False , because the cost of capital is greater than the crossover rate, the NPV and IRR of X are greater than those of Y.
What is IRR?
The internal rate of return (IRR) is indeed a company's financial metric that is used to assess the profitability of investment opportunities. IRR is a discount rate in a discounted cash flow analysis that causes the present value (NPV) of all free cash flow to just be zero. The same formula is used in IRR calculations as in NPV calculations. Keep in mind that IRR is not the actual dollar value of the project. The annualized return is what brings this same net present value to zero. In general, the higher an investment's internal rate of return, the much more appealing it is. IRR is coherent across investment types and can therefore be used to rank multi-frequency investments or projects fairly.
If the cost of capital is less than the cross over rate (the rate at which both NPVs are equal), the NPV of X may be less than the NPV of Y, and thus X may be rejected. If the cost of capital is higher than the cross-over rate, the NPV of X may be greater than the NPV of Y, and thus X may be accepted.
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as consumer demand for new homes increases, lumber, concrete, and steel suppliers may experience an increase in demand for their products, which is an example of blank demand.
When the consumer demand for new homes increases, lumber, concrete, which makes a steel suppliers to experience an increase in demand for their products, this is an example of a derived demand.
What is a derived demand?Basically, in economics, a demand refers to the quantity of a good that consumers are willing and able to purchase at various prices during a given time.
Under the demand topic, a derived demand means the demand for a good or service that results from the demand for a different or related, good or service. It is mainly related to the demand placed on a product or service for its ability to acquire or produce another good or service.
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What does a company's customer service department do?
A.
Promote the company to new groups of potential customers.
B.
Interact with customers after they have purchased the product.
C.
Receive payments from customers and handle the company's money.
D.
Handle employee-related procedures.
What a company's customer service department do is: B. Interact with customers after they have purchased the product.
What is customer service?Customer service can be defined as the process of responding to customers inquires and developing a rapport with customers which in turn can help to increase a company customer base.
Customer service department must tend to often interact with their customers after a customer buy their product so as to know whether the customer is satisfy with the product and this can as well enables the customer to continue patronizing the company products.
Therefore what a company's customer service department do is: B. Interact with customers after they have purchased the product.
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question content area the average return for large-cap domestic stock funds over the three years 2009–2011 was 14.7%. assume the three-year returns were normally distributed across funds with a standard deviation of 4.7%. open spreadsheet what is the probability an individual large-cap domestic stock fund had a three-year return of at least 20% (to 4 decimals)? fill in the blank 2 what is the probability an individual large-cap domestic stock fund had a three-year return of 10% or less (to 4 decimals)? fill in the blank 3 how big does the return have to be to put a domestic stock fund in the top 10% for the three-year period (to 2 decimals)? fill in the blank 4 %
Using the normal distribution, it is found that:
There is a 0.1292 = 12.92% probability that an individual large-cap domestic stock fund had a three-year return of at least 20%.There is a 0.1587 = 15.87% probability that an individual large-cap domestic stock fund had a three-year return of 10% or less.To be in the top 10%, the return has to be of at least 20.72%.Normal Probability DistributionThe z-score of a measure X of a normally distributed variable that has mean represented by [tex]\mu[/tex] and standard deviation represented by [tex]\sigma[/tex] is given by the following rule:
[tex]Z = \frac{X - \mu}{\sigma}[/tex]
The z-score measures how many standard deviations the measure X is above or below the mean, depending if the z-score is positive or negative.From the z-score table, the p-value associated with the z-score is found, and it represents the percentile of the measure X.In the context of this problem, the mean and the standard deviation are given as follows:
[tex]\mu = 14.7, \sigma = 4.7[/tex]
For a return of at least 20%, the probability is one subtracted by the p-value of Z when X = 20, hence:
[tex]Z = \frac{X - \mu}{\sigma}[/tex]
Z = (20 - 14.7)/4.7
Z = 1.13
Z = 1.13 has a p-value of 0.8708
1 - 0.8708 = 0.1292.
For the return of 10% or less, the probability is the p-value of Z when X = 10, hence:
[tex]Z = \frac{X - \mu}{\sigma}[/tex]
Z = (10 - 14.7)/4.7
Z = -1
Z = -1 has a p-value of 0.1587.
To be in the top 10%, the return has to be of at least the 90th percentile, which is X when Z = 1.28, hence:
[tex]Z = \frac{X - \mu}{\sigma}[/tex]
1.28 = (X - 14.7)/4.7
X - 14.7 = 1.28 x 4.7
X = 20.72%.
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The rlx co. Just paid a dividend of $3. 20 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. If investors require a return of 10. 5 percent on the company’s stock, what is the current price? what will the price be in 3 years in 15 years?.
If the company just paid a dividend of $3.20 per share on its stock and the investors require a return of 10.5% on stock, then the current price is equal to $51.2. The price in 3 years will be $57.54 and the price in 15 years will be $92.15.
If the rlx company just paid a dividend of $3.20 per share on its stock, then the current price can be determined by using the following formula;
Current price = Dividend ÷ (return % - change %)
Dividend can be calculated as follows;
D = 3.20 (1+0.04) = 3.20 (1.04) = 3.328
Substituting this value in the above formula;
Current price = 3.328 ÷ (0.105 - 0.04)
Current price = 3.328 ÷ 0.065 = $51.2
Now we calculate the price in the 3 years as follows;
3.328 (1+0.04)^3 = 3.74
Price (3 years) = 3.74 ÷ (0.105 - 0.04)
Price (3 years) = 3.74 ÷ 0.065
Price (3 years) = $57.54
Similarly, we can determine the price in 15 years as follows;
3.328 (1 + 0.04)^15 = 5.99
Price (15 years) = 5.99 ÷ (0.105 - 0.04)
Price (15 years) = 5.99 ÷ 0.065
Price (15 years) = $92.15
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if a married couple with a long-term growth objective is considering a mutual fund, and they are concerned about the fund's annual expenses, they shou
If a married couple choosing a mutual fund has a long-term growth goal but is worried about the fund's annual fees, they should choose a common stock fund with a low portfolio turnover.
How much tax do you pay on withdrawals from mutual funds?Withdrawals are subject to ordinary income taxes, which may be greater than the preferential tax rates on long-term capital gains from the sale of assets in taxable accounts. Additionally, if they are made before turning age 5912, there may be a 10�deral tax penalty (barring certain exceptions).
What are the goals of mutual funds and what are their advantages?a range of investment goals: One benefit of investing in mutual funds is that you can achieve a variety of financial goals, such as income and capital growth. Debt mutual funds can provide you with income, whereas equity mutual funds can assist you in accumulating wealth through capital growth.
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a firm had sales revenue of $1 million last year. it spent $600,000 on labor, $150,000 on capital and $200,000 on materials. what was the firm’s accounting profit? group of answer choices $150,000 $100,000 $1 million $50,000
Answer:
Should be $50,000!
1,000,000 - 600,000 - 200,000 - 150,000 = 50,000
safeco inc. has no debt, and maintains a policy of holding $10 million in excess cash reserves, invested in risk-free treasury securities. if safeco pays a corporate tax rate of 21%, what is the cost of permanently maintaining this $10 million reserve? (hint: what is the present value of the additional taxes that safeco will pay?)
The cost of permanently maintaining the $10 million reserve that is the present value of the additional taxes that Safeco will pay is -$2.1 million.
The present value will remain negative as long as the interest rate remains positive. (Interest rates are without exception always positive).
It can be defined as the current value of future or upcoming cash flows of an investment.
The present value which in this problem represents the cost of permanently maintaining the $10 million reserve can be determined using the formula;
PV = Tc × D
Here,
D = -$10 million (negative debt)
Tc = 21% = 21 ÷ 100 = 0.21
PV = 0.21 (-10 million) = -2100000 = -2.1 million
This is the present value of the additional taxes that Safeco will pay.
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for journal entries 1 through 12, indicate the explanation that most closely describes it. you can use explanations more than once. to record receipt of unearned revenue. to record this period's earning of prior unearned revenue. to record payment of an accrued expense. to record receipt of an accrued revenue. to record an accrued expense. to record an accrued revenue. to record this period's use of a prepaid expense. to record payment of a prepaid expense. to record this period's depreciation expense.
Based on the journal entries numbered 1 through 12, the best explanations for the activity in the journal entry is:
To record this period's use of a prepaid expenseTo record payment of an accrued expenseTo record payment of a prepaid expenseTo record an accrued expenseTo record an accrued revenueTo record receipt of an accrued revenueTo record receipt of unearned revenueTo record receipt of an accrued revenueTo record this period's use of a prepaid expenseTo record an accrued expenseTo record this period's depreciation expenseTo record this period's earning of prior unearned revenueHow to explain journal entries?Journal entries are done to show the different transactions in a business. The explanations part of the journal entry shows why the accounts being debited are being debited, and why those being credited are credited.
When prepaid expenses are credited then it means that the expense have been recognized for the period. When cash is credited for salaries payable, then those salaries are being paid for. Cash credit for prepaid rent means that a payment is being made before it is due.
Salaries Payable being credited means that the company owes and accrued expense (salaries) and interest revenue credit records revenue to be accrued. Unearned professional fees are credited if a company receives revenue before earning it.
Prepaid rent is then credited if there is a need to recognize the prepaid rent in the current period and accumulated depreciation is credited when an asset is depreciated in the period.
The rest of the question is:
Journal Entries
Insurance Expense 1,900
Prepaid Insurance 1,900
Salaries Payable 3,900
Cash 3,900
Prepaid Rent 3,200
Cash 3,200
Salaries Expense 4,900
Salaries Payable 4,900
Interest Receivable 1,900
Interest Revenue 1,900
Cash 3,900
Accounts Receivable (from consulting) 3,900
Cash 5,900
Unearned Professional Fees 5,900
Cash 4,300
Interest Receivable 4,300
Rent Expense 8,000
Prepaid Rent 8,000
Interest Expense 6,300
Interest Payable 6,300
Depreciation Expense 1,300
Accumulated Depreciation 1,300
Unearned Professional Fees 1,900
Professional Fees Earned 1,900
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budgeted customer support cost for liton company is $100,000 for the year and budgeted technician miles is 1,000 per year. liton company’s customer support activity rate is $ per mile.
If the budgeted customer support cost for liton company is $100,000 for the year and budgeted technician miles is 1,000 per year. liton company’s customer support activity rate is $100 per mile.
Activity rate per mile
Using this formula
Activity rate per mile =Budgeted customer support cost / Budgeted technician miles
Let plug in the formula
Activity rate per mile = $100,000 / 1,000 miles per year
Activity rate per mile = $100
Therefore If the budgeted customer support cost for liton company is $100,000 for the year and budgeted technician miles is 1,000 per year. liton company’s customer support activity rate is $100 per mile.
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what are the arithmetic and geometric average returns (answer in that order.) for a stock with annual returns of 4 percent, 9 percent, −6 percent, and 18 percent? multiple choice 5.89 percent; 6.25 percent 6.25 percent; 5.89 percent 6.25 percent; 8.33 percent 8.33 percent; 5.89 percent 8.33 percent; 8.33 percent
The arithmetic average return is 6.25 percent and the geometric average return is 5.89 percent
What is the arithmetic and geometric average return?The arithmetic average return can be determined by adding the stock returns together and dividing it by the total annual returns that is provided.
Arithmetic average return = sum of returns / total number of returns
(4 + 9 - 6 + 18) / 4
= 25 / 4 = 6.25 percent
The geometric average return is used to determine the compound growth rate.
Geometric average return= [(1 + return) x (1 + return) x (1 + return) + (1 + return)]^(1/n) -
Where:
n = number of returns provided
[(1.04) x (1.09) x (0.94) x (1.18)]^(1/4) - 1 = 0.0589 = 5.89%
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what amount should be reported as "cash and cash equivalents"? prepare a classified balance sheet. do not show the components that add up to your answer in requirement 1, but rather show only the line "cash and cash equivalents."
The line item on the balance sheet that shows the value of a company's assets that are cash or can be instantly turned into cash is referred to as "cash and cash equivalents."
Bank accounts and marketable securities, or debt securities with maturities of fewer than 90 days, are examples of cash equivalents. The cash and equivalents do not include investments in liquid securities like stocks, bonds, and balance sheet. Such assets are omitted even though it is simple to convert them into cash (usually with a three-day settlement period). On the balance sheet, the assets are shown as the investments.
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the lanham act (also known as the trademark act) defines the use of a trademark, the process for obtaining a trademark, and the penalties associated with trademark infringement.
The Lanham act (also known as the trademark act) is used as a trademark, the penalties associated with trademark infringement, and the process for obtaining a trademark. So the statement above is true.
The Lanham Act (also known as the Trademark Act of 1946) can be defined as the federal statute that governs trademarks, service marks, and unfair competition. The Lanham Act was passed by Congress on July 5, 1946, and signed into law by President Harry Truman. The Lanham Act is named for Representative Fritz G. Lanham of Texas. It is protects intellectual property against such as trademark infringement, unfair competition, trademark dilution, and false advertising.
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according to the expectations theory of term structure, response - correct responses yield curves should be equally likely to slope downward as to slope upward. yield curves should be equally likely to slope downward as to slope upward. - correct when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future.
According to the expectations theory of the time system of interest rates, the yields on financial assets of varying adulthoods are primarily related to market expectations of future yields.
What exactly are structure theories?The expectations theory, market segmentation theory, and liquidity preference theory are three theories that attempt to explain the term structure of interest rates. Because the term structure is difficult to observe in the market, spot and forward are derived from the coupon curve.According to the term structure's expectations theory, the long-term interest rate is a weighted average of current and expected future short-term interest rates. If short-term interest rates are expected to remain constant in the future, the long rate will equal the short rate (plus a constant risk premium).Assume that the current bond market offers investors a two-year bond with a 20% interest rate and a one-year bond with an 18% interest rate. The expectations theory can be used to forecast the interest rate on a one-year bond in the future.
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Sven, a research analyst for ikea, wants to segment the home furnishings market in europe based on differences in core benefits customers seek, usage situations, brand loyalty, usage rates, and price sensitivity. Which segmentation approach would sven use?.
The segmentation approach used by Sven is needs-based segmentation strategy.
The best marketing of some product or services begins with a focus on segmentation. Different groups of customers have different needs and therefore the company or sales need to be targeted with a specific marketing plan. So that, segmentation is a vital component of any successful marketing strategy.
Segmentation can be approached in three main ways, there are firmographic, behavioral, and needs-based segmentation strategy.
Firmographic segmentation can be defined as a grouping customers by aspects such as age, gender, company size, industry vertical, income and location.
Behavioral segmentation can be defined as a strategy that takes things up a notch, identifying how customers act and grouping them this way.
Thirdly, a needs-based approach can be defined as the best and most effective way of segmenting customers that identify specific customer needs, allowing products and services, and also marketing communications.
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Answer each of the following questions.
1)If a 10% increase in price leads to a 40% decrease in quantity demanded, what is the value of price elasticity of demand? Show your work.
2)Which of the following will cause the demand for a good or service inelastic?
Having few substitutes
A longer time period
Being a luxury
Being a large share of the consumer's budget
3)If the price elasticity of demand is equal to 0.5, is demand elastic, inelastic, or unitary elastic?
4)Will a perfectly elastic supply curve be vertical, horizontal, or upward-sloping?
5)What price elasticity of supply will lead to a smaller increase in quantity when price changes— elastic, inelastic, or unitary elastic?
1. The value of price elasticity of demand if there's a 10% increase in price leads to a 40% decrease in quantity demanded is 4
2. The cause of the demand for a good or service inelastic is "Being a large share of the consumer's budget". option D
3. If the price elasticity of demand is equal to 0.5, is demand to be "inelastic".
4. The perfectly elastic supply curve is horizontal.
5. The price elasticity of supply which will lead to a smaller increase in quantity when price changes is inelastic.
How to calculate price elasticity of demandPrice elasticity of demand = % change in demand / % change in price
= 40% / 10%
= 0.4 / 0.1
= 4
Inelastic demand refers to a situation in which consumers demand for goods and services does have a proportional change with a change in price.
A perfectly elastic supply curve is the curve in which the supply curve is horizontal.
In conclusion, the price elasticity of demand is the best degree of responsiveness of demand to a change in price.
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For each situation, select one option from below that you think will help increase profit.
These are answers for the question to put on
1.Avoid extra payroll expenses.
2. Get the best rates on advertising.
3.Change the product you provide.
4. Use resources wisely.
5. Beat the competition.
6. Get the best rates on supplier purchases.
7. Eliminate some free services.
8. Increase worker efficiency.
Four important elements can contribute to profitability. Costs are coming down, turnover is going up, production is going up, and efficiency is going up.
Choose the option from the list below that you believe will help enhance profit for each circumstance.1. Limit additional payroll costs- Increase
2. Find the best advertising prices- Increase
3. Modify the offering you make- decrease
4. Make good use of resources- Increase
5. Outperform the opposition- Increase
6. Find the most affordable supplier prices- Increase
7. Discontinue a few free services - No effects
8. Boost personnel effectiveness- Increase
What does "profit" mean?Profit is the term used to describe the financial gain experienced when the revenue from a commercial activity exceeds the costs, costs, and taxes associated with maintaining that activity.
In accounting, a profit is an income that is given to the owner throughout a successful market producing process. Profitability, which is the owner's primary interest in the income-formation process of market production, is measured by profit. There are various profit metrics that are frequently used.
How are earnings raised?Profitability may be boosted in four important areas. Costs are being cut, turnover is rising, productivity is up, and efficiency is up. You can also diversify into new market segments or create brand-new goods or services.
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default means that a borrower will not make scheduled interest or principal payments, and it affects the market interest rate on a bond. the -select- the bond's risk of default, the higher the market rate. the average default risk premium varies over time, and it tends to get -select- when the economy is weaker and borrowers are more likely to have a hard time paying off their debts.
The higher the bond's risk of default, the higher the market rate. The average default risk premium varies over time, and it tends to get larger when the economy is weaker and borrowers are more likely to have a hard time paying off their debts.
What is a loan default?Most time, a loan default occurs when a borrower fails to pay back a debt according to the initial arrangement. In consumer loans case, this loan default means that successive payments have been missed over the course of weeks or months.
But fortunately, both the lenders & loan servicers usually allow a grace period before penalizing the borrower after missing one payment. In conclusion, such period between missing a loan payment and having the loan default is known as delinquency.
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a bank account currently has a balance of $7,400 dollars. if the initial deposit was made four years ago, and the interest rate is 5% apr compounded monthly, what was the initial deposit?
If the current balance is $7,400 and it is compounded monthly over 4 years, then the initial deposit was $6061.13
After t years, the amount of a principal if it is compounded n times a year is given by the future value formula:
FV = PV (1 + r/n)^(nt)
Where: r = annual interest rate
t = number of years.
From the problem:
n = 12
t = 4
Hence,
n.t = 12 . 4 = 48
r = 5%
r/n = 0.05/12 = 0.004167
FV = 7,400
Plug all the parameters into the formula:
7400 = PV (1 + 0.004167)⁴⁸
PV = 6061.13
Hence, the initial deposit was $6061.13
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49.the risk premium associated with a government loan:a)rises with national debt.b)is independent of national debt.c)falls with national debt.d)is unrelated to government bond ratings.
Sharp increases in the national debt are typically generated by tax cuts, stimulus plans, higher government expenditure, and less tax collection due to high unemployment.
How would the economy be impacted by a rise in the national debt?
Workers would have fewer tools at their disposal to do their jobs, which would lead to poorer productivity and, ultimately, lower earnings, if high levels of debt prevent private investments in capital goods.
What occurs when the country's debt increases?
The United States is viewed as a greater global credit risk when the level of the national debt rises. In times of increased international pressure, this may have an effect on the U.S.'s capacity to borrow money and put us at risk of being unable to fulfill our promises to our allies, particularly during times of war.
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zayn boards the big rock metro to ride downtown to his job. zayn gives his money to the driver and takes his seat. neither the driver nor zayn says anything. zayn and the bus driver: have an implied contract. have no contract. have an express contract. have a formal contract.
In the scenario where Zayn boards the metro to ride, gives his money to the driver and takes his seat whereas, neither the driver nor Zayn says anything, the act of acceptance between Zayn and the bus driver has created an implied contract.
What is an implied contract?Basically, a contract is divided into an expressed and implied contract. An implied contract is the one with an obligation that derives from actions or conduct of one or more parties in an agreement.
In most case, an implied contract has the same legal force as an express contract because both are contract that is voluntarily entered into and agreed on verbally or in writing by two or more parties.
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expense should be recorded to recognize the use of and benefit received from long-lived assets, such as equipment, during the accounting period. (enter one word per blank.)
Depreciation expense should be recorded to recognize the use of and benefit received from long-lived assets, such as equipment, during the accounting period. Companies are required by accounting regulations to depreciate these assets throughout the course of their useful lives.
As a result, the businesses must record accumulated depreciation, which is the total amount of depreciation expense recorded over an asset's lifetime. Expenses that are paid in cash and recorded as assets before they are utilized or consumed are known as accounting prepaid expenses. Once purchased, the cost of a long-lasting asset is typically amortized over the asset's anticipated useful life.
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world bank records indicate that in 2010, the total fertility rate in puerto rico was 1.6 and population size was 4,000,000. if the crude net migration rate was -1.0, then the best estimate of the population in 2012 is
The population in 2012 would be 3,960,000. The crude net migration rate is the number of people leaving the country per 1,000 people. This means that for every 1,000 people in Puerto Rico in 2010, 10 people left the country.
What is population?
A population is the entire set of individuals, if that group is a nation or a group of people who share a characteristic. A population in statistics is the group of people from whom a statistical sample is drawn for a study. As a result, any group of people who share a characteristic can be called a population. A sample can also refer to a statistically meaningful subset of a population, rather than the entire population. As a result, a statistical analysis of a sample must document the estimated standard deviation, or standard deviation, of its overall population results. Only a population-wide analysis had no standard error.
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the coordinated management of meaning (cmm) theory has a reputation of being a confusing mix of ideas that are hard to pin down because they're expressed in convoluted language.
'The coordinated management of meaning theory has a reputation of being a confusing mix of ideas that are hard to pin down because they're expressed in convoluted language.\
coordinated management helps us understand how individuals create, modulate, and manage meaning in their communication processes. In general, it refers to ``how individuals make rules for the creation and interpretation of meaning, and how those rules are intertwined in a conversation in which meaning is constantly adjusted''. Communication is seen as a flexible, open, and modifiable process that evolves in ongoing shared interactions that mutually enable movement, change, and evolving pathways. CMM embodies this vision, fostering interpersonal relationships and open conversation. It can be applied to multiple disciplines and social scenarios, across individuals or groups.
Against this background, the definition of coordinated management was a challenge. However, some commonly agreed CMM definitions are: It is a "multi-level structural theory in which rules describe movements or links between meaning and behavior between two interpersonal component systems".
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high step shoes had annual revenues of $199,000, expenses of $110,700, and paid dividends of $23,600 during the current year. the retained earnings account before closing had a balance of $311,000. the net income for the year is:
The net income for the year is: $88,300
Revenues $199,000 − Expenses $110,700 = Net Income $88,300
What is Net income?Net income is the amount earned by an individual or business after deducting costs, allowances, and taxes. In business, net income is the amount of money left over after deducting all expenses, such as salaries and wages, the cost of goods or raw materials, and taxes. \Gross refers to before taxes, while net refers to after taxes. Net income is the amount of money you receive in your bank account. To summarize, gross annual income is the amount of money spent on you by your employer in a given year. The annual net income is the total amount you received for the year (after tax deduction). For an accounting period, net income is defined as an entity's income less cost of goods sold, expenses, depreciation and amortization, interest, and taxes.To learn more about Net income, refer to:
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a(n) project does not rely on the acceptance or rejection of another project. multiple choice question. mutually exclusive co-dependent dependent independent
An independent project does not rely on the acceptance or rejection of another project.
A project that's not a part of or passionate about the other project. Thus, the funding of an associate degree freelance project doesn't depend upon another project receiving funding first. Independent (sometimes known as stand-alone) comes are any set of projects during which selecting one has no impact on our call to decide on another project from that set.
For example, McBurger Inc. might have subsequent capital budgeting projects to consider. the primary may be a new deep preparation system for his or her french fries. The distinction between reciprocally exclusive and independent events is: a mutually exclusive event will merely be outlined as a state of affairs once 2 events cannot occur at the same time whereas a freelance event happens once one event remains unaffected by the prevalence of the opposite event.
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the principle of substitution is most centrally used in appraisal: select one: a. in the income approach b. when the shape of the lot is irregular c. in the cost approach d. in the market data approach
The principle of substitution is most centrally used in appraisal in the cost approach.
What is the principle of substitution?
The principle of substitution states that the upper limit of value tends to be set by the cost of acquiring an equally desirable substitute, assuming no untimely delays. It is an economic term used in real estate. A wise investor will not pay no more for an income-producing property than it would cost to build or purchase a similar property.
The cost approach in appraisal uses the principle of substitution. When developing the cost approach, the appraiser considers both the direct cost and indirect cost of a building
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consider the following cash flows on two mutually exclusive projects for the bahamas recreation corporation. both projects require an annual return of 18 percent.
Based on the cash flows of the two mutually exclusive projects by the Bahamas Recreation Cooperation, the project that should be chosen based on the Net Present Value approach is the Deeper Fishing project.
How to use Net Present Value?The Net Present Value shows the present value of the cash inflows from a project less the present value of the cash outflows and initial investment.
The Net Present Value for the Deeper Fishing project is:
= -1,010,000 + 430,000 / 1.18 + 558,000 / 1.18² + 480,000 / 1.18³
= $47,296.51
The Net Present Value for New Submarine is:
= -1,970,000 + 1,020,000 / 1.18 + 860,000 / 1.18² + 870,000 / 1.18³
= $41,554.25
The company should therefore go with the Deeper Fishing project.
Rest of the question is:
Based on the NPV, which project should you choose?
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on september 1, kennedy company loaned $120,000, at 8% annual interest, to a customer. interest and principal will be collected when the loan matures one year from the issue date. assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that kennedy would need to make
Debit Interest Receivable, 3,360; credit Interest
Revenue, $3,360. ($112,000 0.09 4/12 = $3,360)
A contract between a lender and a borrower is the standard definition of credit. In addition, the term "credit" can refer to someone's or a company's creditworthiness or credit history. A credit in accounting could result in a drop in assets, a rise in liabilities, a reduction in costs, or a gain in income. Credit accounts come in three flavors: revolving, installment, and open. Revolving credit, one of the most popular forms of credit accounts, is a line of credit that you can borrow from at any time, but there is a ceiling, known as a credit limit, on how much can be spent at one time. If a bank account, for example, has a debit balance, that means that more money has been taken out of it than was initially paid in: His account had been debited due to these activities. debit.
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select all that apply a company with a high ratio of fixed costs: multiple select question. is more likely to experience a loss when sales are down than a company with mostly variable costs.
In most case, a company with a high ratio of fixed costs:
Is more likely to experience greater profits one sales are up in a company with mostly variable costs.is more likely to experience a loss when sales are down then I company with mostly variable costs.What Is a Fixed Cost?In accounting, a fixed cost means the cost that does not change with an increase/decrease in the number of goods or services produced or sold. This costs are expenses that have to be paid by a company while been independent of any specific business activities. It is always an indirect cost as they don't apply to a company's production of any goods or services.
In most case, a firm with a high proportion of fixed costs have high operating leverage. For instance, the firm that produce computer processors tend to make large investments in production facilities and equipment and therefore have a cost structure with high fixed costs..
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Why are wages and salaries generally determined by the market for labor?
According to maximum economics textbooks, our wages and salaries are decided similar to another price: with the aid of using deliver and call for. People deliver their labor, and organizations call for it, growing a marketplace for labor.
Many dealers and shoppers of exertions services. Consequently, salary and salaries are decided by the intersection of the call for exertions and the deliver for exertions. A curve displaying the one-of-a-kind portions of exertions employers are inclined to lease at one-of-a-kind salary quotes in a given time period, ceteris paribus.
Wages are determined via way of means of deliver and demand, however they may be encouraged via way of means of an extensive kind of factors, along with the price of dwelling in a selected area, the presence of a union and the present-day minimal wage.
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