Answer:
hurt, benefit
Explanation:
The basis in a future contract is defined as the difference between the spot price of the asset in the cash market and the price of the same assets future contract.
A short hedge is an investment strategy that is used to protect hedge, against the risk of future decline in asset price or basically to hedge against potential losses by selling at a determined rate. This means that when one is in possession of a commodity and in order to protect against a decline, in the market, you sell (go short) the future contract , while long hedge is when you anticipate a need for the underlying commodity in the future. It means that to protect against an increase in the market price, you buy (go long) the future contract. Then when you are ready to buy the commodity, any increase in the market price is offset by your gain on the future contract.
The above means that where an asset and a contract are liquidated before due dates , there would be basis risk hence both the future and spot price need not move in lockstep before delivery date. This means that a decrease in the basis will benefit the short hedger and hurt the long hedger.
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets: Cash $655,500 $546,000 Marketable securities 759,000 614,300 Accounts and notes receivable (net) 310,500 204,700 Inventories 1,039,500 674,100 Prepaid expenses 535,500 430,900 Total current assets $3,300,000 $2,470,000 Current liabilities: Accounts and notes payable (short-term) $435,000 $455,000 Accrued liabilities 315,000 195,000 Total current liabilities $750,000 $650,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Answer:
1. Previous Year = $1,820,000, Current Year = $2,550,000
2. Previous Year = 3.80 times , Current Year = 4.40 times
3. Previous Year = 2.70 times, Current Year = 3.00 times
Explanation:
working capital = current assets - current liabilities
working capital (Previous Year) = $2,470,000 - $650,000
= $1,820,000
working capital (Previous Year) = $3,300,000 - $750,000
= $2,550,000
Current ratio = current assets ÷ current liabilities
working capital (Previous Year) = $2,470,000 ÷ $650,000
= 3.80 times
working capital (Previous Year) = $3,300,000 ÷ $750,000
= 4.40 times
Quick ratio = (current assets - inventory) ÷ current liabilities
working capital (Previous Year) = ($2,470,000 - 674,100) ÷ $650,000
= 2.70 times
working capital (Previous Year) = ($3,300,000 - 1,039,500) ÷ $750,000
= 3.00 times
Builder and Owner agree that Builder will erect a fence for Owner for $1,500. Builder claims that the fence is taking longer than Builder expected, so Owner must pay Builder $500 more or Builder will not complete the fence. Owner, needing the fence completed, agrees to the additional $500. Builder completes the fence. Owner owes Builder: ________.
A. $1,500.
B. $2,000.
C. $1,000.
D. $1,750.
Answer:
Owner owes Builder : B. $2,000.
Explanation:
A Liability is the present obligation of the entity, that arises as a result of past events, the settlement of which is expected to result in a cash outflow from the entity.
Initially, the Owners owes the Builder $,1500
For the fence to be completed on time, an addition of $500 was owed, upon the owner accepting this arrangement.
Thus, the total obligation owing to the Builder is $2,000.
Answer:
2000
Explanation:
Because 1500+500=2000
A mortgage is paid off in 30 years with a total of $124,000. It had a 2% interest rate that compounded monthly. What was the principal
Answer:
the Principle, PV on the mortgage was $68,086.64.
Explanation:
The Principle on the mortgage, PV is determined as follows :
FV = $124,000
N = 30 × 12 = 360
P/ yr = 12
PMT = $0
R = 2%
PV = ?
Using a Financial Calculator, the Principle, PV on the mortgage was $68,086.6399 or $68,086.64.
TB MC Qu. 6-70 Awtis Corporation has a margin of ... Awtis Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $213,600 and the variable expenses are 45% of sales. Given this information, the actual profit is:
Answer:
$39,160
Explanation:
Awtis corporation has a margin of safety percentage of 25%
= 25/100
= 0.25
The break even point is $213,600
The variable expenses is 45%
= 45/100
= 0.45
The first step is to calculate the contribution margin ratio
Contribution margin ratio= 1-variable expenses
= 1-0.45
= 0.55
The fixed expenses can be calculated as follows
Fixed expenses= break even sales × contribution margin ratio
= $213,600×0.55
= 117,480
The total actual sales can be calculated as follows
= Break even sales/(1-margin of safety)
= $213,600/(1-0.25)
= $213,600/0.75
= $284,800
Therefore, the actual profit can be calculated as follows
Actual profit= Contribution margin ratio×sales - fixed expenses
= 0.55×284,800-$117,480
= $156,640-$117,480
= $39,160
Hence the actual profit is $39,160
Cost recovery. Richardses' Tree Farm, Inc. purchased a new aerial tree trimmer for $. It is classified in the property class category of a single-purpose agricultural and horticultural structure. Then the company sold the tree trimmer after four years of service. If a seven-year life and MACRS, LOADING..., was used for the depreciation schedule, what is the after-tax cash flow from the sale of the trimmer (use a % tax rate) if a. the sales price was $? b. the sales price was $? c. the sales price was $? a. If the sales price is $, what is the after-tax cash flow?
Answer:
after tax cash flow = $29,512.32
Explanation:
the numbers are missing in this question:
purchase cost = $82,000
tax rate = 40%
selling price at end of year 4 = $32,000
MACRS 7 year depreciation schedule:
year % depreciation expense carrying value
1 14.29% $11,717.80 $70,282.20
2 24.29% $19,917.80 $50,364.40
3 17.49% $14,341.80 $36,022.60
4 12.49% $10,241.80 $25,780.80
after tax cash flow = $32,000 - [($32,000 - $25,780.80) x 40%] = $32,000 - $2,487.68 = $29,512.32
Glacier Trails manufactures backpacks for adventurers. The backpacks come in two types: Daytripper, and Excursion. Glacier anticipates the following sales volumes for the coming period:
Daytripper: 2,000 backpacks
Excursion: 1.200 backpacks
If total budgeted revenue for the period is $250,000 and the sales price for Daytripper backpacks is $50, what is the budgeted sales price for Excursion backpacks?
a. $ 78.
b. $125.
c. $5130.
d. $158.
e. none of the above.
Answer:
the budgeted sales price for Excursion backpacks is b. $125.
Explanation:
Total Budgeted Revenue = Daytripper Budgeted Revenue + Excursion Budgeted Revenue
Therefore,
Let the budgeted sales price for Excursion backpacks be $y
$250,000 = 2,000 × $50 + 1.200 × $y
$150,000 = $1,200 y
$125 = y
Therefore, the budgeted sales price for Excursion backpacks is $125.
You find a zero coupon bond with a par value of $10,000 and 14 years to maturity. The yield to maturity on this bond is 5.1 percent. Assume semiannual compounding periods. What is the price of the bond
Answer:
Bond Price = $4940.8468 rounded off to $4940.85
Explanation:
The price of a zero coupon bond is simply calculated by calculating the present value of the face value of the bond that the bond pays at maturity. The formula for the price of a zero coupon bond is,
Bond Price = Face Value / ( 1 + r )^n
Where,
r is the rate or YTM n is the number of periods left to maturityAssuming that the r or YTM is always stated in annual terms, the semi annual YTM will be 5.1% / 2 = 2.55%
Assuming semi annual compounding periods, the total number of periods or n will be,
n = 14 * 2 = 28
Bond Price = 10000 / (1 + 0.0255)^28
Bond Price = $4940.8468 rounded off to $4940.85
A firm recently issued $1,000 par value, 15-year bonds with a coupon rate of 9%. Coupon interest payments will be paid semi-annually. The bonds sold at par value, but the firm paid flotation costs amounting to 5% of par value. The firm has a corporate tax rate of 21%. What is the firm's after-tax cost of debt for these bonds?
Answer:
The firm's after cost of debt is 7.48%
Explanation:
Floatation cost increases the cost because a diminished portion of the whole amount was received.
Given that;
r = 9%
t = 21%
f = 5%
After tax cost of debt = r ( 1 - t ) / ( 1 - f )
0.09 ( 1 - 0.21 ) / 1 - 0.05 )
= 0.0711 / 0.95
=0.0748421053
= 7.48%
A monopolistically competitive firmA. faces a downward-sloping demand curve and a steeper downward -sloping marginal revenue curve.B. faces a vertical demand curve and identical marginal revenue curveC. Produces a product that is undifferentiated by style, location, or qualityD. faces an upward-sloping demand curveE. faces a downward-sloping demand and a horizontal marginal revenue curve.
Answer:
Option A is correct.
Explanation:
Option A is correct because a monopolistically competitive firm has a downward-sloping demand curve and the marginal revenue curve is steeper than the demand curve that lies below the demand curve. Moreover, in this market, the product sold can be differentiated on the basis of quality. Further, in this market, the marginal cost curve first decreases then start increasing and cuts the marginal revenue curve.
Storm in Bowl is a noodle manufacturer in Texas. It advertises the ingredients used for its product to convince customers that it is safe for consumption. The company has also slashed its prices to ensure affordability for low-income consumers. According to the VALS™ framework, Storm in Bowl is most likely targeting
Answer: Survivors
Explanation:
From the question, we are informed that Storm in Bowl is a noodle manufacturer in Texas and that it advertises the ingredients used for its product to convince customers that it is safe for consumption.
We are further told that the company has also slashed its prices to ensure affordability for low-income consumers. According to the VALS™ framework, Storm in Bowl is most likely targeting survivors.
The survivors are those with low income and have very few resources and are also loyal to a particular brand.
What is a commodity?
The correct answer is D. Something of value that can be bought, sold, or traded
Explanation:
The word "commodity" is used in economics to refer to any good or product that has an economic value and due to this, can be part of the market. This means any commodity can be traded, sold, or bought. Moreover, this concept is mainly applied to raw materials such as coal, timber, or wheat that can be used to make other manufactured products such as plastics, furniture, or flour. According to this, the option that correctly describes the word commodity is option D.
Answer:
D. Something of value that can be bought, sold, or traded
Starset, Inc., has a target debt-equity ratio of 1.15. Its WACC is 8.6 percent, and the tax rate is 21 percent.
Required:
a. If the company's cost of equity is 14 percent, what is its pretax cost of debt?
b. If instead you know that the aftertax cost of debt is 6.1 percent, what is the cost of equity?
Answer:
a. 4.94%
b. 11.48%
Explanation:
Here in this question, we are interested in calculating the pretax cost of debt and cost of equity.
We proceed as follows;
a. From the question;
The debt equity ratio = 1.15
since Equity = 1 ; Then
Total debt + Total equity = 1 + 1.15 = 2.15
Mathematically ;
WACC = Cost of equity x Weight of equity + Pretax Cost of debt x Weight of debt x (1-Tax rate)
Where WACC = 8.6%
Cost of equity = 14%
Weight of equity = 1/(total debt + total equity) = 1/(1+1.15) = 1/2.15
Pretax cost of debt = ?
Weight of debt = debt equity ratio/total cost of debt = 1.15/2.15
Tax rate = 21% = 0.21
Substituting these values, we have;
8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)
8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)
Pretax cost debt = (8.6%-6.511628%)/(1.15/2.15 x (1-21%))
Pretax cost of debt = 4.94%
b. WACC = Cost of equity x Weight of equity + After tax Cost of debt x Weight of debt
8.6% = Cost of equity x 1/2.15 + 6.1% x 1.15/2.15
Cost of equity = (8.6%-3.26279%)/(1/2.15)
Cost of equity = 11.48%
You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent?Year 0 1 2 3Project A -80,000 31,000 31,000 31,000Project B -80,000 0 0 110,000
Answer:
NPV Project A = - $825.31
NPV Project B = $6119.89
So, at a discount rate of 8.5%, Project B should be accepted.
NPV Project A = - $6804
Npv Project B = - $3764.48
So, at a discount rate of 13%, neither of the projects should be accepted.
Explanation:
One of the methods to evaluate a project is to determine the NPV or Net Present Value from the project. If a project provides a positive NPV after discounting the cash flows from the project at a set discount rate, the project should be accepted. If the project gives a negative NPV, the project should be discarded.
The NPV is calculated as follows,
NPV = CF1 / (1+r) + CF2 / (1+r)^2 + ... + CFn / (1+r)^n - Initial cost
Where,
CF1, CF2, ... represents the cash flows in year 1 and year 2 and so onr is the discount rateAt 8.5% discount rate
NPV Project A = 31000/(1+0.085) + 31000/(1+0.085)^2 + 31000/(1+0.085)^3 - 80000
NPV Project A = - $825.31
NPV Project B = 110000 / (1+0.085)^3 - 80000
NPV Project B = $6119.89
So, at a discount rate of 8.5%, Project B should be accepted.
At 13% discount rate
NPV Project A = 31000/(1+0.13) + 31000/(1+0.13)^2 + 31000/(1+0.13)^3 - 80000
NPV Project A = - $6804
NPV Project B = 110000 / (1+0.13)^3 - 80000
Npv Project B = - $3764.48
So, at a discount rate of 13%, neither of the projects should be accepted.
Expected return and standard deviation. Use the following information to answer the questions: LOADING.... a. What is the expected return of each asset? b. What is the variance of each asset? c. What is the standard deviation of each asset? Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type. a. What is the expected return of asset A?
Answer and Explanation:
a. The computation of expected return of each assets is shown below:-
Expected Return on Asset A in state is
= 0.39 × 0.02 + 0.45 × 0.02 + 0.16 × 0.02
= 0.02
Expected Return on Asset B in state is
= 0.39 × 0.25 + 0.45 × 0.06 + 0.16 × -0.04
= 0.1181
Expected Return on Asset C in state is
= 0.39 × 0.35 + 0.45 × 0.19 + 0.16 × -0.22
= 0.1868
b. The computation of variance of each asset is shown below:-
Variance of Assets A is
= 0.39 × (0.02 - 0.020)^2 + 0.45 × (0.02 - 0.020)^2 + 0.16 × (0.02 - 0.020)^2
= 0
Variance of Assets B is
= 0.39 × (0.25 - 0.1181)^2 + 0.45 × (0.06 - 0.1181)^2 + 0.16 × (-0.04 - 0.1181)^2
= 0.0123
Variance of Assets C is
= 0.39 × (0.35 - 0.1868)^2 + 0.45 × (0.19 - 0.1868)^2 + 0.16 × (-0.22 - 0.1868)^2
= 0.0369
c. The computation of standard deviation of each asset is shown below:-
Standard Deviation of A is
= (0.39 × (0.02 - 0.020)^2 + 0.45 × (0.02 - 0.020)^2 + 0.16 × (0.02 - 0.020)^2)^0.5
= 0
Standard Deviation of B is
= (0.39 × (0.25 - 0.1181)^2 + 0.45 × (0.06 - 0.1181)^2 + 0.16 × (-0.04 - 0.1181)^2)^0.5
= 0.1109
Standard Deviation of C is
= (0.39 × (0.35 - 0.1868)^2 + 0.45 × (0.19 - 0.1868)^2 + 0.16 × (-0.22 - 0.1868)^2)^0.5
= 0.1920
Pizza sells an average of pizzas per week, of which % are single-topping pizzas and % are supreme pizzas with multiple toppings. Singles sell for each and incur variable costs of . Supremes sell for each and incur variable costs of . The contribution margin per unit and total contribution margin for Singles and Supremes are
Answer:
the question is incomplete, so I looked for a similar question:
"Pizza sells an average of 150 pizzas per week, of which 20% are single-topping pizzas and 80% are supreme pizzas with multiple toppings. Singles sell for $8 each and incur variable costs of $2. Supremes sell for $12 each and incur variable costs of $6."
contribution margin for Singles = $8 - $2 = $6
contribution margin ratio for Singles = $6 / $8 = 75%
total contribution margin for Singles = $6 x 150 x 20% = $180
contribution margin for Supremes = $12 - $6 = $6
contribution margin ratio for Supremes = $6 / $12 = 50%
total contribution margin for Supremes = $6 x 150 x 80% = $720
"13. In Laura’s new role at Walden-Martin Family Medical Clinic, she will be writing checks to take care of the accounts payable for the clinic. A practicum student has just started at the clinic and will be working with Laura for the next several days. How should Laura describe this aspect of her job? "
Laura characterizes her employment as "trusting" because she will be working with Laura in the accounting office for the next few days.
When rumors of future layoffs or closures circulate, transparency keeps employees from leaving.
There are five components to performing a work, according to the explanation:
1. Be respectful.The first of the five characteristics is respect, which has the most weight with your staff.
2. Salary and BenefitsThis employment feature has risen in importance since 2012, when it was ranked third. It is the only significant aspect of the job having a monetary value.
3. Have faith in yourself.When rumors of future layoffs or closures circulate, transparency keeps employees from leaving.
Learn more:https://brainly.com/question/18343981?referrer=searchResults
Suppose we have the following scenario: Multiplier: 1.2 Tax Rate: 16% Increase in spending: $175 Billion Total Deficit in the previous year: $1 Trillion Based on the information provided what is the deficit that arises from the increase in spending from the government
Answer:
Deficit = $141.4 billion
Explanation:
Multiplier (K) = ΔY {GDP(income)} / ΔI {Govt spending}
ΔY = K * ΔI
ΔY = 1.2 * $175 billion
ΔY = $210 billion (income)
Tax applicable on income that generate revenue:
Revenue = 210 billion * 16%
Revenue = 210 billion * 0.16
Revenue = $33.6 billion
Deficit = Government spending - Revenue
Deficit = $175 billion - $33.6 billion
Deficit = $141.4 billion
The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year $949,000
Net income for the year 295,000
Cash dividends declared for the year 55,000
Retained earnings balance at the end of the year 1,397,000
Cash dividends payable at the beginning of the year 12,600
Cash dividends payable at the end of the year 14,900
What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?
a. $55,000.
b. $57,300.
c. $82,500.
d. $2,300.
e. $52,700.
Answer: e. $52,700
Explanation:
Cash Dividend to be paid = Cash dividends payable at the beginning of the year + Cash dividends declared for the year - Cash dividends payable at the end of the year
= 12,600 + 55,000 - 14,900
= $52,700
Earning money is an incentive to increasing ___________ to purchase___________.
Answer:
incentive, goods is the answer
Answer:
goods
Explanation:
goods is the answer
The open interest on silver futures at a particular time is the Group of answer choices number of all long or short silver futures contracts outstanding. number of silver futures contracts traded during the day. number of silver futures contracts traded the previous day. number of outstanding silver futures contracts for delivery within the next month.
Answer:
number of all long or short silver futures contracts outstanding.
Explanation:
The open interest on silver futures at a particular time is the number of all long or short silver futures contracts outstanding. Open interest can be defined as the total or overall number of contracts (open long and short positions) outstanding in a futures market.
In stocks exchange, when a contract begins trading it has an open interest that is equal to zero and in future dates, more contracts are entered into as time passes by.
Additionally, majority of the contracts are liquidated before their maturity date.
Net present value method The following data are accumulated by Geddes Company in evaluating the purchase of $160,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $43,500 $83,500 Year 2 23,000 63,000 Year 3 13,500 53,500 Year 4 6,500 46,500 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Assuming that the desired rate of return is 12%, determine the net present value for the proposal. If required, round to the nearest dollar. Net present value $ 86,500 Would management be likely to look with favor on the proposal
Answer:
A.$32,396
B. Yes
Explanation
A. Calculation to determine the net present value for the proposal
Year Net Cash Flow Present value Discounting factor at 12% Discounted Cash Flow
1 $ 83,500.00 0.893 $ 74,565.50
2 $63,000.00 0.797 $ 50,211.00
3 $ 53,500.00 0.713 $ 38,145.50
4 $ 46,500.00 0.636 $ 29,574.00
Present value of net cash flows $ 192,496.00
Amount to be invested $ 160,000.00
Net Present Value $ 32,496
Net Present Value $ 32,496/Amount to be invested $160,000.00 =0.2031*100
=20.31%
B.Yes the management would likely to look with favor on the proposal because the net present value of 20.31% is higher than the expected rate of return of 12%.
What are Red Bull's greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share?
Answer:
like that's Bom pom and manster also ĺine red if you need to visit a super market you can get a anergy drink and ask them for what do you need exactly.
When working on a reconciliation, the Reconciliation screen has all the transaction data you need. On the Reconciliation screen, by default, the list of transactions hides transactions that occur after the statement end date. To show all transactions _______________________________ or select the Clear filter/View all link in this same area to remove all filters. Which option below would correctly fill the space above? A) "Statement ending date filter" in the upper left corner of the transaction list B) "Statement ending date filter" at the right side of the transaction listC) "Statement ending date filter" in the upper left corner of the transaction list D) Statement ending date filter in the upper left corner of the transaction list
Answer:
Correct Answer:
B) "Statement ending date filter" at the right side of the transaction list
Explanation:
The above option was the one that would enable someone to show all transactions when the person is working on a business reconcillation account of an organization.
Which of the following are recommended ways to learn more about IT careers? Check all of the boxes
that apply.
scheduling an appointment with a career counselor at a school
attending an informational session
applying for an internship
renting a science fiction movie about computer viruses
contacting a professional organization, such as CompTIA
Answer:
scheduling an appointment with a career counselor at a schoolattending an informational sessionapplying for an internshipcontacting a professional organization, such as CompTIAExplanation:
To learn more about IT careers or just carriers in general, one can contact the Career counselor at school. Their job is to help students find out more abut careers so that they know which path they would like to follow.
One can also attend information sessions where they can listen to people speak on IT careers and ask questions they would like answers to as well.
A practical way to find out about IT careers is to intern at an IT firm. This way you get to see first hand what the job entails and if it is the kind of thing you would like to do.
There are also professional organizations that offer certifications in IT such as CompTIA. As they are well versed in the area, they can provide more information on IT careers including the educational background required.
Answer:
1. Scheduling an appointment with a career counselor at school.
2. Attending an informational session.
3. Applying for an internship
5. Contacting a professional organization, such as CompTIA.
Explanation: This is the correct answer on Edge 2021, just did the assignment. Hope this helps ^-^.
Microsoft online. Which of the following price customization tool is Microson using?
a. Controlling availability
b. Setting prices based upon transaction characteristics
c. Managing product-line offerings
d. Setting prices based upon buyer characteristic
Answer:
Setting prices based upon buyer characteristic
Explanation:
Microson is setting prices based on buyer characteristics. The question says it is giving educational discounts of 10 percent to parents and students. This is value pricing and it mainly involves setting prices with your customers or consumers in focus. Microson based their prices on the worth as perceived by the parents and students. It's discount is characteristic of the people buying it.
Answer this question on the basis of the given information for an economy in 2016.
Dollar value of resource extraction activity = $20 billion
Dollar value of production activity = $50 billion
Dollar value of distribution activity = $80 billion
Dollar value of final output = $110 billion
Suppose that in 2017, the dollar value of distribution activity fell to $70 billion, but the other values remained the same. Based on this, we could conclude that from 2016 to 2017,
A. neither GO nor GDP were affected by the change in distribution activity.
B. GO fell by $10 billion, while GDP was unchanged.
C. GDP fell by $10 billion, while GO was unchanged.
D. GO and GDP both fell by $10 billion.
Answer: B. GO fell by $10 billion, while GDP was unchanged.
Explanation;
Gross Output is different from GDP in that where GDP only takes into account the dollar value of the final output so as to avoid double counting, the Gross Output takes into account those intermediate expenses and consumption that were used to create the final goods and services.
As such, if the dollar value of distribution activity fell to $70 billion then the Gross Ouput would also have to fall by the equivalent amount which in this case would be $10 million.
As all other values did not change, then neither did the dollar value of final output meaning that GDP did not change.
Merry Maidens Cleaning generally charges $280 for a detailed cleaning of a normal-size home. However, to generate additional business, Merry Maidens is offering a new-customer discount of 10%. On May 1, Ms. E. Pearson has Merry Maidens clean her house and pays cash equal to the discounted price. Required: Record the revenue earned by Merry Maidens Cleaning on May 1.
Answer:
May 1
DR Cash $252
CR Service Revenue $252
(To record payment for services rendered)
Working
Cash = Net Service revenue
Net Service revenue = $280 * ( 1 - 10%)
= 280 * 90%
= $252
Eleanor spends all of her money on magazines and donuts. In 2014, she earned $14.00 per hour, the price of a magazine was $7.00, and the price of a donut was $1.00.
Which of the following give the nominal value of a variable?
A. Eleanor's wage is $14.00 per hour in 2014.
B. The price of a donut is $1.00 in 2014.
C. Eleanor's wage is 2 magazines per hour in 2014.
Which of the following give the real value of a variable?
A. Eleanor's wage is 14 donuts per hour in 2014.
B. The price of a magazine is 7 donuts in 2014.
C. Eleanor's wage is $14.00 per hour in 2014.
Suppose that the Fed sharply increases the money supply between 2014 and 2019. In 2019, Eleanor's wage has risen to $28.00 per hour. The price of a magazine is $14.00 and the price of a donut is $2.00.
In 2019, the relative price of a magazine is ________.
Between 2014 and 2019, the nominal value of Eleanor's wage ______, and the real value of her wage _________.
Monetary neutrality is the proposition that a change in the money supply nominal variables and _______ real variables.
Answer;
1. A. Eleanor's wage is $14.00 per hour in 2014.
B. The price of a donut is $1.00 in 2014.
When a variable is stated in nominal terms, it is usually given as a fixed monetary value because it is not adjusted for inflation. It therefore mentions just the price as is.
2. A. Eleanor's wage is 14 donuts per hour in 2014.
B. The price of a magazine is 7 donuts in 2014.
When goods are described in real terms, they are related to another good in order to adjust them for inflation.
3. The price of a magazine is $14.00 and the price of a donut is $2.00.
In 2019, the relative price of a magazine is 7 donuts.
The relative price = Price of Magazine/ Price of donuts
= 14/2
= 7 donuts.
4. Between 2014 and 2019, the nominal value of Eleanor's wage increases, and the real value of her wage remains the same.
As a result of the increase in money supply, Eleanor's wages increased nominally from $14 to $28.
However, in real terms her wages did not increase at all because the price level in the economy increased by the same rate that her wages increased meaning that she is still only able to buy the same quantity of things.
5. Monetary neutrality is the proposition that a change in the money supply affects nominal variables and does not affect real variables.
From Eleanor's example above, the concept of Money Neutrality is shown in that while a change in money supply will affect nominal variables, it will not affect real variables due to a general rise in prices.
A company reported that its bonds with a par value of $50,000 and a carrying value of $57,500 are retired for $60,600 cash, resulting in a loss of $3,100. The amount to be reported under cash flows from financing activities is:
Answer:
The amount this company would report under cash flows from financing activities is $60,600.
Explanation:
These cash flows of $60,600 represent the actual cash outflows, an amount that bondholders would receive from the company in retirement of the bonds. The statement of cash flows records the actual cash inflows and outflows of a company transactions during a particular accounting period. Every item is adjusted to reflect the actual cash flows. It is strictly based on the Cash Basis of accounting instead of the accrual basis.
Kim's Bridal Shoppe has 12,400 shares of common stock outstanding at a price of $58 per share. It also has 325 shares of preferred stock outstanding at a price of $88 per share. There are 400 bonds outstanding that have a coupon rate of 7.7 percent paid semiannually. The bonds mature in 39 years, have a face value of $2,000, and sell at 113 percent of par. What is the capital structure weight of the common stock
Answer:
43.54%
Explanation:
the firm's total market value:
12,400 common stocks x $58 = $719,200325 preferred stocks x $88 = $28,600400 bonds x $2,260 = $904,000total $1,651,800total capital structure weight of common stocks = $719,200 / $1,651,800 = 43.54%
