Answer:
The economic growth will be lower.
Explanation:
The rise in pollution and the doubling of the rate of depreciation will affect economic growth adversely. However, rapid wear and tear of capital will cost the person and it will reduce the purchasing power. Thus, lower purchasing power will result in lower economic growth. Moreover, pollution creates three main problems that are reduced labor productivity, rise in health problems, and loss of crop yield. So the reduction in all these factors will also slow down economic growth.
In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such as shortage costs. Here is a random sample of 20 of Taylor's items.
ITEM NUMBER ANNUAL USAGE ITEM NUMBER ANNUAL USAGE
1 $ 1,500 11 $ 13,000
2 12,000 12 600
3 2,200 13 42,000
4 50,000 14 9,900
5 9,600 15 1,200
6 750 16 10,200
7 2,000 17 4,000
8 11,000 18 61,000
9 800 19 3,500
10 15,000 20 2,900
a. What would you recommend Taylor do to cut back its labor cost? (Illustrate using an ABC plan.)
b. Item 15 is critical to continued operations. How would you recommend it beclassified?
Answer:
a) Taylor Industries can successfully cut back its labor cost in inventory stockrooms by counting only high-value items. These items are determined by reference to their Annual Usage values. The items' annual usage values should be used as the activity cost pool for accumulating and allocating labor cost in inventory stockrooms. Taylor Industries can establish a benchmark or cutoff point so that only the items meeting this benchmark are counted. For example, the items with annual usage value above $5,000 should be included in the items to be counted. This strategy will reduce the number of items to be counted and therefore the labor cost.
b) Since item 15 is critical to Taylor Industries' continued operations, it should be classified as a direct materials cost and not an overhead cost.
Explanation:
a) Data and Calculations:
a random sample of 20 of Taylor's items:
ITEM NUMBER ANNUAL USAGE ITEM NUMBER ANNUAL USAGE
1 $ 1,500 11 $ 13,000
2 12,000 12 600
3 2,200 13 42,000
4 50,000 14 9,900
5 9,600 15 1,200
6 750 16 10,200
7 2,000 17 4,000
8 11,000 18 61,000
9 800 19 3,500
10 15,000 20 2,900
Average annual usage value = $12,657.50
Suppose that when your income increases by $300, your consumption expenditures increases by $240.
Your marginal propensity to consume (MPC) is _________ .
If your MPC was the same as the MPC for the economy as a whole, the expenditure multiplier for the economy would be ______________ .
Thus, a $4 million investment project would increase income by $ _________ million in total.
Answer:
The MPC is 0.8
The multiplier or k is 5
The increase in income would be $20 million.
Explanation:
The marginal propensity to consume (MPC) is the proportion of increased disposable income that consumers spend. It is a metric to quantify the induced consumption and how an increase in consumer spending occurs as a result of increase in income.
MPC is calculated as follows,
MPC = Change in consumer spending / change in income
MPC = 240 / 300
MPC = 0.8 or 80%
To calculate the multiplier, we simply use the following formula,
Multiplier or k = 1 / (1 - MPC)
k = 1 / (1 - 0.8)
k = 5
So, the expenditure multiplier for the economy would be 5.
To calculate the increase in income, we will multiply the investment amount by the expenditure multiplier.
Income increase = 4000000 * 5
Income increase = $20000000 or 20 million
Brand managers know that increasing promotional budgets eventually result in diminishing returns. The first one million dollars typically results in a 26% increase in awareness, while the second million results in adding another 18% and the third million in a 5% increase. Andrews’s product Ant currently has an awareness level of 78% . While an important product for Andrews, Ant’s promotion budget will be reduced to one million dollars for the upcoming year. Assuming that Ant loses one-third of its awareness each year, what will Ant’s awareness level be next year?
Answer:
52%
Explanation:
Calculation for Ant’s awareness level be next year
First step
Based on the information given Ant current awareness level is 78% and we are told that Ant loses 1/3 of its awareness each year. Hence we are going to first calculate for Ant Starting awareness using this formula
Starting Awareness=Currently awareness level *(1-1/3 of awareness each year)
Starting Awareness=78%*2/3
Starting Awareness=52%
Second Step
Based on the information given we were told that the first one million dollars results in a 26% increase in awareness.This means that we are going to find the percentage of the awareness after promotion using this formula:
Awareness after promotion = Starting Awareness +increase in awareness
Awareness after promotion=52% + 26%
Awareness after promotion= 78%
The last step is to find the what Ant’s awareness level will be next year using this formula
Awareness level next year = Awareness after promotion * 2/3
Awareness level next year = 78%*2/3
Awareness level next year= 52%
Therefore Ant’s awareness level next year will be 52%
Data pertaining to the current position of Forte Company are as follows:
Cash $412,500
Marketable securities 187,500
Accounts and notes receivable (net) 300,000
Inventories 700,000
Prepaid expenses 50,000
Accounts payable 200,000
Notes payable (short-term) 250,000
Accrued expenses 300,000
Required:
Compute:
a. The working capital.
b. The current ratio.
c. The quick ratio.
Answer:
Forte Company
Computation of :
a. The working capital = Current Assets minus Current Liabilities
= $1,650,000 - $750,000
= $900,000
b. The current ratio = Current assets/Current liabilities
= $1650,000/$750,000
= 2.2 : 1
c. The quick ratio = (Current asset minus Inventory)/Current liabilities
= ($1,650,000 - 750,000)/$750,000
= $900,000/$750,000
= 1.2 : 1
Explanation:
a) Data and Calculations:
Cash $412,500
Marketable securities 187,500
Accounts and notes receivable (net) 300,000
Inventories 700,000
Prepaid expenses 50,000
Total Current Assets $1,650,000
Accounts payable 200,000
Notes payable (short-term) 250,000
Accrued expenses 300,000
Total Current Liabilities $750,000
b) Forte Company's working capital is the difference between the current assets and the current liabilities. In this case, it is very positive with a huge sum of $900,000.
c ) Forte Company's current ratio is an expression of the relationship between current assets and current liabilities. It shows how much of current liabilities that current assets can cover. The ability of the management of Forte Company to settle its current obligations from the current assets is worked out under this ratio.
d) Forte has a quick ratio of more than 1 : 1. It is similar to the current ratio but with the omission of the Inventory and Prepaid Expenses which are regarded as always taking longer to sell and recover respectively.
In insurance, an offer is usually made wheN
Answer: the insurance application has been submitted.
Explanation:
Insurance is a contract which is typically represented by a policy, whereby an individual will receive financial protection in case there are losses against the thing that was insured.
Since the insurance is a contract, an offer can be made when there has been an application for the insurance which would have been submitted.
A stock priced at $61 has three-month calls and puts with an exercise price of $55 available. The calls have a premium of $5.28, and the puts cost $0.56. The risk-free rate is 1.1%. If the put options are mispriced, what is the profit per option assuming no transaction costs?
Answer:
The Profit per option = $1.431
Explanation:
Given that:
Current stock price S = $61
Exercise Strike price X = $55
Value of call option C = $5.28
Puts Costs = $0.56
risk-free rate = (1.1% × 3)/12
risk - free rate = 0.275%
If the put options are mispriced, what is the profit per option assuming no transaction costs
Present value of the strike price [tex]X = \dfrac{X}{(1+r)}[/tex]
[tex]X = \dfrac{55}{(1+\dfrac{0.275}{100})}[/tex]
[tex]X = \dfrac{55}{(1+0.00275)}[/tex]
[tex]X = \dfrac{55}{(1.00275)}[/tex]
X = $54.849
The formula that hold for the put option can be expressed as:
P = Present value of the strike price X + C - S
P = $(54.849 + 5.28 - 61)
P = $60.129 - $61
P = - $0.871
Thus, the put option = - $0.871
This implies that the Put option is out of cash since it is negative.
Now, The Profit per option = put costs - (- put option)
The Profit per option = 0.56 - ( - 0.871)
The Profit per option = $1.431
Firm M has a margin of 7%, turnover of 2.0, sales of $910,000, and average stockholders' equity of $490,000. Required: Calculate Firm M’s average total assets, net income, return on investment (ROI), and return on equity (ROE
Answer:
1. Average total asset = $455,000
2. Net income = $63,700
3. Return on investment = 14%
4. Return on equity (ROE) = 13%
Explanation:
These can be calculated as follows:
1. Average total asset
To calculate this, we use the formula for calculating the Asset turnover ratio as follows:
Asset turnover ratio = Sales / Average total asset ……………………………… (1)
Where;
Turnover = asset turnover ratio = 2
Sales = $910,000
Average total asset = ?
Substituting the values into equation (1) and solve for average total asset, we have:
2 = $910,000 / Average total asset
Average total asset = $910,000 / 2
Average total asset = $455,000
2. Net income
To calculate this, we use the formula for calculating net income margin as follows:
Net income margin = Net income / Sales ……………………………………. (2)
Where,
Margin = Net income margin = 7%, or 0.07
Net income = ?
Sales = $910,000
Substituting the values into equation (2) and solve for net income, we have:
7% = Net income / $910,000
Net income = $910,000 * 7%
Net income = $63,700
3. Return on investment
To calculate this, we use the formula for calculating the return on investment as follows:
Return on investment = Net income / Average total assets ……………… (3)
Where;
Net income = $63,700
Average total asset = $455,000
Substituting the values into equation (3), we have:
Return on investment = $63,700 / $455,000
Return on investment = 0.14, or 14%
4. Return on equity (ROE)
To calculate this, we use the formula for calculating the return on equity (ROE) as follows:
Return on equity (ROE) = Net income / Average stockholders' equity…….. (4)
Net income = $63,700
Average stockholders' equity = $490,000
Substituting the values into equation (4), we have:
Return on equity (ROE) = $63,700 / $490,000
Return on equity (ROE) = 0.13, or 13%
Which group would advertisers want to target and with what type of advertisement immediately before a holiday, as opposed to during a non-holiday time
Answer:
in graph it shows that the highest effect is w low content/low motivation/low knowledge
-only tend to be persuaded for a short time and would need the advertisement right before target date
b) group would be persuaded by high content argument but will remain persuaded so do not need to be advertised immediately before the holiday
Explanation:
Use the following information to determine the break-even point in sales dollars:
Unit sales 51,600 Units
Dollar sales $516,000
Fixed costs $206,000
Variable costs $193,500
$206,000.
$116,500.
$186,400.
$329,600.
$516,000.
Answer:
$329,600
Explanation:
The computation of break-even point is shown below:-
But before that first we need to compute the following calculations
Total contribution margin ratio = Sales - Variable cost
= $516,000 - $193,500
= $322,500
Contribution margin in percentage = Total Contribution Margin ÷ Total Sales
= $322,500 ÷ $516,000
= 62.50%
Now,
Break-even point = Total fixed cost ÷ Contribution margin in percentage
= $206,000 ÷ 62.50%
= $329,600
In organizational change, unfreezing can occur by:
a. increasing the restraining forces.
b. increasing the driving forces.
c. reducing the urgency to change.
d. reducing the pace of the change.
e. changing individuals in key positions.
Answer: b. increasing the driving forces.
Explanation:
Driving forces analysis (DFA) this are ways used in understanding and accounting for changes in industrial level. The drivers used for this are clusters of trends which directly or collectively have influence on changes occurring in an industrial structure and a rival's competitive conduct. The word force used here is used to show that the said drivers can materially impact the firm's future.
The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.8 hours Standard labor rate $13.60 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,600 hours Actual total labor cost $100,320 Actual output 950 units What is the labor efficiency variance for the month?
Answer:
the labor efficiency variance for the month is $23,256 Favorable.
Explanation:
Labor efficiency variance = (Aq × SP) - (Sq × Sp)
= (7,600 × $13.60) - ((950 × 9.8) × $13.60)
= (7,600 × $13.60) - (9.310 × $13.60)
= $23,256 Favorable
A large furniture and appliance rental business is considering sponsorship options. It has brought together vice-presidents from the various functional areas of the company to determine which sponsorships will most effectively reach the rental company's prospective customers. The rental company has established a:
a. cross-functional team
b. horizontally-organized team
c. vertically-organized team
d. problem-resolution team
e. project committee
Answer:
a. cross-functional team
Explanation:
In this case, the most appropriate is the use of a cross-functional team.
This team is formed by several professionals with knowledge, techniques, skills and resources to help the company achieve its goals and objectives.
The benefits of forming a cross-functional team is to aggregate the potential of each member in a common objective, which ensures greater flexibility of ideas, greater innovation, greater exchange of experiences, which guarantees greater team engagement, greater possibility of designing solutions and greater efficiency in organizational processes.
The required investment cost of a new, large shopping center is $49 million. The salvage value of the project is estimated to be $20 million (the value of the land). The project's life is 15 years and the annual operating expenses are estimated to be $14 million. The MARR for such projects is 15% per year. What must the minimum annual revenue be to make the shopping center a worthwhile venture?
Answer:
The minimum annual revenue is 22.38 million.
Explanation:
Let the minimum annual revenue = X
Therefore,
The present value of cash inflows = Present value of cash outflows
X (P/A,15%,15) + 20 (P/F,15%,15)= 49*1 + 14(P/A,15%,15)
Now look into the annuity table or compound interest factor table and use that values to solve the equation.
X(5.847) + 20 (0.1229) = 49 + 14 (5.847)
X(5.847) = 130.858
X = 130.858 / 5.847
X = 22.38 millions
The minimum annual revenue = 22.38 million.
Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Harry Basis Fair Market Value Cash $30,000 $30,000 Land 100,000 120,000 Totals $130,000 $150,000 Sally: Equipment used in a business 200,000 150,000 Totals $200,000 $150,000 Required:a. How much gain or loss will Harry recognize on the contribution? b. How much gain or loss will Sally recognize on the contribution? c. How could the transaction be structured a different way to get a better result for Sally? d. What is Harry's tax basis in his partnership interest? e. What is Sally's tax basis in her partnership interest? f. What is Evergreen's tax basis in its assets? e. Prepare a tax basis balance sheet for the Evergreen partnership showing the tax basis capital accounts for the partners.
Answer:
a. Harry will recognize $0.
b. Sally will also recognize $0.
c. By selling the equipment to an unrelated party and by contributing $150,000 to the partnership instead.
d. Harry's tax basis in his partnership interest is $130,000.
e. Sally's tax basis in her partnership interest is $200,000
f. Evergreen's tax basis in its assets is $330,000
g. Total assets = Total Capital = $330,000
Explanation:
Note: The data in the question are merged together and they are first sorted before answering the questions as follows:
Harry: Basis Fair Market Value
Cash $30,000 $30,000
Land 100,000 120,000
Totals $130,000 $150,000
Sally:
Equipment used in a business 200,000 150,000
Totals $200,000 $150,000
The explanations to the answers are now provided as follows:
a. How much gain or loss will Harry recognize on the contribution?
Harry will recognize $0 because he did not have any debt relief.
The reason is that gain on property contributed by a partner to a partnership will be recognized only when the debt relief they seemed to have received is greater than their basis in the partnership before the distribution.
Since Harry did not have any debt relief, he will therefore recognize $0.
b. How much gain or loss will Sally recognize on the contribution?
Sally will also recognize $0.
It is possible that when partners contributes property to a partnership, loss may not be recognized even if they have debt relief. Therefore, it not in all cases that loss are recognized.
c. How could the transaction be structured a different way to get a better result for Sally?
This transaction could be structured differently if Sally decides to sell the equipment to an unrelated party and then make a cash contribution of $150,000 to the partnership instead of contributing the equipment. As a result of this, it will be possible for Sally to recognize the built-in loss on the equipment by selling it.
d. What is Harry's tax basis in his partnership interest?
The basis of Harry in his partnership interest can be obtained by adding his contribution of cash and land to the partnership as follows:
Harry's tax basis = $30,000 + $100,000 = $130,000.
Therefore, Harry's tax basis in his partnership interest is $130,000.
e. What is Sally's tax basis in her partnership interest?
This is simply the amount of her contribution of $200,000 basis in the equipment.
Therefore, Sally's tax basis in her partnership interest is $200,000.
f. What is Evergreen's tax basis in its assets?
This can be calculated by adding the Harry's basis in cash and land of $30,000 and $100,000 respectively together with Sally's basis in equipment of $200,000 as follows:
Evergreen's tax basis in its assets = $30,000 + $100,000 + $200,000 = $330,000
Therefore, Evergreen's tax basis in its assets is $330,000.
e. Prepare a tax basis balance sheet for the Evergreen partnership showing the tax basis capital accounts for the partners.
This can be prepared as follows:
Evergreen partnership
Tax Basis Balance Sheet
Particulars Amount ($)
Assets:
Cash 30,000
Equipment 200,000
Land 100,000
Total Assets 330,000
Capital:
Harry's Capital (w.1) 130,000
Sally's Capital (w.2) 200,000
Total Capital 330,000
Workings:
w.1: Harry's Capital = Cash contributed + Land contributed = $30,000 + $100,000 = $130,000
w.2: Sally's Capital = Equipment contributed = $200,000
Project A Project B
Time 0 -10,000 -5,000
Time 1 4,000 3,000
Time 2 3,000 2,000
Time 3 10,000 2,000
If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest?
a) Project A
b) Project B
c) Project A and B have the same ranking
d) Cannot calculate a payback period without a discount rate
Answer: b) Project B
Explanation:
Payback period works by checking how long it will take a project to pay back the initial amount invested in it. Project A.
Project A
Payback Period = Year before Payback happens + Amount left till payback/Cash inflow in year of payback
= Time 1 + Time 2
= 4,000 + 3,000
= $7,000
This amount is not enough to cover the investment of $10,000 so the investment will be paid in Time 3 and remains $3,000.
= 2 + 3,000/10,000
= 2.3 Times
Project B
= Time 1 + Time 2
= 3,000 + 2,000
= $5,000
At the end of Time 2, Project B has paid off its initial investment of $5,000. Its Payback period is 2 Times. This is lower than Project A so this project will rank higher.
Duerr company makes a $73,000, 90-day, 10% cash loan to Ryan Co. The maturity value of the loan is: (Use 360 days a year.)
Answer: $74,825
Explanation:
Maturity value is the amount that a borrower will pay to the lender when the loan matures.
Based on the above analysis, the interest will be:
= $73,000 × 10% × 90/360
= $73,000 × 0.1 × 0.25
= $1825
Maturity value will now be the addition of the principal and the interest. This will be:
= $73,000 + $1825
= $74,825
Manufacturing overhead—multiple application bases Staley Toy Co. makes toy flutes. Two manufacturing overhead application bases are used; some overhead is applied on the basis of machine hours at a rate of $5.60 per machine hour, and the balance of the overhead is applied at the rate of 240% of direct labor cost.
Required:
a. Calculate the cost per unit of October production of 4,200 toy flutes that required
1. Raw materials costing $490.
2. 21 direct labor hours costing $357.
3. 36 machine hours.
b. At the end of October, 3,870 of these toy flutes had been sold. Calculate the ending inventory value of the toy flutes still in inventory at October, 31.
Answer:
a. $ 0.45
b. $148.50
Explanation:
Production Cost Schedule for 4,200 toy flutes
Raw materials costing $490.00
Direct Labor $357.00
Overheads ($5.60 × 36) $201.60
Overheads ($357 × 240%) $856.80
Total Cost $1,905.40
Cost per unit = Total Cost / Total Number of Units produced
= $1,905.40 / 4,200
= $ 0.45
Closing Inventory = Units Left × Cost per unit
= (4,200 - 3,870) × $ 0.45
= 330 × $ 0.45
= $148.50
Describe various ways that knowledge management systems could help firms with sales and marketing or with manufacturing and production.
Answer:
Please see explanation below.
Explanation:
Knowledge management system is a system that allows sales people have quick and right information about a company's value proposition without having to wait for feedback from team members or someone else in the company. An advantage of knowledge management system is the ability to train many employees remotely or places where they may be needed.
Various ways ways that knowledge management system could help sales and marketing.
•Getting sales people on the same page. A company's sales team should understand the value propositions of their firm and how such values distinct them from the competitors. Each sales member should be acquitted with the knowledge management system which provides an easily accessible place for the company's value proposition. It also means that the values should readily be known and understood by everyone and are able to apply them according to how situations demands.
• Allowing to refine and deliver a better training process. This explain that knowledge management system can assist in terms of tracking questions frequently asked by sales people , contents mostly assessed by them and activities often carried out by top sales person that bring about the best result. All the information gathered including possible answers and training contents can then be loaded into the knowledge management system to help train new hires.
• Helping to track valuable insights and information. Prospects and customers usually give useful feed back which can assist a sales team and sales representative handles future sales opportunities. It is not enough capturing these information on the knowledge management system, they should be properly organized and accessible for other team members to benefit .
• Making it easier for sales and marketing to help each other. An important part of marketing team's task is to understand the challenges faced by the target audience and the questions prospects commonly ask so as to create relevant contents for them and also upload them on the knowledge management system portal. Such information should be often accessed by the team and then take better advantage of it.
Other areas knowledge management system could help sales and marketing are assistance with sales trend, high level decisions with regards to product orders, price negotiations . etc
Which of the following statements about executing and evaluating the promotion program is most accurate?
a. Although there are five elements in the promotional mix, the only element that reallybenefits from an IMC audit is advertising.
b. Most IMC programs have no difficulty creating a pretest, but posttests are much moredifficult to construct since a number of unknown elements must be measured.
c. To fully benefit from IMC programs, companies must create and maintain a test-resultdatabase that allows comparisons of the relative impact of the promotional tools and theirexecution options in varying situations.
d. The ideal IMC program does not need any evaluation if it is executed according to plan.E. The most effective IMC audits are external. Internal audits tend to skew results to fitexpectations.
Answer: To fully benefit from IMC programs, companies must create and maintain a test-resultdatabase that allows comparisons of the relative impact of the promotional tools and their execution options in varying situations.
Explanation:
Out of the statements about executing and evaluating the promotion program that were given in the question, the option that is most accurate is that to fully benefit from IMC programs, companies must create and maintain a test-result database that allows comparisons of the relative impact of the promotional tools and their execution options in varying situations.
Therefore, option C is the correct answer.
Bob: Listen, donuts are made to bring joy into our lives and to wake up our glazed faculties. Just let them be distributed according to unchanging moral principles of justice. The donuts will distribute themselves according to natural principles. We just take what we want and the leftovers will be appreciated by those who enjoy them most. Don't overcomplicate this. Where's the chocolate milk? End Part 2
Answer:
National law school of thought
Explanation:
The natural law school of thoughts refers to analyze the behavior of humans also it figured out the moral rule occurs from the behaviors.
It is inherent laws that are applied to all societies, communities, etc also it is common for all whether it is mentioned or officially announced
It should be rational and reasonable too
Therefore the given scenario represents the National law school of thought
A firm recently reported EBITDA of $3.95 million, depreciation of $1.20 million, and had a tax rate of 40%. The firm's expenditures on fixed assets and net operating working capital totaled $1.2 million. How much was its free cash flow, in millions
Answer:
Free cash flow=$2.37
Explanation:
Calculation for how much was its free cash flow, in millions
Using this formula
Free cash flow =[ (Operating income * (1- tax rate) + Depreciation- Expenditures on fixed assets and net operating working capital]
Where,
Operating income =$3.95
(1- tax rate) = (1 - .40)
Depreciation=$1.20
Expenditures on fixed assets and net operating working capital=$1.2
Let plug in the formula
Free cash flow = [($3.95 * (1 - .40) + $1.20 - $1.2]
Free cash flow=$3.95*0.60+$1.20-$1.2
Free cash flow=$2.37+$1.20-$1.2
Free cash flow=$3.57-$1.2
Free cash flow=$2.37
Therefore the amount of its free cash flow, in millions will be $2.37
Which of the following is a drawback faced by multinational enterprises (MNEs)pursuing an international strategy?
a. They cannot leverage their home-based core competencies in foreign markets.
b. They are highly affected by exchange rate fluctuations.
c. They have to be highly responsive to local needs and preferences.
d. They cannot reap the benefits of economies of scale due to their highly customized products.
Answer:
Option b. They are highly affected by exchange rate fluctuations.
Explanation:
international strategy can be defined simply as the means or strategy by which a firm sells its goods and services outside its domestic market. they helps by enabling firms to leverage their home-based core competencies in foreign markets.
A multinational enterprise (MNE) can be said to be a company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries and it can only pursue international strategy if only when it enjoys a large domestic market, strong reputation, and brand name. exchange rate fluctuations affects MNE pursuit of international strategy.
On March 15, a fire destroyed Sheridan Company's entire retail inventory. The inventory on hand as of January 1 totaled $5900000. From January 1 through the time of the fire, the company made purchases of $2032000, incurred freight-in of $242000, and had sales of $4140000. Assuming the rate of gross profit to selling price is 20%, what is the approximate value of the inventory that was destroyed
Answer:
the approximate value of the inventory that was destroyed is $4,862,000.
Explanation:
Use the Gross Profit percentage to find the value of the inventory that was destroyed.
Sales $4,140,000
Less Cost of Goods Sold
Opening Inventory $5,900,000
Add Purchases $2,032,000
Add Freight In $242,000
Available $8,174,000
Less Inventory Lost ($4,862,000)
Cost of Sales (3,312,000)
Gross Profit at 20% $828,000
Conclusion :
The Value of inventory that was destroyed is $4,862,000.
A company is considering expanding their production capabilities with a new machine that costs $38,000 and has a projected lifespan of 8 years . They estimate the increased production will provide a constant $5,000 per year of additional income . Money can earn 1.7% per year, compounded continuously . Should the company buy the machine
Answer:
the company should not buy the machine.
Explanation:
Given that:
cost of the new machine = $38000
lifespan = 8 years
constant income = 5,000
Interest = 1.7%
no of days = 365
The value of earning at the time of buying can be calculated as follows:
[tex]= \dfrac{5000}{(1+ \dfrac{1.7}{100})^8}+ \dfrac{5000}{(1+ \dfrac{1.7}{100})^7}+\dfrac{5000}{(1+ \dfrac{1.7}{100})^6}+...+ \dfrac{5000}{(1+ \dfrac{1.7}{100})^0}[/tex]
[tex]= 5000 \begin {pmatrix} \dfrac{1}{(1.017)^8}+ \dfrac{1}{(1.017)^8}+\dfrac{1}{(1.017)^6}+...+ 1} \end {pmatrix}[/tex]
Sum of a Geometric progression [tex]S=a \dfrac{(r^n -1)}{(r-1)}[/tex]
[tex]S=(\dfrac{1}{1.017})^8 \dfrac{((1.017)^9 -1)}{(1.017-1)}[/tex]
[tex]S= \dfrac{((1.017)^9 -1)}{ (1.017)^8(0.017)}[/tex]
S = 8.4211
The value of earning at the time of buying = (5000 × 8.4211)-$5000
The value of earning at the time of buying = $42105.5 -$5000
The value of earning at the time of buying = $37105.5
The Machine price = $38000
If the value - Machine price > 0, then the company should buy the machine
∴
= $ 37105.5 - $38000
= -$ 894.5
Since the value is negative which is less than zero, then the company should not buy the machine.
The company should not buy the machine since it earns a negative NPV of $894.25.
Data and Calculations:
Cost of machine in present value = $38,000
Projected lifespan = 8 years
Additional annual income = $5,000
Compound interest rate = 1.7%
Present value annuity factor for 1.7% for 8 years = 0.13475
Present value of annual income = $37,105.75 ($5,000/0.13475)
Net present value = -$894.25 ($38,000 - $37,105.75)
Learn more: https://brainly.com/question/19131462
An aircraft company has an order to refurbish the interiors of 18 jet aircraft. The work has a learning curve percentage of 80. On the basis of experience with similar jobs, the industrial engineering department estimates that the first plane will require 300 hours to refurbish. Estimate the amount of time needed to complete:
a. The fifth plane
b. The first five planes
c. All 18 planes
Answer:
a. 125.43 hours
b. 767.92 hours
c. 2,129.04 hours
Explanation:
Using the mathematical approach, we have :
y = ax ^b
Where ,
y is the average time to manufacture x units
a is the time its takes to manufacture first plane
b is the log of 80% divided by log 2
Then,
Average time for 5 planes = 300 (5)^-0.322
= 178.67 hours
Total time for 5 planes = 178.67 hours × 5
= 893.35
Average time for 4 planes = 300 (4)^-0.322
= 191.98 hours
Total time for 5 planes = 191.98 hours × 4
= 767.92 hours
The fifth plane would take = 893.35 - 767.92
= 125.43 hours
Average time for the 18 planes = 300(18)^-0.322
= 118,28 hours
Total time for 18 planes = 118,28 hours × 18
= 2,129.04 hours
The next dividend payment by Hoffman, Inc., will be $2.90 per share. The dividends are anticipated to maintain a growth rate of 4.75 percent forever. If the stock currently sells for $49.40 per share, what is the required return? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
10.6%
Explanation:
Calculation for the required return
Using this formula
Required return=(Dividend payment/Stock per share)+Anticipated growth rate
Let plug in the formula
Required return =($2.90 per share/$49.40 per share)+0.0475
Required return=0.05870+0.0475
Required return =0.106*100
Required return =10.6%
Therefore the Required return will be 10.6%
A factory costs $400,000. It will produce an inflow after operating costs of $100 000 in year 1. $ 200,000 in year 2, and $ 300,000 in year 3. The opportunity cost of capital is 12%. Calculate NPV.
Answer:
NPV = $62,258.56
Explanation:
initial outlay year 0 = $400,000
cash inflow year 1 = $100,000
cash inflow year 2 = $200,000
cash inflow year 3 = $300,000
discount rate = 12%
using a financial calculator, NPV = $62,258.56
if you do it by hand:
NPV = -$400,000 + $100,000/1.12 + $200,000/1.12² + $300,000/1.12³ = -$400,000 + $89,285.71 + $159,438.78 + $213,534.07 = $62,258.56
Smathers Corp. stock has a beta of 1.23. The market risk premium is 7.00 percent and the risk-free rate is 2.86 percent annually. What is the company's cost of equity?
Answer:
the company's cost of equity is 11.47 %.
Explanation:
The Company`s cost of equity is the return that is required by holders of Common Stocks.
The Cost can be determined using the Capital Asset Pricing Model (CAPM) as follows :
Cost of Equity = Return on Risk Free Rate + Beta × Return on Market Portfolio
= 2.86 % + 1.23 × 7.00 %
= 11.47 %.
Suppose a period of continuous political instability leads to people to believe that the economy will slide into a deep recession. As a result, people become more likely to accept ________ money in exchange for goods and services.
A. Flat
B. Commodity
U.S. Dollars are an example of _____ money.
A. Flat
B. Commodity
Answer:
The answer is:
1. Commodity
2. Fiat
Explanation:
We have two questions here.
First, the answer is commodity money. Commodity money is the type of money whose value are tied to the commodity it is made up of. This is used as a medium of exchange when the value of money falls totally (during inflation or hyperinflation.) Examples of commodity money can be gold, cocoa,copper etc.
Second question. The answer is fiat money. Fiat money is the currency issued by the national government of a country through The Fed(in US) or Central banks (in most countries).
The fiat money in US is the US dollar, for Nigeria is Nigerian naira etc. It is a legal tender in those countries.
Hawk Corporation purchased 10,000 Diamond Corporation bonds in 2015 for $55 per bond and classified the investment as securities available for sale. The value of the Diamond investment was $85 per bond on December 31, 2016, and $97 on December 31, 2017. During 2018, Hawk sold all of its Diamond investment at $147 per bond. In its 2018 income statement, Hawk would report:_________.
Answer:
Gain of $920,000
Explanation:
Calculation for what Hawk would report In its 2018 income statement.
First step is the adjustment of Hawk accumulation of unrealized holding gain and fair value for 205-2017
Unrealized holding gain and fair value Adjustment=($97- 55) × 10,000 shares
Unrealized holding gain and fair value Adjustment=$42×10,000 shares
Unrealized holding gain and fair value Adjustment= $420,000
Second step is to find the additional increase that occurred in 2018
Additional increase=($147-$97)×10,000 shares
Additional increase=50×10,000 shares
Additional increase =$500,000
Last step is to find the total gain realized in the income statement
Total gain realized=$500,000+$420,000
Total gain realized=$920,000
Therefore what Hawk would report In its 2018 income statement will be a gain of $920,000
