis in its assets by $15,000.
Explanation:
The computation is shown below:
Decrease by Bank
= $110000 - $85000
= $25,000
The same amount i.e. $25,000 would be involved in the gross income
And, the reduction in mortgage is
= $55000 - $40000
= $15,000
It redued the building or assets basis
hence, the correct option is c. and the same is to be considered
Money, Inc., has no debt outstanding and a total market value of $200,000. Earnings before interest and taxes, EBIT, are projected to be $26,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 12% higher. If there is a recession, then EBIT will be 25% lower. Money is considering a $65,000 debt issue with an interest rate of 6 percent. The proceeds will be used to repurchase shares of stock. There are currently 10,000 shares outstanding. Ignore taxes for this problem.a-1. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.)b-1. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
Answer and Explanation:
Answer and explanation attached
An operation that closes due to an imminent health hazard can reopen only after getting approval from what agency?
Answer:
the FDA (U.S. Food and Drug Administration)
Explanation:
The Food and Drug Administration is a federal agency, which is allowed under US law to prevent an operation from going on if it determines that an imminent health hazard still exists.
However, according to the FDA food code, "if immediate corrective action is taken, there is no "Imminent Health Hazard," meaning the operation can get approval from the agency to reopen.
Imminent Health Hazard means threat to life due to some product, procedure, events which need to stopped immediately. After FDA approval, operation can be restarted.
What do you mean by Imminent Health Hazard?FDA Food Code describes Imminent Health Hazard as the product, procedure, events that can posses threat or danger to life and requires immediate actions or suspension of action to prevent the loss.
The FDA(U.S. Food and Drug Administration) is the agency which looks after the Imminent Health Hazard. So when operations are ceased due to health hazard and after taking corrective measures and when no hazards are left, operations can be reopened after prior approval of FDA.
Therefore, it can be said that after FDA approval, operations can be started.
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Does anyone know the answer to this management question?
Answer:
no
Explanation:i donnt remember how to do that
Pilot plus Pens is deciding when to replace its old machine. The old machine’s current salvage value is $2 million. Its current book value is $1 million. If not sold, the old machine will require maintenance costs of $400,000 at the end of the year, for the next five years. Depreciation on the old machine is $200,000 per year. At the end of five years, the old machine will have salvage value of $200,000 and a book value of $0. A replacement machine costs $3 million now and requires maintenance costs of $500,000 at the end of each year during its economic life of five years. At the end of five years, the new machine will have a salvage value of $500,000. It will be fully depreciated by the straight-line method. In five years, a replacement machine will cost $3,500,000. Pilot will need to purchase this machine regardless of what the choice it makes today. The corporate tax rate is 34% and the appropriate discount rate is 12%. The company is assumed to earn sufficient revenues to generate tax shields from depreciation. Should Pilot Plus replace the old machine now or at the end of five years? no excel and financial calculator, so please show the answer by hand written and how u get to the numbers
The company should replace the machinery now as the NPV of old machine is very less as compared to new machine.
What do you mean by Salvage value?The estimated value of an item at the end of its useful life is known as salvage value.
Old machine Depreciation Cash flow PV of cash flow
0 2,200,000
1 (845,000) 112,000 (733,000) (678,704)
2 (845,000) 112,000 (733,000) (628,429)
3 (845,000) 112,000 (733,000) (581,879)
4 (845,000) 112,000 (733,000) (538,777)
5 (845,000) 112,000 120,000 (613,000) (417,197)
Total (2,844,986)
NPV (5,044,986)
[tex]Cash\ flow\ from\ depreciation = Depreciation * Tax rate[/tex]
[tex]PV\ of\ cash\ flow = Cash\ flow / (1 + i )x^{n} , \\where\ is\ 8\% \\n\ is\ no.\ of\ year.[/tex]
[tex]Capital\ gain\ tax\ on\ the\ sale\ for\ old\ machiner\y = Total\ salvage\ value\ of\ old\ machine\ - Book\ value[/tex][tex]Capital\ gain\ tax\ on\ the\ sale\ for\ old\ machinery = 2,200,000 - 1,400,000Capita\ gain\ tax\ on\ the\ sale\ for\ old\ machinery = $800,000[/tex]
[tex]Capital\ gain\ tax = 40\% * Capital\ gain\ tax\ on\ the\ sale\ for\ old\ machineryCapital\ gain\ tax = 40\% * 800,000Capital\ gain\ tax = 0.40 * 800,000Capital\ gain\ tax = $320,000[/tex]
[tex]Effective\ investment\ outlay\ = Cost\ of\ new \machinery - Actual\ cash\ inflow\ from\ sale\ of\ old\ machineryEffective\ investment\ outlay = 4,300,000 - 1,880,000Effective\ investment\ outlay = $2,420,000[/tex]
Therefore, The company should replace the machinery now as the NPV of old machine is very less as compared to new machine.
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Indicate what components of GDP (if any) each of the following transactions would affect.
Transaction Consumption Investment Government Net Exports
Purchases
You buy a new Toshiba computer
Ford manufactures a Focus and sells it to Avis, the car rental company
Dell sells a desktop computer from Its inventory to the Johnson family
Aunt Jane buys a new house from a local builder.
The federal government sends your grandmother a Social Security check.
Texas hires public mlddie school teachers
You pay a domestic plumber for fixing a leak in your bathroom.
Uncle Paul pays a domestic contractor for renovating hlis home Save & Continu Grade
It Now Continue without saving
Answer:
It will fall under Consumption if it is a commodity or non-capital good purchased.
It will fall under Investment if it is a capital good that was sold or purchased.
It will fall under Government Spending if the Government bought or paid for it.
It will fall under Net Exports if it involves the purchase of goods from another country or the sale of goods to another country.
You buy a new Toshiba computer - CONSUMPTION AND NET EXPORTS.
Toshiba is a Japanese Company.
Ford manufactures a Focus and sells it to Avis, the car rental company. INVESTMENT.
It becomes a capital good to Avis.
Dell sells a desktop computer from its inventory to the Johnson family . - CONSUMPTION and INVESTMENT.
The Desktop is considered a capital good as it can be an investment by the family to produce goods or services.
Aunt Jane buys a new house from a local builder. INVESTMENT
Housing is a capital good.
The federal government sends your grandmother a Social Security check. - TRANSFER PAYMENT which means it is not to be included in GDP.
Texas hires public middle school teachers . - GOVERNMENT SPENDING.
Texas will be spending to pay teacher's salaries.
You pay a domestic plumber for fixing a leak in your bathroom. - CONSUMPTION.
Uncle Paul pays a domestic contractor for renovating his home - CONSUMPTION.
This is housing but it involves buying goods to change the appearance of the house not buying the house itself.
You want to buy a house that costs $140,000. You have $14,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $126,000. However, the realtor persuades the seller to take a $126,000 mortgage (called a seller take-back mortgage) at a rate of 5%, provided the loan is paid off in full in 3 years. You expect to inherit $140,000 in 3 years, but right now all you have is $14,000, and you can afford to make payments of no more than $22,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.)
Required:
a. If the loan was amortized over 3 years, how large would each annual payment be? Could you afford those payments?
b. If the loan was amortized over 30 years, what would each payment be? Could you afford those payments?
c. To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means that at the end of the third year, you would have to make the regular payment plus the remaining balance on the loan. What would the loan balance be at the end of Year 3, and what would the balloon payment be?
Answer:
Kindly check explanation
Explanation:
Given the following :
Cost of house = $140,000
Down payment = $14000
Take back mortgage = 126000 = PV
Rate (r) = 5%
Yearly payment one can afford = 22000
a. If the loan was amortized over 3 years, how large would each annual payment be? Could you afford those payments?
Number of period = 3
Using the relation:
PMT = r(PV) / 1 - (1 + r)^-n
PMT = 0.05(126000) / 1 - 1.05^-3
PMT = 6300 / (1-0.8638375)
PMT = 46,268.23
He won't be able to afford it, as the monthly payment is larger than the affordable amount of $22000
b. If the loan was amortized over 30 years, what would each payment be? Could you afford those payments?
PMT = r(PV) / 1 - (1 + r)^-n
PMT = 0.05(126000) / 1 - 1.05^-30
PMT = 6300 / (1-0.2313774)
PMT = 8196.48
He would be able to afford it, as the monthly payment is lower than the affordable amount of $22000
c. To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means that at the end of the third year, you would have to make the regular payment plus the remaining balance on the loan. What would the loan balance be at the end of Year 3, and what would the balloon payment be?
Present value of remaining balance after the 3rd year:
Present Value (PV) = PMT[(1 - (1 + r)^-n) / r]
Where
PMT = periodic payment = 8196.48
r = Interest rate = 5% = 0.05
n = number of periods = 30 - 3 = 27
PV = 8196.48[(1 - (1 + 0.05)^-27) / 0.05]
PV = 8196.48[(1 - (1. 05)^-27) / 0.05]
PV = 8196.48[0.7321516 / 0.05]
PV = 120,021.32
Balloon payment :
120,021.32 + 8196.48 = 128,217.80
a. The annual payment if the Mortgage was amortized over three years is $45,315.96 (Interest + Principal)
The Mortgage payments are not affordable because his affordability funds are limited to $22,000 annually.
Annual Amortization Schedule
Beginning Balance Interest Principal Ending Balance
1 $126,000.00 $5,393.36 $39,922.60 $86,077.35
2 $86,077.35 $3,350.86 $41,965.10 $44,112.18
3 $44,112.18 $1,203.81 $44,112.15 $0.00
b. The annual payment if the Mortgage was amortized over thirty years is $8,116.80 (Interest + Principal)
The Mortgage payments are now affordable with his affordability amount of $22,000 per year.
Annual Amortization Schedule for the first three years:
Beginning Balance Interest Principal Ending Balance
1 $126,000.00 $6,257.79 $1,859.01 $124,141.04
2 $124,141.04 $6,162.68 $1,954.12 $122,186.97
3 $122,186.97 $6,062.70 $2,054.10 $120,132.93
c. Payments made by the end of the third year were $5,867.07 with a balance of $120,132.93.
Data and Calculations:
Cost of house = $140,000
Down payment = $14,000
Mortgage value = $126,000($140,000 - $14,000)
Mortgage interest rate = 5%
Affordable annual payments = $22,000
Thus, the balloon payment is always based on an agreed percentage of the loan, which is not provided here.
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Your monthly mortgage payment on your house is $593.90. It is a 30 year mortgage at 7.8% compounded monthly. How much did you borrow
Answer:
The amount borrowed is $82,500
Explanation:
The computation of the amount borrowed is shown below:
But before that we do the following calculations
Total Periods is
= 30 × 12
= 360
Interest Rate = 7.8% ÷ 12 = 0.65%
Now
Amount Borrowed is
= $593.90 × (PVA $1 for 360 Periods at 0.65%)
= $593.90 × (138.913874 )
= $82,500
Hence the amount borrowed is $82,500
There is a natural progression from one statement to the next. The following boxes represent the four financial statements. The set of financial statements is prepared at the end of each accounting period to communicate information about the company’s operations during that period to its users. Use the selection lists to demonstrate your knowledge of the relationships between the statements. In the headings, you will need to select the appropriate statement name and time period.(Hint: Ask yourself if the statement covers a period of time or if it is a snapshot at a given point in time.) Then complete the blanks following the headings.)
Statement:
ABC Company This statement shows how profitable a company is. It is sometimes referred to as the profit and loss (P&L) statement.
This statement summarizes the_______ Which item from this financial statement appears on the next financial statement?
Answer:
Income Statement:
ABC Company This statement shows how profitable a company is. It is sometimes referred to as the profit and loss (P&L) statement.
This statement summarizes the_revenue and expenses______ .
Which item from this financial statement appears on the next financial statement?
Net Income
Explanation:
For instance, Company XYZ reports the Net Income (net profit) from the Income Statement to the Statement of Retained Earnings. This second financial statement shows the distribution of profits to Company XYZ's stockholders. From this second statement, the company takes an item known as the Retained Earnings to the next statement called the Balance Sheet (a snapshot of financial position). The last statement usually prepared as part of financial reporting is the Statement of Cash Flows, which classifies the financial (cash) activities of the business into three: Operating, Investing, and Financing activities. The Statement of Cash Flows shows the cash inflows and outflows during a period.
The purpose of a bond sinking fund is to: Multiple Choice accumulate funds needed to pay the tax liability on the bond proceeds. accumulate funds to pay the regular interest payments. hold the bond proceeds until the funds need disbursed. repay bonds early either through purchases or calls. repay bondholders from a trust fund if the issuer defaults.
Answer:
repay bonds early either through purchases or calls.
Explanation:
A bond sinking fund can be defined as a restricted asset containing money owned by a company and set aside to repay bonds early or pay off a debt.
The purpose of a bond sinking fund is to repay bonds early either through purchases or calls. It is usually reported in the balance sheet after the current assets section.
Also, a bond sinking fund when properly implemented through the process of making regular deposit, helps to provide security for bondholders.
The Saunders Investment Bank has the following financing outstanding.
Debt: 60,000 bonds with a coupon rate of 5.1 percent and a current price quote of 106.1; the bonds have 15 years to maturity and a par value of $1,000. 18,900 zero coupon bonds with a price quote of 21.6, 27 years until maturity, and a par value of $10,000. Both bonds have semiannual compounding.
Preferred stock: 155,000 shares of 2.9 percent preferred stock with a current price of $84 and a par value of $100.
Common stock: 2,300,000 shares of common stock; the current price is $92 and the beta of the stock is 1.20.
Market: The corporate tax rate is 25 percent, the market risk premium is 6.9 percent, and the risk-free rate is 3.5 percent.
Required:
What is the WACC for the company?
Answer:
11,73 %
Explanation:
WACC = Ke × (E/V) + Kd × (D/V) + Kp × (E/V)
Ke = Cost of Equity
= Return on Risk Free Security + Beta × Risk Premium
= 3.5 % + 1.20 × 6.9 %
= 11.78 %
E/V = Weight of Equity
= (2,300,000 × $92) ÷ (2,300,000 × $92 + 60,000 × $106.10 + 18,900 × $21.60 + 155,000 × $84)
= 0.91
Kd = Cost of Debt
Debt : 60,000 bonds
Pv = ($106.10)
Pmt = (5.10% × $1,000) ÷ 2 = $25.50
n = 15 × 2 = 30
Fv = $1,000
P/yr = 2
i = ?
Pre-tax cost = 48.66 %
After tax cost = 0.75 × 48.66 %
= 36.50%
DV = Weight of Debt
= (60,000 × $106.10) ÷ (2,300,000 × $92 + 60,000 × $106.10 + 18,900 × $21.60 + 155,000 × $84)
= 0.03
Debt : 18,900 zero coupon bonds
Pv = ($21.60)
Pmt = $0
n = 27 × 2 = 54
Fv = $10,000
P/yr = 2
i = ?
Pre-tax cost = 24,07 %
After tax cost = 0.75 × 24,07 %
= 18.05%
DV = Weight of Debt
= (18,900 × $21.60) ÷ (2,300,000 × $92 + 60,000 × $106.10 + 18,900 × $21.60 + 155,000 × $84)
= 0.002
Kp = Cost of Preference Share
Market Rate = (Return × Par Value) ÷ Current Price
= (2.90 % × $100) ÷ $84
= 0.03 %
P/V = Weight of Preference Shares
= (155,000 × $84) ÷ (2,300,000 × $92 + 60,000 × $106.10 + 18,900 × $21.60 + 155,000 × $84)
= 0.06
WACC = 11.78 % × 0.91 + 36.50% × 0.03 + 18.05% × 0.002 + 0.03 % × 0.06
= 11,73 %
Given the following information regarding an income producing property, determine the internal rate of return (IRR) using levered cash flows. Expected Holding Period: 5 years; 1ˢᵗ year Expected NOI: $89,100; 2ⁿᵈ year Expected NOI: $91,773; 3ʳᵈ year Expected NOI: $94,526; 4ᵗʰ year Expected NOI: $97,362; 5ᵗʰ year Expected NOI: $100,283; Debt Service in each of the next five years: $58,444; Current Market Value: $885,000; Required equity investment: $221,250; Net Sale Proceeds of Property at end of year 5: $974,700; Remaining Mortgage Balance at end of year 5: $631,026.A) 10.6%B) 12.2%C) 22.9%D) 33.4%
Question options:
A. 10.6%
B. 22.9%
C.33.4%
D.12.2%
Answer and Explanation:
Find attached
From a customer's perspective, what are the skills and qualifications that service employees in both large and small organizations must possess
Explanation:
Remember, we are told, "from a customer perspective." Therefore, here are some skills and qualifications needed:
Good human relations: this skill requires that the service employees be friendly, patient, kind, good listeners, etc.Ability to pass information clearly: This means that they should be able to offer assistance to their customers clearly.Time management: Customers want employees who are fast at what they do taking into consideration the customer's time, not sluggish people.Adequate knowledge of service: This means that they should be professionally qualified to deliver quality services.The mean value of land and buildings per acre from a sample of farms is $1400, with a standard deviation of $200. The data set has a bell-shaped distribution. Assume the number of farms in the sample is 74.
(a) Use the empirical rule to estimate the number of farms whose land and building values per acre are between $1200 and $1600.
(b) If 29 additional farms were sampled, about how many of these additional farms would you expect to have land and building values between $1200 per acre and $1600 per acre?
Answer:
The answer is below
Explanation:
The Empirical Rule (or 3 sigma rule) states that for a normal distribution (bell shaped distribution) 68% of the data falls within one standard deviation (μ ± σ), 95% percent within two standard deviations (μ ± 2σ), and 99.7% within three standard deviations from the mean (μ ± 3σ).
Given that the mean (μ) = $1400, standard deviation (σ) = $200
a) The percentage of data within one standard deviation = μ ± σ = (1400 ± 200) = (1200, 1600)
Hence 68% of the land are between $1200 and $1600.
Number of farms = 68% × number of sample = 0.68 × 74 = 50.23 ≈ 51 farms
b) For an additional 29 farms, the number of additional farms between $1200 per acre and $1600 per acre = 29 × 0.68 ≈ 20 farms
a)The land is between $1200 and $1600. The number of farms is 51, b. The number of additional farms between $1200 per acre and $1600 per acre is 20 farms.
According to the Empirical Rule (or 3 sigma rule), for a normal distribution (bell shaped distribution), 68% of the data falls within one standard deviation (ut o), 95% fall within two standard deviations (u 20), and 99.7% fall within three standard deviations (+30). Given that the mean () is $1400 and the standard deviation () is $200,
a) The percentage of data within one standard deviation=uo=(1400+ 200) (1200, 1600)
Hence 68% of the land are between $1200 and $1600. Number of farms- 68% x number of sample - 0.68 74 50.23 51 farms
b) For an additional 29 farms, the number of additional farms between $1200 per acre and $1600 per acre- 29 x 0.68 = 20 farms.
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Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $210 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $193,200, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $168 per 100 yards of XT rope.
1. Estimate Product XT's break-even point in terms of sales units and sale dollars.
2. Prepare a CVP chart for Product XT. Use 7,000 units (700,000 yards/100 maximum number of sales units on the horizontal axis of the graph, and $1,400,000 as the maximum dollar amount on the vertical axis.3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.
Answer:
1. Estimate Product XT's break-even point in terms of sales units and sale dollars.
break even point = $193,200 / ($210 - $168) = 4,600 package (each containing 100 yards)
break even point in $ = 4,600 x $210 = $966,000
2) attached graph
3) Income Statement
Revenue $966,000
Variable costs ($772,800)
Contribution margin $193,200
Fixed expenses ($193,200)
Operating income $0
Which idea forms the basis of double-entry accounting?
A. For every single transaction, at least two accounts will be
affected.
B. For every single transaction, only assets will be impacted.
C. The assets of a business equal the stockholders' equity.
O D. The stockholders' equity in a business must equal the liabilities.
Answer:
A. For every single transaction, at least two accounts will be
affected.
Explanation:
Double-entry accounting is a record-keeping method where a transaction is recorded in a minimum of two accounts. There is no upper ceiling on the actual number of accounts that may be used in a transaction.
Every account has two columns, with debits on the left and credit entries on the right. The aggregate of the debit entries must equal the result of all credit entries. If this happens, the transaction has balanced. If not, the transaction is "out of balance."
Tamarisk Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2022.
1. Purchased a 1-year insurance policy on June 1 for $1,980 cash.
2. Paid $6,760 on August 31 for 5 months’ rent in advance.
3. On September 4, received $3,780 cash in advance from a corporation to sponsor a game each month for a total of 9 months for the most improved students at a local school.
4. Signed a contract for cleaning services starting December 1 for $1,040 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.)
5. On December 5, received $1,560 in advance from a gaming club. Determined that on December 31, $495 of these games had not yet been played.
For each of the above transactions, prepare the adjusting journal entry that is required on December 31.
Answer:
Adjusting Journal Entry on December 31, 2021
S/N Accounts&Explanation Debit Credit
1. Insurance Expenses $1,155
($1,980*7/12)
Prepaid Insurance $1,155
2. Rent Expenses $5,408
($6,760*4/5)
Prepaid rent $5,408
3. Unearned service revenue $1,680
($3,780 *4/9)
Service revenue $1,680
4. Maintenance&repair Exp. $1,040
($2,080*1/2)
Prepaid cleaning $1,040
5. Unearned service earned $1,065
($1,560-$495)
Service earned $1,065