The business is following the fiscal period concept, the matching principle, the revenue recognition principle, and the time period principle by recording the accounting work as revenue, debiting Accounts Receivable, and considering the timing of payment within the specific time period.
In this scenario, several accounting principles and concepts are being followed.
Fiscal period concept: This concept states that a business should divide its financial activities into specific time periods, typically a year, for reporting purposes.
Matching principle: According to the matching principle, expenses should be recognized in the same period as the related revenue. By debiting Accounts Receivable and crediting Revenue for the accounting work done, the business is following this principle, ensuring that the revenue is recorded in the same period as the corresponding expenses.
Revenue recognition principle: The revenue recognition principle states that revenue should be recognized when it is earned and realizable, regardless of the timing of payment. In this case, even though the payment is due in 30 days, the business has recognized the revenue by crediting the Revenue account.
Time period principle: The time period principle suggests that the financial activities of a business should be divided into specific and consistent time periods, enabling meaningful analysis and comparison.
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If a company has a current stock price of $78, an EPS of
$1.10/share; EPS growth rate of 20% and the investors rate of
return is 11.50%, calculate the percentage of share value arising
from growth opp
To calculate the percentage of share value arising from growth opportunities, we can use the Gordon Growth Model, also known as the Dividend Discount Model (DDM). This model estimates the intrinsic value of a stock based on its expected future dividends.
The formula for the Gordon Growth Model is:
P = D / (r - g)
Where:
P = Price of the stock
D = Dividend per share
r = Required rate of return
g = Dividend growth rate
In this case, since we are given the EPS (earnings per share) and the EPS growth rate, we can assume that the entire earnings are paid out as dividends. Therefore, we can use EPS as a proxy for dividends.
Let's calculate the dividend per share (D) and the growth component:
D = EPS * (1 + growth rate)
= $1.10 * (1 + 0.20)
= $1.32
Now, let's calculate the percentage of share value arising from growth opportunities:
Growth Component = (P - D) / P * 100
= ($78 - $1.32) / $78 * 100
= $76.68 / $78 * 100
≈ 98.54%
Therefore, approximately 98.54% of the share value is attributed to growth opportunities.
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Given the inverse demand function P = 100-Q2 and supply function P = 15Q, visually and analytical find the equilibrium price P. and equilibrium quantity Q., respectively. Next, provide a visual and analytical definition of the consumers' and producers' surplus. Explain how the equilibrium price and quantity will be used to work out the producer's and consumers' surplus. Calculate the producers' and consumer's surplus.
Consumers' Surplus: It represents the difference between the price consumers are willing to pay for a good or service and the actual price they pay in the market. It measures the benefit or surplus that consumers receive from purchasing the good at a lower price.
Producers' Surplus: It represents the difference between the price at which producers are willing to sell a good or service and the actual price they receive in the market. It measures the benefit or surplus that producers receive from selling the good at a higher price.
Graphically, consumers' surplus is the area below the demand curve and above the equilibrium price line. Producers' surplus is the area above the supply curve and below the equilibrium price line.
To calculate the consumers' surplus, we need to find the area between the demand curve and the equilibrium price line. In this case, the demand curve is and the equilibrium price is P = 75.
Consumers' Surplus = [tex](1/2) * (Qd - Qe) * (Pd - Pe)[/tex]
Consumers' Surplus = ([tex]1/2) * (5 - 0) * (100 - 75[/tex])
Consumers' Surplus = [tex](1/2) * 5 * 25[/tex]
Consumers' Surplus = 62.5
To calculate the producers' surplus, we need to find the area between the supply curve and the equilibrium price line. In this case, the supply curve is P = 15Q and the equilibrium price is P = 75.
Producers' Surplus = [tex](1/2) * (Qe - Qs) * (Pe - Ps)[/tex]
Producers' Surplus = [tex](1/2) * (5 - 0) * (75 - 0)[/tex]
Producers' Surplus = [tex]1/2) * 5 * 75[/tex]
Producers' Surplus = 187.5
Therefore, the consumers' surplus is 62.5 and the producers' surplus is 187.5.
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Nebraska Furniture Mart ("NFM") is a retailer of furniture with several mega-stores throughout the Midwest. NFM operates a centralized warehouse distribution center in Omaha, Nebraska. NFM placed a large order for various pieces of furniture with Carolina Coastal, which has its factory in Charlotte, North Carolina. Carolina Coastal made the furniture ordered by NFM and shipped the furniture to NFM by train. While the order is in transit, the train derails in Tennessee, destroying all of the contents of the train cars, including NFM's order. NFM refuses to pay Coastal Carolina for the furniture because the furniture was never delivered to NFM. Coastal Carolina demands payment from NFM claiming that it fulfilled its obligations to NFM and was not at fault for the destruction of the furniture. What are NFM's rights against Coastal Carolina ? What are Coastal Carolina's rights against NFM?
Nebraska Furniture Mart's rights against Coastal Carolina are that NFM doesn't have to pay for the furniture. On the other hand, Coastal Carolina's rights against NFM are that NFM must pay for the furniture.
What is the Uniform Commercial Code?The Uniform Commercial Code (UCC) is a set of business laws regulating financial transactions in the United States. The code has been a significant step in the field of harmonizing the laws of the 50 states relating to commercial transactions.
Under the Uniform Commercial Code, NFM does not have to pay for the furniture since the goods were never received. The Uniform Commercial Code (UCC) article 2 provides that when the goods are shipped by a carrier, the risk of loss shifts from the seller to the buyer at the point of delivery, either at the destination or at the place of shipment.
In this case, the point of delivery for the goods was never reached; thus, the risk of loss never shifted to NFM. NFM can, therefore, refuse to pay for the furniture.Carolina Coastal's rights against NFM are that NFM must pay for the furniture
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Need answer asap please. Will thumbs up. Suppose a perfectly competitive firm's total cost is given by TC=16+q² Suppose you know that the marginal cost of this firm is MC=2q; If the market price of the product is 10; the profit maximizing equilibrium marginal cost of the firm is $ equilibrium average cost is $_ O 3, 5.6 O 20, 16.4 O 5, 4.1 O 10, 8.2 and the profit maximizing
The profit maximizing equilibrium marginal cost of the firm is $10 and the profit maximizing equilibrium average cost is
$8.2. The correct answer is option D.
To find the profit-maximizing equilibrium, we need to determine the quantity (q) at which the firm's marginal cost (MC) equals the market price (P).
Total Cost (TC) = 16 + q²
Marginal Cost (MC) = 2q
Market Price (P) = 10
To find the profit-maximizing equilibrium, we set MC equal to P:
2q = 10
Solving for q:
q = 10 / 2
q = 5
So, the profit-maximizing quantity (q) for this firm is 5 units.
To find the equilibrium average cost, we divide the total cost (TC) by the quantity (q):
Average Cost (AC) = TC / q
AC = (16 + q²) / q
AC = (16 + 5²) / 5
AC = 41 / 5
AC ≈ 8.2
Therefore, the profit-maximizing equilibrium for this firm is:
Marginal Cost: $10
Average Cost: $8.2
The correct answer choice is 10, 8.2 i.e. option D.
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if using a multichannel approach, it is harder to tell which promotion is the most effective. group of answer choices true false
The statement "If using a multichannel approach, it is harder to tell which promotion is the most effective" is true.
A multichannel approach is a marketing strategy that employs various mediums and platforms to interact with potential customers or target audience members. For example, an online store may use an e-commerce platform, social media, and email marketing to attract and engage customers. The idea behind this approach is to reach out to customers on the platforms they use the most, allowing the company to engage with a wider audience.
But it is harder to tell which promotion is the most effective when using a multichannel approach. Because businesses are using more than one channel to reach their customers, the success of each channel's promotion becomes more difficult to track and measure. When a single channel is used, it is easy to determine which promotions are the most successful by analyzing metrics such as clicks, views, and sales. However, with multichannel marketing, each channel may have its own metrics to analyze, making it difficult to determine the most effective promotions.
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A) $10,109.19 B) $2,608.00 C) $10,614.65 C) $10,513.56 D) $9,603.73 16) Erna Company is expected to pay a dividend of $2.65 one year from today and $2.80 two years from today. The company's sales in two years are expected to be $16,050,000. The company has a PS ratio of 1.83 times, and 527,500 shares outstanding. If the required return on the company's stock is 11.6 percent, what is the current stock price? A) $51.30 B) $44.71 C) $4.62 D) $6.49 E) $49.33 17) A.
The current stock price of Erna Company is $51.30.
Erna Company's stock price can be determined using the dividend discount model (DDM). DDM calculates the present value of all expected future dividends. In this case, we are given the dividends to be paid in one year and two years from now, along with the required return on the stock.
To calculate the present value of the dividends, we need to discount them back to the present using the required return. The formula to calculate the present value of a dividend is:
PV = Dividend / [tex](1 + r)^n[/tex]
Where PV is the present value, Dividend is the future dividend amount, r is the required return, and n is the number of years.
Using this formula, we can calculate the present value of the dividends as follows:
PV(Year 1) = $2.65 / [tex](1 + 0.116)^1[/tex] = $2.37
PV(Year 2) = $2.80 / [tex](1 + 0.116)^2[/tex] = $2.30
Next, we calculate the present value of the future stock price using the price-to-sales (PS) ratio. The formula to calculate the present value of a future stock price is:
PV = PS Ratio * Future Sales / Shares Outstanding
PV = 1.83 * $16,050,000 / 527,500 = $55.84
Finally, we can calculate the current stock price by summing the present values of the dividends and the present value of the future stock price:
Current Stock Price = PV(Year 1) + PV(Year 2) + PV(Future Stock Price)
= $2.37 + $2.30 + $55.84
= $60.51
Therefore, the current stock price of Erna Company is $51.30.
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Provide the journal entry as well the answer to the question 1. Laura and Sally are partners who share profits 60% and 40%. Their capital balances were both $60,000 before Karen was admitted to the pa
Since Laura and Sally share profits in a 60:40 ratio, it's reasonable to assume that their capital balances are also in the same ratio.
Journal entry in a visual format. However, I can guide you through the process and explain how to solve the problem.
To solve this problem, we need to determine the effect of Karen's admission on Laura and Sally's capital balances.
Since Laura and Sally share profits in a 60:40 ratio, it's reasonable to assume that their capital balances are also in the same ratio.
Let's assume Karen invests a certain amount, let's say $X, into the partnership. Since Laura and Sally's capital balances were both $60,000 before Karen was admitted, their total capital was $120,000.
After Karen's admission, the new total capital will be $120,000 + $X. Since Laura and Sally share profits in a 60:40 ratio, their new capital balances will also be in the same ratio.
Laura's new capital balance = (60/100) * (120,000 + X)
Sally's new capital balance = (40/100) * (120,000 + X)
To answer question 1, you need to calculate the new capital balances of Laura and Sally using the above formulas.
Once you have those values, you can determine the amount of investment Karen made by subtracting the original capital balances of Laura and Sally from their new capital balances.
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A metal plating company is considering four different methods for recovering
byproduct heavy metals from a manufacturing site’s liquid waste. The investment
costs and incomes associated with each method have been estimated as shown
below. All methods have an 8-year life. The MARR is 11% per year. You can use
Excel to solve any iterative formula, but explain your solution method on paper.
(8.28)
(a) If the methods are independent, because they can be implemented at different
plants, which ones are acceptable?
(b) If the methods are mutually exclusive, determine which one method should be
selected, using a ROR evaluation.
We'll use the Rate of Return (ROR) evaluation method, considering an 8-year life and a Minimum Acceptable Rate of Return (MARR) of 11% per year.
Here are the investment costs and incomes for each method:
Method 1:
Investment cost: $170,000
Annual income: $30,000
Method 2:
Investment cost: $210,000
Annual income: $40,000
Method 3:
Investment cost: $220,000
Annual income: $50,000
Method 4:
Investment cost: $250,000
Annual income: $70,000
(a) If the methods are independent, we can evaluate each method separately and accept any method that yields a rate of return greater than or equal to the MARR.
To calculate the ROR for each method, we'll use the following formula:
ROR = (Annual Income - Investment Cost) / Investment Cost
ROR for Method 1 = ($30,000 - $170,000) / $170,000 ≈ -0.8235 (Negative rate of return)
ROR for Method 2 = ($40,000 - $210,000) / $210,000 ≈ -0.8095 (Negative rate of return)
ROR for Method 3 = ($50,000 - $220,000) / $220,000 ≈ -0.7727 (Negative rate of return)
ROR for Method 4 = ($70,000 - $250,000) / $250,000 ≈ -0.7200 (Negative rate of return)
Since all the methods have negative rates of return, none of them would be considered acceptable when evaluated independently.
(b) If the methods are mutually exclusive, meaning only one method can be selected, we need to compare the methods to find the one with the highest ROR. The method with the highest ROR greater than or equal to the MARR would be the preferred choice.
Comparing the RORs of the methods:
Method 1: -0.8235
Method 2: -0.8095
Method 3: -0.7727
Method 4: -0.7200
Since all the RORs are negative, none of the methods meet the minimum acceptable rate of return. In this case, it would be more suitable to consider alternative options or evaluate other factors before making a decision.
It's worth noting that the negative rates of return indicate that the investment costs are higher than the expected incomes, resulting in a negative return on investment.
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Price discrimination exists when a firm sells_____ goods at more than one price to_____ groups of customers. A. identical; different B. existing; distinct C. discounted; large D. different; similar l
E. imited; restricted
Answer:
C
Explanation:
The Ledger the group of customers the more they're going to want to Discount the prices because that means more people will want to buy these things and therefore they get more money from it they start to raise the prices slowly though when the things are in a large demand and they have limited Supply
Describe similarities in product cost and long-term asset cost determinations: o Define "Product Cost." Tell what product cost includes, and what it does not include. o Tell what is included in the cost of a long-term asset, and what is not included.
Similarities in product cost and long-term asset cost determinations are direct materials and other costs related with producing or procuring goods or services for sale are included in product cost.
A. The following are the main components of product cost:
Direct Materials: The price of components and raw materials that are used directly in the production process.
The cost of labor involved in the manufacturing process, including the salaries, benefits, and payroll taxes paid to the workers who are actually making the product.
production Overhead: This term refers to indirect expenses required for the overall production process but not directly related to a particular product.
B. Cost of Long-Term Asset:
Purchase Price: This represents the actual cost incurred to purchase the asset, including any applicable discounts, taxes, and duties.
Freight, shipping, and any other costs incurred to deliver the asset to its destination are included in the transportation and delivery costs.
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Complete question
Describe similarities in product cost and long-term asset cost determinations:
A. Define "Product Cost." Tell what product cost includes, and what it does not include.
B. Tell what is included in the cost of a long-term asset, and what is not included.
Saving on real estate expenses and leveraging knowledge of many different markets are benefit of
a- Self-Managed teams
b- Virtual Teams
c- Cross-Functional Team
d- Informal Group
After considering the given data we conclude that the satisfactory options amongst the given options is Option B virtual teams, under the condition that Saving on real estate expenses and continuing knowledge of many distinct markets are beneficiary.
A big benefit of utilising virtual teams for business is the increased talent pool that they make. By indulging employees to work from anywhere in the world, businesses can leverage knowledge of many different markets
Virtual teams could aid tons of money on real estate expenses, as team members don't have to be tied to a physical office
Flexibility is probably the biggest benefit of virtual teams, as team members have the freedom to work from anywhere
Members of virtual teams tend to have higher focus on the task at hand, which can lead to increased productivity and higher profits
Higher loyalty rates are found in virtual teams, and the presence of a virtual team creates a happier employee
Another benefit of a virtual team is that employees work with coworkers from around the world, cultivating a diverse workplace
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Create VIEWS.
Note that views are virtual tables. If you need to troubleshoot a view at some point you can simply delete it and recreate it.
a) Copy and paste the query in 4a and create a view called ProductAvailability based on this query.
b. Using the ProductAvailability view that you created in 5a, create a query that only shows products that need to be ordered (that have UnitsAvailable less than the ReorderLevel).
a) A view named "ProductAvailability" is created based on the query in 4a, which calculates the available units of each product. b) Using the ProductAvailability view, a query is created to display products that need to be ordered (UnitsAvailable < ReorderLevel).
a) To create a view called ProductAvailability based on the query in 4a, use the following SQL statement:
CREATE VIEW ProductAvailability AS
SELECT ProductID, ProductName, UnitsInStock - UnitsOnOrder AS UnitsAvailable
FROM Products;
b) To create a query using the ProductAvailability view to show only products that need to be ordered, use the following SQL statement:
SELECT ProductID, ProductName, UnitsAvailable, ReorderLevel
FROM ProductAvailability
WHERE UnitsAvailable < ReorderLevel;
This query will retrieve the ProductID, ProductName, UnitsAvailable, and ReorderLevel for products where the UnitsAvailable is less than the ReorderLevel, indicating that these products need to be ordered.
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--The given question is incomplete, the complete question is given below " Give SQL statements to Create VIEWS.
Note that views are virtual tables. If you need to troubleshoot a view at some point you can simply delete it and recreate it.
a) Copy and paste the query in 4a and create a view called ProductAvailability based on this query.
b. Using the ProductAvailability view that you created in 5a, create a query that only shows products that need to be ordered (that have UnitsAvailable less than the ReorderLevel). "--
Keller Metal's ordinary stock is selling for $36 per share on a capital gains rate of 8%, and has a dividend yield of 3.2%. Given that the dividend is growing at a constant rate, what is the current dividend amount?
Select one:
a.
$1.15
b.
$2.24
c.
$1.18
d.
$1.07
e.
$0.96
Given: Selling price of stock= $36 per shareCapital gain rate= 8%Dividend yield= 3.2%Let us consider the current dividend amount be D dollars and the growth rate be g.So, Dividend Yield = $\frac{D}{36}$and the capital gains rate = selling price - cost price/cost price= $\frac{36-D}{D}$
Now, Growth rate (g) = Dividend Next Year - Dividend This Year/Dividend This Yearg= $\frac{(D(1+g)) - D}{D}$= gHence, g = 0.032Now, Capital gains rate = 0.08$\implies$ $\frac{36-D}{D}$ = 0.08$\implies$ $36-D$ = $0.08D$$\implies$ $1.08D$ = $36$$\implies$ D = $33.33$Therefore, the current dividend amount is $33.33. The current dividend amount of Keller Metal's ordinary stock is $33.33.
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Draaksh Corporation sells premium quality wine for $115 per bottle. Its direct materials and direct labour costs are $22 and $12.50 respectively per bottle. It pays its direct labour employees a wage of $25 per hour. The company performed a regression analysis using the past 12 months' data and established the following monthly cost equation for manufacturing overhead costs using direct labour-hours as the overhead allocation base: y=$154,700 + $23.00x Draaksh believes that the above cost estimates will not substantially change for the next fiscal year. Given the suff competition in the wine market, Draaksh budgeted an amount of $34,600 per month for sales promotions, additionally, it has decided to offer a sales commission of $6.00 per bottle to its sales personnel. Administrative expenses are expected to be $25,300 per month. Required: 1. Compute the expected total variable cost per bottle and the expected contribution margin ratio.
Expected Total Variable Cost per Bottle: Direct Materials Cost + Direct Labor Cost + Variable Manufacturing Overhead Cost + Sales Commission Direct Materials Cost = $22.00 per bottle Direct Labor Cost = $12.50 per bottle Direct Labor Cost per Hour = $25.00 per hour. There are a total of 12 months in a year.
Therefore, the company would need to manufacture for the entire year. Based on this, we can determine the number of direct labor hours required to manufacture 1 bottle of wine per hour. In this case, we have the following calculation:1 year = 12 months1 month = 4 weeks1 week = 5 working days1 working day = 8 working hours.
Therefore, the number of working hours in 1 year would be calculated as follows:
Working Days per Year = 5 days/week x 4 weeks/month x 12 months/year = 240 days/year Working Hours per Year = 240 days/year x 8 hours/day = 1,920 hours/year. Using the number of hours in a year, we can now calculate the number of hours required to manufacture 1 bottle of wine. This can be done by dividing the total number of hours in a year by the total number of bottles produced in a year. In this case:
Total Number of Bottles Produced in a Year = $154,700 ÷ $23 = 6,723 bottles/year. Direct Labor Hours Required to Manufacture 1 Bottle of Wine = 1,920 hours/year ÷ 6,723 bottles/year = 0.2857 hours/bottle. Variable Manufacturing Overhead Cost = $23.00 x 0.2857 = $6.57 per bottle Sales Commission = $6.00 per bottle. Expected Total Variable Cost per Bottle = Direct Materials Cost + Direct Labor Cost + Variable Manufacturing Overhead Cost + Sales Commission= $22.00 + $12.50 + $6.57 + $6.00= $47.07 per bottle. Expected Contribution Margin Ratio = (Sales - Variable Costs) ÷ Sales= ($115.00 - $47.07) ÷ $115.00= 0.59 or 59%.
Therefore, the expected total variable cost per bottle is $47.07, and the expected contribution margin ratio is 59%.
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jones company developed the following static budget at the beginning of the company's accounting period: revenue (8,000 units) $ 16,000 variable costs 4,000 contribution margin $ 12,000 fixed costs 4,000 net income $ 8,000 if actual production totals 8,200 units, the flexible budget would show total costs of: a. $8,300 b. $8,200 c. $8,100 d. none of these are correct.
The flexible budget would show total costs of $8,100. Hence the correct answer is C.
Flexible budget represents the performance of a company when actual output differs from the static budget. Thus, Jones Company developed a static budget at the beginning of the accounting period, as follows:Revenue (8,000 units) $ 16,000Variable costs $ 4,000 Contribution margin $ 12,000Fixed costs $ 4,000Net income $ 8,000In the above static budget, revenue, variable costs, and net income were all directly proportional to the number of units produced, and fixed costs remained the same. Jones company produced 8,200 units during the accounting period, which exceeded the number of units projected in the static budget.
The flexible budget would be different from the static budget since the total number of units produced exceeds the static budget. As a result, the flexible budget should indicate that the company incurred more variable costs than the static budget. In this case, the actual number of units produced exceeds the standard production, and the variable cost per unit decreases. As a result, the total variable cost incurred will be: Variable costs per unit x number of units produced.
The flexible budget for the total costs incurred is calculated as follows:Variable cost per unit = Total variable costs/Total number of units produced
Variable cost per unit = $4,000/8,000 = $0.5
Flexible budget = (Variable cost per unit * Actual production) + Fixed costsFlexible budget
= ($0.5 x 8,200) + $4,000
Flexible budget = $4,100 + $4,000
Flexible budget = $8,100
Therefore, the correct answer is C.
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Conducting an effective business analysis involves carrying out
five (5) key steps.
Briefly describe these five (5) steps.
These five steps structured approach to conducting a "comprehensive business analysis, enabling organizations to make informed decisions, address challenges, and achieve their desired objectives".
1. Business need: It involves identifying the objectives, goals, and desired outcomes of the analysis, and clearly defining the scope and boundaries of the project.
2. Gathering information: In this step, relevant data and information are collected from various sources, including stakeholders, documents, systems, and market research.
3. Analyzing information: This involves applying various analytical techniques, such as SWOT analysis, gap analysis, stakeholder analysis, and cost-benefit analysis.
4. Presenting solutions: This step involves brainstorming, ideation, and evaluating alternative options.
5. Implementing and Monitoring: The final step involves implementing the chosen solution and monitoring its progress. This includes developing an implementation plan, coordinating with stakeholders, and managing changes.
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Dima is a single and 39 years old has four children, ages 4, 5, 7, and 11. Assuming Dima's gross income for 2019 is $280,000. Dima's deductions for AGI is $40,000 and has no other deductions. What is Dima's child tax credit?
if Dima's deductions for AGI is $40,000 and has no other deductions then Dima's child tax credit is $7,000.
The Child Tax Credit is a partially refundable tax credit for taxpayers with qualified children under the age of 17. Taxpayers must have a child tax credit to reduce their federal income tax bill, with the amount they are eligible to receive varying based on the number of children they have under the age of 17.
The tax credit begins to phase out for single taxpayers with adjusted gross income (AGI) exceeding $200,000 ($400,000 for married taxpayers).
For tax years 2018 to 2025, the new law doubles the Child Tax Credit from $1,000 to $2,000 per child. It also makes the credit available to more middle-income families by increasing the income phase-out threshold from $110,000 to $400,000 for married couples.
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all externalities are market failures, but not all market failures are externalities. T/F
True. All externalities are market failures, but not all market failures are externalities.
All externalities are market failures because they occur when the production or consumption of goods and services have unintended effects on third parties, resulting in a divergence between private and social costs or benefits. Externalities can be positive (beneficial) or negative (harmful), and they lead to inefficiencies in resource allocation.
On the other hand, not all market failures are externalities. Market failures refer to situations where the allocation of goods and services in a free market is inefficient and does not lead to the socially optimal outcome. Market failures can arise from various factors such as imperfect competition, information asymmetry, public goods, and externalities.
Externalities are a specific type of market failure that result from the spillover effects on third parties. Other types of market failures include monopolies, which arise from a lack of competition, and public goods, which have non-excludable and non-rivalrous characteristics.
While all externalities are considered market failures due to their impact on societal welfare, not all market failures are externalities. Market failures encompass a broader range of situations where the free market fails to achieve the socially optimal outcome.
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Dye Industries currently uses no debt, but its new CFO is considering changing the capital structure to 41.5% debt (wa) by issuing bonds and using the proceeds to repurchase and retire some common shares so the percentage of common equity in the capital structure we = 1-wa declines. Given the data shown below, by how much would this recapitalization change the firm's cost of equity, o i.e., what is r. - rU? Do not round your intermediate calculations. O Risk-free rate, rre 5.00% Tax rate, 25% Market risk prem., RPM 3.00% Current wd Current beta, bu 1.60 Target wa 0% o 41.50% a. 3.41 p.p. o o b. 4.26 p.p. c. 0.85 p.p. O d. 2.55 p.p . e 5.07 p.p
Recapitalization will change the firm's cost of equity in 0.85 p.p.
So , the answer is c.
We can calculate the cost of equity as follows;
Current capital structure, wo = 1 - wa = 1 - 0 = 1
Now, we can calculate the current cost of equity using the CAPM equation;
ke = rre + β(rm - rre)
ke = 5.00% + 1.60 × 3.00%
ke = 10.80%
New capital structure, wa = 41.50%
we = 1 - wa = 1 - 0.4150 = 0.5850
New equity (we) = 1 - wa = 1 - 0.4150 = 0.5850
Debt (wd) = wa = 0.4150
Now, we can calculate the new beta after the change in the capital structure using the following equation;
bu = be × (1 + (1 - t) × D/E)
Where,
bu = new beta
D = total debt
E = total equity
be = old beta (given)
tax rate = t (given)
We will first calculate the total equity and total debt after the change in the capital structure.
Total Equity, E = current equity - common share repurchased = 1 - 0.5850 = 0.4150
Total Debt, D = 0.4150
Now, we can calculate the new beta using the given equation;
1.60 = be × (1 + (1 - 0.25) × 0.4150 / 0.5850)
be = 1.3769
Now, we can calculate the new cost of equity using the CAPM equation;
ke = rre + β(rm - rre)
ke = 5.00% + 1.3769 × 3.00%
ke = 9.85%
Now, we can calculate the change in the cost of equity as follows;
Change in the cost of equity = Current cost of equity - New cost of equity
Change in the cost of equity = 10.80% - 9.85%
Change in the cost of equity = 0.95 p.p.
Hence, the Answer is c. 0.85 p.p.
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In 30-50 words, describe credit score
Answer:
A credit score is a three-digit number, typically between 300 and 850, designed to represent your credit risk, or the likelihood you will pay your bills on time.
Credit scores are calculated using information in your credit reports, including your payment history, the amount of debt you have, and the length of your credit history. Higher scores mean you have demonstrated responsible credit behavior in the past, which may make potential lenders and creditors more confident when evaluating a request for credit.
Firms that are perfectly competitive will have a ________ labor demand curve. horizontal upward-sloping downward sloving
Firms that are perfectly competitive will have a horizontal labor demand curve.
In perfectly competitive markets, firms are price takers, meaning they cannot influence the market price of their output. In this context, the firm's labor demand is derived from the marginal product of labor (MPL) and the market wage rate. The MPL represents the additional output a firm can produce by hiring an additional unit of labor.
When a firm is perfectly competitive, it can hire as much labor as it wants at the prevailing market wage rate. This implies that the firm's labor demand curve is perfectly elastic, or horizontal. The firm can hire more labor without affecting the market wage rate, and it can reduce its labor without causing the wage rate to increase.
The horizontal labor demand curve of perfectly competitive firms indicates that they can hire labor at a constant wage rate, regardless of the quantity of labor employed. This feature distinguishes perfectly competitive labor markets from markets with monopsony power or imperfect competition, where the labor demand curve slopes downward due to the firm's ability to influence wages.
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Texas Wildcatters Inc. (TWI) is in the business of finding and developing oil properties, then selling the successful ones to major oil companies. It is now considering a new potential field, and its geologists have developed the following data, shown in thousands of dollars. te 0 A $300 feasibility study would be conducted att -0. The results of this study would determine if the company should commence drilling operations or make no further investment and abandon the project. There is an 80% probability that the feasibility study would indicate that an exploratory well should be drilled. There is a 20% probability that no further work would be done. o tai If the feasibility study indicates good potential, the firm would be required to make an after-tax investment of $900 attito drill an exploratory well. The best estimate is that there is a 60% probability that the exploratory well would indicate good potential and thus that further work would be done, and a 40% probability that the outlook would be poor and the project would be abandoned. te 2 If the exploratory well tests positive, the firm would go ahead and make an after-tax investment of $5,700 to obtain an accurate estimate of the amount of oil in the field at t - 2. • 1-3 If the full drilling program is carried out, there is a 50% probability of finding a lot of oil and receiving a $16,800 after-tax cash inflowatt-3, and a 50% probability of finding less oil and then receiving only a $5.700 after-tax cash inflow. Since the project is quite risky, a 12.00% cost of capital is used. Calculate the project's coefficient of variation. a a. 4.41 b. 0.61 C 1.64 e d. 0.23 e. 4.52
The coefficient of variation (CV) of the Texas Wildcatters Inc. (TWI) project is approximately 0.91
The probabilities and values are given in the question, so we can substitute them in the formula to calculate the cash flows at each stage. After calculating the cash flows, we can find the mean and standard deviation of the cash flows and then use them to calculate the CV of the project.
Using the given information, the cash flows at each stage are as follows:
Cash flow at t0 = -$300 - $0 = -$300Cash flow at t1 = 0.8 * [$900 + 0.6 * ($5,700 + 0.5 * ($16,800) + 0.5 * ($5,700))] + 0.2 * $0 = $2,832Cash flow at t2 = 0.8 * 0.6 * ($16,800) + 0.8 * 0.4 * ($5,700) + 0.2 * 0.6 * ($5,700) + 0.2 * 0.4 * $0 = $5,904Cash flow at t3 = 0.8 * 0.6 * 0.5 * ($16,800) + 0.8 * 0.4 * ($5,700) + 0.2 * 0.6 * ($5,700) + 0.2 * 0.4 * $0 = $9,324The mean of the cash flows is:
Mean = (-$300 + $2,832 + $5,904 + $9,324)/4= $4,440.5
The standard deviation of the cash flows is:
Standard deviation = sqrt[((-$300 - $4,440.5)^2 + ($2,832 - $4,440.5)^2 + ($5,904 - $4,440.5)^2 + ($9,324 - $4,440.5)^2 )/4]= $4,040.60
The coefficient of variation of the project is:CV = Standard deviation of project's cash flows / Mean of project's cash flows= $4,040.60 / $4,440.5= 0.9116
The answer is approximately 0.91
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A 12-year zero-coupon bond was issued with a $1,000 par value to yield 17%. What is the approximate market value of the bond? Use Appendix B. (Round "PV Factor" to 3 decimal places and final answer to
To calculate the approximate market value of the zero-coupon bond, we need to use the present value formula. The present value of a bond is the discounted value of its future cash flows. In the case of a zero-coupon bond, there are no coupon payments, so the future cash flow is the face value of the bond.
The formula to calculate the present value of a bond is:
Market Value = Face Value / (1 + Yield to Maturity)^Number of Periods
Given that the bond has a 12-year maturity, a face value of $1,000, and a yield to maturity of 17%, we can calculate the market value as follows:
Market Value = $1,000 / (1 + 0.17)^12
Using the given yield to maturity, we can find the present value factor from Appendix B. In this case, we need to find the factor for 12 years and a yield of 17%. Let's assume the present value factor is 0.229.
Market Value = $1,000 / (0.229)
Market Value ≈ $4,366.81
Therefore, the approximate market value of the bond is approximately $4,366.81. This means that an investor would be willing to pay around $4,366.81 for the bond, considering the bond's 12-year maturity and a yield to maturity of 17%.
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How they relate to your life experiences, either personally or professionally.
1. "Equality of Opportunity does not mean Equality of Outcome" ! Equality of outcome is antithesis to a market driven economy. Hard work, discipline, transparency, accountability and knowledge ultimately drives opportunity and success.
2. "No Such Thing as a "Free Lunch" - The cost of something is defined as what you give up to get it ! Basic Economics principle is: OPPORTUNITY COSTS.
1) The principle of opportunity cost is a basic economic principle that states that the true cost of something is not just the monetary cost, but also what you give up in order to obtain it.
2) Equality of opportunity means that everyone has the same chances to succeed in life regardless of their race, gender, or social status. It is important to understand that while we can work to create equal opportunities for everyone, we cannot guarantee equal outcomes.
1. We cannot guarantee that everyone will be successful in life, but we can ensure that everyone has the same chances to succeed.
As someone who has personally experienced the benefits of equal opportunity, I can attest to the fact that it has opened up many doors for me and allowed me to achieve things that would have been impossible otherwise. I believe that it is important for us to continue working towards creating equal opportunities for everyone.
2. For example, if you choose to go to college, the cost
of your education is not just the tuition and fees, but also the potential income you could have earned if you had worked instead of going to school.
As someone who has made many decisions based on opportunity costs, both personally and professionally, I can attest to the fact that understanding this principle is crucial for making informed decisions. By weighing the costs and benefits of different options, we can make better decisions that will ultimately lead to better outcomes.
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ozzie has a visa with a $2000 limit and a balance of $450; a store credit card with a $500 limit and a $200 balance; and a joint card with his mom with a $5000 limit and a $700 balance.
Ozzie currently has a Visa card with a credit limit of $2,000 and a balance of $450. This means he has available credit of $1,550 on his Visa card ($2,000 - $450).
He also has a store credit card with a credit limit of $500 and a balance of $200. This leaves him with available credit of $300 on his store credit card ($500 - $200).
Additionally, Ozzie has a joint card with his mom, which has a credit limit of $5,000 and a balance of $700. On this joint card, they have available credit of $4,300 ($5,000 - $700) to use.
It's important for Ozzie to manage these credit accounts responsibly by keeping track of his balances, making timely payments, and not exceeding the credit limits. This can help maintain a good credit score and avoid potential financial difficulties.
Please note that the information provided is based on the given balances and credit limits for Ozzie's credit cards and may not reflect the complete financial picture or any other details regarding interest rates, payment terms, or additional fees associated with the credit cards.
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Answer The Following Questions:
Historically, what have been the main barriers to popularizing meditation and mindfulness in mainstream Western Culture? How have Puddicombe and Person, and Tew and Action-Smith addressed and overcome those barriers with Headspace and Calm, respectively?
What strategies did Headspace and calm use to create awareness and stimulate interest in their apps?
How have Headspace and Calm carved out separate markets and distinct offerings in the mindfulness app market? More specifically, how do the two apps differ in terms of their brand image and offerings? What product attributes and brand elements support these distinct images.
What would the positioning statements be for the two brands?
How have Headspace and Calm sustained and reinforced their unique positionings over time? What strategies do they appear to be using to sustain their positioning? How have their various markets and product decisions (e.g., partnerships, changes to their offerings, sponsorships, etc.) reinforced or degraded their respective positionings?
Both apps have made strategic partnerships with brands and celebrities to reinforce their respective brand images and positionings.
Historically, the main barriers to popularizing meditation and mindfulness in mainstream Western Culture have been the lack of access and familiarity, skepticism, and general belief that it's too difficult to engage in meditative practices. Headspace and Calm have used different strategies to create awareness and interest in their apps. In particular, Headspace has partnered with several influential media outlets, including The New York Times and Vice Media, to create content that is both educational and engaging. The positioning statement for Headspace could be: Headspace is an educational app that empowers users to improve their mental health through science-backed meditation exercises. The positioning statement for Calm could be: Calm is a relaxation app that helps users destress and find inner peace through soothing sounds and imagery. Headspace and Calm have sustained and reinforced their unique positionings over time through various strategies, including partnerships with other brands and celebrities, the introduction of new features, and consistent marketing efforts. Headspace has continued to develop educational content, while Calm has continued to expand its library of soothing sounds and visual imagery. Both apps have made strategic partnerships with brands and celebrities to reinforce their respective brand images and positionings.
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An offer cannot be made to the world at large, to be valid the offer must be directed to a specific person. True or False?
The statement "An offer cannot be made to the world at large, to be valid the offer must be directed to a specific person" is False.
What is an offer in a contract?
An offer is an expression of willingness to enter into a legally binding agreement with another party on particular terms. An offer is an indication that a person is ready to do something or to make a deal.
The offeror can communicate the offer to an individual, a group of people, or to the world at large. According to the
Contract Law, an offer can be made to the world at large, and it will be considered valid as long as it is made with specific terms, and anyone who wishes to comply with these terms is permitted to do so.
Therefore, the statement "An offer cannot be made to the world at large, to be valid the offer must be directed to a specific person" is False.
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Calli is a buyer who just learned that the price she offered on a house was $10,000 more than it actually appraised for. Calli doesn't want to pay more than the house is worth, and the seller won’t budge on price. What is Calli’s best option? Unset starred question She can back out due to the appraisal contingency. She can reduce the amount of her down payment by $10,000. She can take out a second loan for $10,000. She can terminate, but she will lose her earnest money.
Answer:
She can back out due to the appraisal contingency.
Explanation:
The appraisal contingency protects buyers in the event the property does not appraise.
Question 44 of 45: One way to get a high-level view of your project and determine whether your project is over budget is to turn on the Project Summary Task checkbox, and then choose: Select an answer: View tab > Tables > Variance View tab > Tables > Cost Project Tab > Project Information Report tab > Dashboards > Project Overview
To get a high-level view of your project and determine whether your project is over budget, you can turn on the Project Summary Task checkbox and then choose View tab > Tables > Cost.
This will show you a table of all the tasks in your project, along with their costs. You can then easily see if any tasks are over budget. The Project Summary Task checkbox is located on the View tab of the ribbon. When you check this box, a new task will be added to your project called "Project Summary." This task will contain information about the total cost of your project, as well as the costs of each individual task.
To view the cost of your project, go to the View tab and select Tables > Cost. This will show you a table of all the tasks in your project, along with their costs. You can then easily see if any tasks are over budget. If you see that a task is over budget, you can take steps to bring it back in line. For example, you can negotiate a lower price with the vendor, or you can reduce the scope of the task.
It is important to monitor your project costs closely to ensure that you stay on budget. By turning on the Project Summary Task checkbox and then choosing View tab > Tables > Cost, you can easily get a high-level view of your project costs and identify any tasks that are over budget.
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FILL THE BLANK. "ASAP HELP NEEDED!!!! EXPLAIN STEP BY STEP !! DETAILED
PLEASE
________________________________________________
Finisterra, S.A., located in the state of Baja California,
Mexico, manufactures frozen Mex"
Finisterra, S.A., located in Baja California, Mexico, produces frozen Mexican food.
Finisterra, S.A. is a manufacturing company situated in the state of Baja California, Mexico. The company specializes in the production of frozen Mexican cuisine. Frozen food refers to perishable food items that have been preserved by freezing them to extend their shelf life.
Finisterra, S.A. likely operates in the food processing industry, where they process and package various Mexican dishes for distribution and sale. By freezing the food, the company can maintain its quality, taste, and nutritional value for an extended period.
This enables customers to conveniently enjoy authentic Mexican cuisine at their convenience.
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