Drew and Tammy decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered

Answers

Answer 1

Answer: a down payment or deposit

Explanation:

Answer 2

Drew and Tammy decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered as equity capital.

What do you mean by Business?

The exchange, acquisition, sale, or creation of goods and services with the aim of making money and meeting client demands constitutes business. Businesses can be for-profit or nonprofit entities that work to further a social cause or make a profit, respectively.

Equity in the context of finance refers to ownership of assets with potential obligations such as debts. For accounting reasons, equity is calculated by deducting liabilities from the value of the assets. The difference of $14,000, for instance, is equity if a person owns a car worth $24,000 and owes $10,000 on the loan used to purchase the vehicle.

A single asset, like a car or house, or an entire company may be covered by equity. A company that needs to launch or grow its operations can sell equity to raise money that doesn't need to be repaid on a predetermined timeline.

Therefore, The money will be considered as Equity capital.

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Related Questions

You are in the business of making kombucha tea. Your variable costs to produce each bottle is $1. Your fixed costs are $100,000/year and you expect to sell 300,000 bottles in your first year. How many bottles must you sell at $3/bottle to cover your fixed costs and earn your target profit of $100,000

Answers

Answer:

Break-even point in units= 100,000 units

Explanation:

Giving the following information:

Your variable costs to produce each bottle is $1.

Your fixed costs are $100,000/year.

How many bottles must you sell at $3/bottle to cover your fixed costs and earn your target profit of $100,000

To calculate the number of units to be sold, we need to use the following formula:

Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit

Break-even point in units= (200,000) / (3 - 1)

Break-even point in units= 100,000 units

The number of bottles that must be sold at $3 per bottle to earn a target profit of $100,000 is 200,000 bottles.

Data and Calculations:

Variable cost per bottle = $1

Fixed cost per year = $100,000

Expected sales units in the first year = 300,000 bottles

Selling price per bottle = $3

Target profit = $300,000

Contribution margin per unit = $2 ($3 - $1)

Contribution margin ratio = 67% ($2/$3 x 100)

Sales units to achieve target profit =  (Fixed Costs + Profit)/$2

= ($100,000 + $300,000)/$2

= 200,000 bottles

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rdier attached to a life insurance policy that provides coverage on the insureds family members is called the

Answers

Answer: Other insured rider

Explanation:

The rider that is attached to a life insurance policy that provides coverage on the insureds family members is referred to as the other insured rider.

When more than one member of a particular family is to be provided insurance for, this type of rider is typically used.

Calculate the effective annual interest rate for the following: a. A 3-month T-bill selling at $97,820 with par value $100,000. (Round your answers to 2 decimal places.) b. A 8% coupon bond selling at par and paying coupons semiannually.

Answers

Answer:

A.9.2%

B.8.16%

Explanation:

a. Calculation for the Effective annual rate on three-month T-bill

First step

T-bill =(Par value-Selling amount)/Par value

Let plug in the formula

T-bill =($100,000-$97,820)/$97,820

T-bill =$2,180/$97,820

T-bill =0.02228

Now let calculate for the Effective Annual Interest rate

Effective Annual Interest rate = (1 + 0.02228)^4– 1

Effective Annual Interest rate = (1.02228)^4-1

Effective Annual Interest rate =1.0921-1

Effective Annual Interest rate =0.0921×100

Effective Annual Interest rate=9.2%

B. Calculation for the effective annual interest rate for A 8% coupon bond .

First step

Semi-annual return=8%/2

Semi-annual return=4%

Second step is to calculate for the effective annual interest rate

Using this formula

Effective annual interest rate =(1+Semi-annual return percentage)^2-1

Let plug in the formula

Effective annual interest rate=(1+0.04)^2-1

Effective annual interest rate=(1.04)^2-1

Effective annual interest rate=1.0816-1

Effective annual interest rate=0.0816×100

Effective annual interest rate=8.16%

Therefore the Effective annual rate on three-month T-bill will be 9.2% while that of coupon bond is 8.16%

.

You are the international manager of a US business that has just invented a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design of this computer. Your CEO has asked you to formulate a recommendation for how to expand into China. Evaluate the pros and cons of each alternative and suggest a course of action to your CEO (15 Points)

Answers

Answer:

1. Pro-Maintain tight oversight of technologies and manufacturing methods, build American employment that improve domestic reputation, and theoretically gain tax cuts.

2.  Pro-Less start-up charges wanting to work to current manufacturers, possibly avoiding import-related taxes / punishments, and potentially taking advantage of brand recognition as well as financial acumen.

1. Con-Possibly increasing labour charges, logistics and delivery costs, customs duties or punishments on entry into the western europe territory , market stimulation expenses.

2. Con-Less power over production cycle and efficiency, knowledge sharing, less efficient workers.

The EOQ model assumes inventory: Multiple Choice can be delivered immediately upon order. is sold at a steady rate until it is depleted. will be available just as it is needed for production. is held at a constant level. has seasonal fluctuations.

Answers

Answer:

is sold at a steady rate until it is depleted

Explanation:

The EOQ means Economic order quantity that refers to a quantity which the company should purchase for its inventory

In this order quantity, the carrying cost and the ordering cost are equivalent to each other

Also we assume that the demand would remain the same and the inventory should be depleted at a fixed rate unless it reaches to a zero

Hence, the second option is correct

Why might an economist favor activist policies in developed countries and laissez-faire policies in developing countries

Answers

Answer:

One of the main economic issues in developing countries is rampant corruption or extremely inefficient government institutions. This means that less government intervention is always better in developing countries.

On the other hand, in developed countries, the checks and balances system exists within government institutions and even though corruption may exist, it is not as widely spread. The most severe economic problem in developed countries is inequality and huge economic actors. This is why activist policies may be necessary in developed countries, at least in certain economic sectors.

Suppose the benefit of owning a painting, in terms of your personal enjoyment, is worth 5% of the value of the painting. If the expected rate of return on stocks is 7%, then the painting should grow in value by _________ per year.

Answers

Answer:

7%

Explanation:

It would grow by 7% each year which is the rate of return on stocks

Since the expected rate of return is 7%, then, the painting should grow in value by 2% per year.

Given Information

Expected rate of return = 7%

Present rate of return = 5%

Growth rate = Expected rate of return - Present rate of return

Growth rate = 7% - 5%

Growth rate = 2%

In conclusion, the painting should grow in value by 2% per year.

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The Janjua Company had the following account balances at 1/1/18: Common Stock $65,000 Treasury Stock (at cost) 13,400 Paid-in-Capital in Excess of Par 82,000 Investments in AFS Debt Securities 40,000 FVA (AFS) 1,500 credit Retained Earnings 22,000 On that date, the Accumulated OCI account was at its proper balance. There were no sales or purchases of Common Stock or Investments during 2018. Prior to any adjusting journal entries related to the investments, 2018 Net Income was $10,300. No other transactions affecting Retained Earnings occurred. Fair Value of the Investments at 12/31/2018 was $40,000.Required:a. Prepare the 12/31/18 journal entry to adjust the investment to fair value.b. Prepare the complete 12/31/18 Equity section of the balance sheet.

Answers

Answer:

The Janjua Company

a) Journal Entry:

Debit FVA (AFS) $1,500

Credit Unrealized Gain on Investments $1,500

To record the unrealized gain on AFS investment.

b) Equity Section of the Balance Sheet as of December 31, 2018:

Common Stock                                $65,000

Treasury Stock (at cost)                     (13,400)

Paid-in-Capital in Excess of Par         82,000

Retained Earnings                              32,300

Total Stockholders' Equity             $165,600

Explanation:

Retained Earnings:

1/1/18 = $22,000

Net income = $10,300

12/31/18 = $32,300

FVA = The Janjua Company's Funding Valuation Adjustment is the contra account of Investments where The Janjua Company adjusts the value of investments at the end of the account period.  When the value of the investment reaches $40,000, the unrealized gain is debited to the FVA account.  This effectively reverses the credit balance and restores the investments to the adjusted balance of $40,000.

Company manufactures two products. Both products have the same sales​ price, and the volume of sales is equivalent.​ However, due to the difference in production​ processes, Product A has higher variable costs and Product B has higher fixed costs. Management is considering dropping Product B because that product line has an operating loss.


Total Product A Product B
Sales Revenue $140,000 $70,000 $70,000
Variable Costs 124,250 63,500 60,750
Contribution Margin 15,750 6,500 9,250
Fixed Costs 30,000 3,000 27,000
Operating Income/(Loss) $(14,250) $3,500 $ (17,750)


Required:
a. If fixed costs cannot be avoided, should Richardson drop Product B? Why or why not?
b. If 50% of Product B's fixed costs are avoidable, should Richardson drop Product B? Why or why not?

Answers

Answer:

a. No - Because Richardson will be worse off than what he was before.

b. Yes - Because Richardson will be better off than what he was before.

Explanation:

a. Analysis of Operating Income is Richardson drop Product B

Sales Revenue                  $70,000

Less Variable Costs        ($63,500)

Contribution                        $6,500

Fixed Costs                      ($30,000)

Total Operating Income  ($23,500)

Dropping Product B will result in Total Operating Loss of $23,500. This means Richardson will be worse off than what he was before. He should not drop the product in this case.

b. Analysis of Operating Income is Richardson drop Product B

Sales Revenue                  $70,000

Less Variable Costs        ($63,500)

Contribution                        $6,500

Fixed Costs                      ($15,000)

Total Operating Income   ($8,500)

Dropping Product B will result in Total Operating Loss of $8,500. This means Richardson will be better off than what he was before. He should  drop the product in this case.

You are considering purchasing one of two assets. Asset 1 has payments of 5,000 at the end of year 1, 10,000 at the end of year 3, and 15,000 at the end of year 5. The price for Asset 1 today is 26,000. Asset 2 has payments of 12,000 at the end of year 4 and 20,000 at the end of year 5. The price of the asset 3 years from now is 29,500. If the current spot curve is below, what is the one year forward rate, deferred three years? Term 1 2 3 4 5 Spot Rate 3.00% 3.40% s3 s4 4.25%

Answers

Answer:

hello attached below are the missing option related to your question

5.45% ( D )

Explanation:

Given data:

for asset 1

cost of asset = $26000

Year 1  payments = $5000, year 3 = $10000, year 5 = $15000

For asset 2

cost of asset 2 three years from now  = $29500

year 4 payments = $12000, year 5 payments = $20000

Calculate the one year forward rate deferred three years

find the value of  [tex](1+s3)^3[/tex] using asset 1

2600 (cost of asset now )  = 5000/ (1.03 +10000) / ((1 +s3)^3 +15000))/ 1.0425^5

from the above equation

(1 +s3)^3 = 1.11559

Now to get the one year forward rate deferred three years we determine that value using asset 2

29500 = 12000 / (1+1 year rate deferred for 3 years) + 220000/(1.0425^5/(1+s3)^3)

hence ( 1 + 1 year rate deferred for three years )

= 12000/(29500-20000)/(1.0425^5)*1.11559)

= 12000/(9500)/(1.0425^5)*1.11559

1 year rate deferred for three years = 5.447% ≈ 5.45%

On January 1, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $3,400,000. The bonds pay interest semiannually. The market rate of interest is 10.0% and the bond selling price was $3,168,967. The bond issuance should be recorded as:

Answers

Answer:

January 1

Cash                                           $3168967 Dr

Discount on Bonds Payable    $231033

            Bonds Payable                        $3400000 Cr

Explanation:

The issuance of bond on January 1 is at a discount as the coupon rate paid by the bond is less than the market interest rate. In such case the bond is issued at a lower value than its par/face value. The discount on bonds payable is the difference between the face value and the cash received on issuance.

The entry to record the issues include a debit to cash account as cash is received, a debit to the discount on bonds payable account for the amount of discount and a credit to bonds payable account as liability is created as a result of the issuance of the bonds.

Discount = 3400000 - 3168967 = 231033

Lacy Technology transferred items with $12,600 of cost out of the Assembly Department because the items were finished and ready to be sold. What journal entries correctly reflects this transaction?

Answers

Answer:

Dr Finished Goods Inventory 12,600

Cr Work in Process - Assembly 12,600

Explanation:

Based on the information given we were told that the company transferred items that cost the amount of $12,600 from the Assembly Department because the items were finished and ready to be sold which means that the journal entries will be recorded as:

Dr Finished Goods Inventory 12,600

Cr Work in Process - Assembly 12,600

ABC uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $393,500 ($594,000), purchases during the current year at cost (retail) were $3,408,000 ($5,193,600), freight-in on these purchases totaled $159,500, sales during the current year totaled $4,666,000, and net markups were $414,000. What is the ending inventory value at cost

Answers

Answer:Ending Inventory at Cost= $981,248.40

Explanation:

                                     Cost                      Retail

Beginning inventory  $393,500         $594,000

purchases                      $3,408,000      $5,193,600                

freight in                        $159,500,

net markups                                                     $414,000

Total                          $3,961,000                     $6,201,600

Sales                                                 $4,666,000

Ending Inventory at Retail:=(Beginning inventory + purchases +net markups - Sales during the current year

594,000 + $5,193,600   +  $414,000- $4,666,000,  = $1,535,600

Cost to Retail Ratio:( Beginning inventory + purchases+freight in)/ (Beginning inventory + purchases +net markups )

=($393,500 + $3,408,000 +$159,500,) ÷ (594,000 + $5,193,600   +  $414,000) =$3,961,000/$6, 201, 600= 0.638= 0.639

Ending Inventory at Cost:   Ending Inventory at Retail x Cost to Retail Ratio

$1,535,600 x 0.639 = $981,248.40

On January 1, a company issues bonds dated January 1 with a par value of $390,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $405,830. The journal entry to record the issuance of the bond is: Multiple Choice Debit Bonds Payable $390,000; debit Bond Interest Expense $15,830; credit Cash $405,830. Debit Cash $405,830; credit Bonds Payable $405,830. Debit Cash $405,830; credit Premium on Bonds Payable $15,830; credit Bonds Payable $390,000. Debit Cash $405,830; credit Discount on Bonds Payable $15,830; credit Bonds Payable $390,000. Debit Cash $390,000; debit Premium on Bonds Payable $15,830; credit Bonds Payable $405,830.

Answers

Answer:

The journal entry to record issuance is:

January 1, 202x, bonds are issued at a premium

Dr Cash 405,830

    Cr Bonds payable 390,000

    Cr Premium on bonds payable 15,830

Explanation:

When a bond's coupon rate is higher than the market rate, the bonds will sell at a premium or a value higher than the bond's face value. On the other hand, if the bond's coupon rate is lower than the market rate, the bonds will sell at a discount or a value lower than the bond's face value.

TB MC Qu. 7-137 Farris Corporation, which has ... Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 144 Units in beginning inventory 0 Units produced 9,350 Units sold 8,950 Units in ending inventory 400 Variable costs per unit: Direct materials $ 26 Direct labor $ 68 Variable manufacturing overhead $ 14 Variable selling and administrative expense $ 18 Fixed costs: Fixed manufacturing overhead $ 140,250 Fixed selling and administrative expense $ 9,600 What is the net operating income (loss) for the month under variable costing

Answers

Answer:

Net operating income= $11,250

Explanation:

Giving the following information:

Selling price $144

Units sold 8,950

Variable costs per unit:

Direct materials $26

Direct labor $68

Variable manufacturing overhead $14

Variable selling and administrative expense $18

Total variable cost= $126

Fixed costs:

Fixed manufacturing overhead $140,250

Fixed selling and administrative expense $9,600

Variable costing income statement:

Sales= 8,950*144= 1,288,800

Total variable cost= (126*8,950)= (1,127,700)

Contribution margin= 161,100

Fixed manufacturing overhead= (140,250)

Fixed selling and administrative expense= (9,600)

Net operating income= 11,250

Additional short-term borrowings $ 20,000
Purchase of short-term investments 5,000
Cash dividends paid 16,000
Interest paid 8,000
Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)

Answers

Answer:

Cash flow from from financing activities = $(4,000)

Explanation:

The cash flow from financing activities includes that entails any or a combination of the following; issuance and redemption of stocks , issuance and redemption of debts and payment of interest and/or dividend, and receipt of dividend and or interest.

Kindly note that the purchase of short term investment is not a financing activity but rather an investing activity

Cash flow                              $

Short term borrowing          20,000

Cash dividend paid              (16,000)

Interest paid                          (8,000)

Total Cash flow                      (4000)

Cash flow from from financing activities = $(4,000)

Which of the following countries would likely have the greatest success is exporting television and other media to Mexico?

a. Brazil
b. Canada
c. Japan
d. Spain

Answers

Answer:

d. Spain

Explanation:

The country that would have the greatest success in doing this would be Spain. This is mainly due to the fact that Mexico's main language is Spanish just like in Spain (even though the dialect is different). The other countries listed all speak different languages which will not fair well with Mexican audiences since they will not understand the media. In Brazil, they speak Portuguese. In Canada, they speak English. In Japan, they speak Japanese.

The stock pays a dividend of $2 per year and its price is $80. If the market return is 7% and the risk-free rate is 1%, what is the stock beta? A. 0.4 B. 0.5 C. 0.25 D. 0.1

Answers

Answer:

The beta of the stock is 0.25 and option C is the correct answer.

Explanation:

The current price of a stock which pays a constant dividend can be determined using the zero growth dividend model of DDM. The formula to calculate the price under this model is,

P0 = Dividend / r

Where,

r is the required rate of return on the stock

As we already know the value of P0 and Dividend, we can plug in these values in the formula and calculate the value of r.

80 = 2 / r

80 * r = 2

r = 2 / 80

r = 2.5% or 0.025

The required rate of return can also be calculated using the CAPM equation. The formula for r under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free raterM is the return on market

To calculate beta, we will input the values for r, rRf and rM in the CAPM equation.

Let beta be x.

0.025 = 0.01 + x * (0.07 - 0.01)

0.025 - 0.01 = x * 0.06

0.015 / 0.06 = x

x = 0.25

Thus, beta is 0.25

Rinaldo wants to know how you recorded the part cash and part credit purchase that occurred during the beginning of May in Sage 50. Rinaldo asks which of the following shows the correct series of actions to open a Sage 50 window that must be used to record the above transaction:

Inventory & Services → Enter Bills → New Bill
Inventory & Services → Purchase Invoice → New Invoice
Vendors & Purchases → Enter Bills → New Bill
Vendors & Purchases → Purchase Invoice → New Invoice

Answers

Answer:

Vendors & Purchases → Enter Bills → New Bill

Explanation:

To record the part cash and part credit entry in Sage 50, we will use the following series.

Vendors & Purchases → Enter Bills → New Bill

To record the purchase transaction we need to enter the transaction in the vendors and purchase option and then we need to create separate bills for our part cash payment and part credit payment separately.

You purchased a stock at a price of $46.55. The stock paid a dividend of $1.79 per share and the stock price at the end of the year is $52.45. What was the dividend yield

Answers

Answer:

3.84%

Explanation:

Calculation for dividend yield

Using this formula

Dividend Yield(%) = D / P0

Where,

D=$1.79

P0=$46.55

Let plug in the formula

Dividend Yield(%) =$1.79/$46.55

Dividend Yield(%) =0.0384*100

Dividend Yield(%) =3.84%

Therefore the dividend yield will be 3.84%

Carlos and Deborah are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and corn on the rest.


Rye Corn
(Bushels per acre) (Bushels per acre)
Carlos 18 6
Deborah 28 7

___________ has an absolute advantage in the production of rye, and _________ has an absolute advantage in the production of corn. Carlos's opportunity cost of producing 1 bushel of corn is___________ bushels of rye, whereas Deborah's opportunity cost of producing 1 bushel of corn is ___________ bushels of rye. Because Carlos has a ___________ opportunity cost of producing corn than Deborah,____________ has a comparative advantage in the production of corn, and____________ has a comparative advantage in the production of rye.

Answers

Answer:

Deborah

Deborah

3

4

lower

Carlos

Deborah

Explanation:

a person has comparative advantage in production if he / she produces at a lower opportunity cost when compared to other people

for carlos

the opportunity cost of producing rye = 6 / 18 = 0.33

the opportunity cost of producing corn = 18 / 6 = 3

for Deborah,

the opportunity cost of producing rye = 7 / 28 = 0.25

the opportunity cost of producing corn = 28 /7 =4

Carlos has a comparative advantage in the production of corn because he produces at a lower opportunity cost when compared with Deborah

Deborah has a comparative advantage in the production of rye because he produces at a lower opportunity cost when compared with Carlos

A person has absolute advantage in production if he produces more quantity of the product when compared to other people.

Deborah has absolute advantage in the production of both rye and corn

The correct statements will be that

1. Carlos has an absolute advantage in the production of Rye

2. Deborah has an absolute advantage over the production of Corn.

3. Carlos' opportunity cost of producing 1 bushel of rye is 3 bushels of rye

4. Deborah's opportunity cost of producing 1 bushel of corn is 4 bushels of rye.

5. Carlos has a lower opportunity cost of producing corn than Deborah.

6. Deborah has a competitive advantage in the production of Corn.

7. Carlos has a competitive advantage in the production of Rye.

The production outputs of Carlos and Deborah suggests that Deborah is a more efficient farmer.

Production output

The production output refers to the total outcome derived from the use of resources available at a given period of time, such that the two different outputs are comparable.

Here, as the production output of Deborah is more in both the cases of production of rye and corn, it can be said that the production output of Deborah is more than Carlos.

Hence, the correct statements regrading the production outputs of Carlos and Deborah are as aforementioned.

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Luther Corporation Consolidated Balance Sheet December​ 31, 2006 and 2005​ (in $​ millions) Assets 2006 2005 Liabilities and ​Stockholders' Equity 2006 2005 Current Assets Current Liabilities Cash 58.5 Accounts payable 73.5 Accounts receivable 39.6 Notes payable​ / shortterm debt 9.6 Inventories 42.9 Current maturities of longterm debt 36.9 Other current assets 3.0 Other current liabilities 6.0 12.0 Total current assets 144.0 Total current liabilities 132.0 LongTerm Assets LongTerm Liabilities Land 62.1 Longterm debt 168.9 Buildings 91.5 Capital lease obligations Equipment 99.6 Less accumulated depreciation ​(​) ​(52.5) Deferred taxes 22.8 22.2 Net​ property, plant, and equipment 200.7 Other longterm liabilities Goodwill 60.0 Total longterm liabilities 191.1 Other longterm assets 63.0 42.0 Total liabilities 323.1 Total longterm assets 242.7 ​Stockholders' Equity 63.6 Total Assets 386.7 Total liabilities and ​Stockholders' Equity 386.7 Refer to the balance sheet above. ​ Luther's current ratio for 2006 is closest​ to:

Answers

Answer:

Luther Corporation

Current Ratio for 2006 is closest to:

1.1 : 1

Explanation:

a) Data and Calculations:

Total Current Assets = $144 million

Total Current Liabilities = $132 million

Current Ratio = Current Assets/Current Liabilities

= $144/$132

= 1.1 : 1

b) Luther Corporation's current ratio is a liquidity measure that shows Luther's ability to pay off short-term obligations worth $132 million or those due within one year with its current assets of $144 million.  The ratio tells investors and analysts of Luther Corporation how Luther can use its current assets to pay off its current debts.  Since Luther's current ratio is higher than 1, it is considered good, depending on the industry average.  This means that Luther's current ratio of 1.1 : 1 should not be considered in isolation, but in comparison with other firms in the industry and its performance over a number of years.

If the government wants to minimize the deadweight loss of taxation, which of the following items are good candidates for an excise tax? (select all that apply)A. emergency plumber servicesB. Coca-ColaC. insulinD. food at restaurants

Answers

Answer:

A. emergency plumber services and  C.insulin.

Explanation:

From the list provided the best candidates for this would be emergency plumber services and insulin. That is because these are items or services that have a high supply but low demand due to the population of customers being a minority. This, therefore, causes market inefficiency which leads to deadweight loss. Other items like Coca-Cola and food mostly stay in equilibrium because products are made depending on the current demand and the customer population is the vast majority.

Cobe Company has already manufactured 17,000 units of Product A at a cost of $20 per unit. The 17,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5, 800 units of Product B and 11, 400 units of Product C. Per unit selling price for Product B is $107 and for Product C is $52.
Prepare an analysis that shows whether the 17,000 units of Product A should be processed further or not.
Sell as is ProcessFurther
Sales
Relevant costs:
Total relevant costs
Income (loss)
Incremental net income (or loss) if processed further
The company should

Answers

Answer:

differential analysis:

                         No further process      Process further         Differential

                                                                                                 amount

Sales revenue            $410,000                $1,213,400             $803,400

Production costs     ($340,000)               ($580,000)           ($240,000)

Operating income       $70,000                  $633,400            $563,400

The company should process further and sell products B and C because its operating income will increase by $563,400.

An increase in input prices causes:___________
a) the market supply to shift inward, driving the equilibrium price downward.
b) the market supply to shift outward, leading to a higher equilibrium price.
c) the market supply to shift inward, driving the equilibrium price higher.
d) the supply curve to decrease and the demand curve to decrease.

Answers

Answer: the market supply to shift inward, driving the equilibrium price higher.

Explanation:

An increase in input prices will result into a rise in the production costs. This will result in a leftward shift of the supply curve.

Therefore, the market supply will shift inward, driving the equilibrium price higher. This simply means that there will be lesser supply of the product and hence, increase in price.

A customer sells short 100 shares of ABC at $17 as the initial transaction in a new margin account. The customer must deposit:_______.
A. $750.
B. $1,500.
C. $2,000.
D. $3,000.

Answers

Answer: $2,000

Explanation:

Regulation T which governs such actions in the investment market would only require that the customer deposit 50% of the total amount to be called which would be;

= 50% * (100 * 17)

= $850

However, as this is a new margin account, there is a set minimum that must be reached to enable it to be open. That minimum is $2,000.

Barnabas had a very rare necklace that he gave to Willie to hold for him for a few weeks. Barnabas wanted to give the necklace to Victoria for her birthday. Please answer true/false for the following statements.
Barnabas and Willie had a bailment for the sole benefit of Barnabas.
A. False
B. True
If Barnabas gives Victoria the necklace, the necklace is a gift causa mortis.
A. False
B. True
Barnabas would be the donee when he gives Victoria the gift.
A. False
B. True
Willie is the bailee when he receives the necklace from Barnabas.
A. False
B. True
For the gift to be valid, Barnabas only needed to delivery it to Victoria.
Identify if the remedy (relief) is equitable or legal.
direct damages
a. equitable
b. legal
rescission
a. equitable
b. legal
specific performance
equitable /legal
nominal damages
equitable /legal
compensatory damages
a. equitable
b. legal
injunction
a. equitable
b. legal
punitive damages
a. equitable
b. legal
consequential damages
a. equitable
b. legal
Dr. Neil met Mr. Hammond's grandson while they were visiting the Park. His grandson loved dinosaurs and Dr. Neil had written many books on the matter. Dr. Neill happened to have a copy of his latest book on him and thought the grandson would love it. Thus, he signed the book and gave it to him. Identify the party.
The donor in the situation would be:________.
the grandson Dr. Neil
The donee in the situation would be:_______.
the grandson Dr. Neil

Answers

Answer:

Answering true/false for the following statements:

Barnabas and Willie had a bailment for the sole benefit of Barnabas.

A. False

B. True

If Barnabas gives Victoria the necklace, the necklace is a gift causa mortis.

A. False

B. True

Barnabas would be the donee when he gives Victoria the gift.

A. False

B. True

Willie is the bailee when he receives the necklace from Barnabas.

A. False

B. True

For the gift to be valid, Barnabas only needed to delivery it to Victoria.

Identify if the remedy (relief) is equitable or legal.

direct damages

a. equitable

b. legal

rescission

a. equitable

b. legal

specific performance

equitable /legal

nominal damages

equitable /legal

compensatory damages

a. equitable

b. legal

injunction

a. equitable

b. legal

punitive damages

a. equitable

b. legal

consequential damages

a. equitable

b. legal

Dr. Neil met Mr. Hammond's grandson while they were visiting the Park. His grandson loved dinosaurs and Dr. Neil had written many books on the matter. Dr. Neill happened to have a copy of his latest book on him and thought the grandson would love it. Thus, he signed the book and gave it to him. Identify the party.

The donor in the situation would be:________.

the grandson Dr. Neil

The donee in the situation would be:_______.

the grandson Dr. Neil

Explanation:

Bailment is the transfer of the rare necklace from Barnabas to Willie so that Willie could hold it for him for a few weeks.  Willie is the bailee when he receives the necklace from Barnabas.

Gift causa mortis is a deathbed gift, which is not applicable in this case.  The gift here is given inter vivos, that is during the life of Barnabas.

A donee is Victoria who receives the necklace for her birthday.  Barnabas is the donor when he gives Victoria the gift.

Let M be the number of units to make and B be the number of units to buy. If it costs $2 to make a unit and $3 to buy a unit and 4000 units are needed, the objective function is

Min 2M + 3B

Min 4000 (M + B)

Max 2M + 3B

Max 8000M + 12000B

Answers

Answer:

Min 2M + 3B

Explanation:

Data provided in the question

Let us assume M denotes the making units

B denotes the buying units

So,

Making cost per unit = $2

And, the buying cost per unit = $3

And, the total number of units required = 4,000 units

Based on the above information, the objective function is Min 2M + 3B.

This indicates the minimum total cost

Hence, the correct option is A.

All of the following statements regarding convertible bonds are true except:_________.
A. Holders of convertible bonds can generally decide whether to convert to stock.
B. Holders of convertible bonds have the potential to profit from increases in stock price.
C. Holders of convertible bonds can choose when to convert to stock.
D. Holders of convertible bonds have the option to not convert and continue receiving bond interest payments and par value at maturity.
E. Holders of convertible bonds can choose how many shares of stock to receive at conversion.

Answers

Answer: Holders of convertible bonds can choose how many shares of stock to receive at conversion

Explanation:

A convertible bond is a debt security that yields the payment of interest, but can also be converted into equity shares or common stock that are predetermined.

The option that holders of convertible bonds can choose how many shares of stock to receive at conversion is wrong. This is because the number I shares that will be eventually converted will already have been fixed.

Given the following cash flows for two mutually exclusive projects, and a required rate of return of 12%, what is the EAA for Project A? Year Project A Project B 0 -300,000 -300,000 1 150,000 70,000 2 150,000 70,000 3 80,000 120,000 4 80,000 120,000 5 120,000 6 60,000

Answers

Answer:

Explanation:

Required rate of return r = 12 % .

Cash flow of project A = 300000 , 150000 , 150000 , 80000 , 80000 , 120000.

NPV of project A

300000 + 150000 / 1.12  + 150000 / 1.12²  + 80000 / 1.12³ + 80000 / 1.12⁴ +

120000 / 1.12⁵

= 300000 + 133928 +119579 + 56942 +50841 + 68091

= 729381 .

Equivalent annual annuity of Project A at the rate of 12 % .

729381  = NPVA of 1 at 12 %

729381 = A x 3.60478

A = 202337

EAA of project A is 202337 .

 

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