Answer:
Semi-annual interest payment=$153,000
Explanation:
The interest payment on the bond is an expense which would be incurred twice a year because the terms and conditions of the bond contract is that interest be paid semi-annually, that is every six month.
This implies that we would need to work out the interest rate applicable for every six month. This is doe as follows:
Semi-annual interest rate = Annual interest rate / 2
Annual interest rate = 9%
Semi-annual interest rate = 9%/2= 4.5%
Semi-annual interest payment = Interest rate × Nominal value of Bond
Semi-annual interest payment = 4.5% × $3,400,000=$153,000
Semi-annual interest payment= $153,000
Suppose taxi fares from Logan Airport to downtown Boston is known to be normally distributed and a sample of seven taxi fares produces a mean fare of $22.31 and a 95% confidence interval of [$20.5051, $24.2091]. Which of the following statements is a valid explanation of the confidence interval.
A) 95% of all taxi fares are between $20.51 and $24.21.
B) We are 95% confident that a randomly selected taxi fare will be between $20.51 and $24.21.
C) The mean amount of a taxi fare is $22.31, 95% of the time.
D) We are 95% confident that the average taxi fare between Logan Airport and downtown Boston will fall between $20.51 and $24.21.
Answer: D) We are 95% confident that the average taxi fare between Logan Airport and downtown Boston will fall between $20.51 and $24.21.
Explanation:
The Confidence interval allows one to speculate between which values the average of a population will be. In a 95% confidence interval, this means that we are 95% certain that the average value of a variable will be between the higher and lower limits set by the interval.
The 95% confidence interval here has an upper limit of $24.2091 and a lower limit of $20.5051 for taxi fares from Logan Airport to downtown Boston. This means that with a 95% certainty, the taxi charge from Logan Airport to downtown Boston will be between these 2 charges so you can expect to pay an amount between them.
Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PB0 report from the actuary. The following information was included in the report: ending PBO, $110,000 benefits paid to retirees. $10,000, interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO?
A) $100,000
B) $112,000.
C) $90,000.
D) $107,200.
Answer:
C) $90,000
Explanation:
Beginning PBO = Interest cost/Discount rate =
Beginning PBO = $7,200/8%
Beginning PBO = $90,000
Pattison Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Customer Served Revenue $5,500 Employee salaries and wages $46,300 $1,000 Travel expenses $ 500 Other expenses $32,500 When the company prepared its planning budget at the beginning of May, it assumed that 20 customers would have been served. However, 17 customers were actually served during May. The activity variance for "Travel expenses" for May would have been closest to:
Answer:
Pattison Corporation
Activity Variance for "Travel expenses" for May would have been closest to:
$1,500 Favorable
Explanation:
Data and Calculations:
Fixed Element Variable Element per
per Month Customer Served
Revenue $5,500
Employee salaries
and wages $46,300 $1,000
Travel expenses $ 500
Other expenses $32,500
The Travel Expenses Activity Variance = Actual cost minus budgeted cost
= $8,500 - $10,000
= $1,500 Favorable
Actual travel expenses = ($500 x 17)
= $8,500
Budgeted travel expenses = ($500 x 20)
= $10,000
Pattison Corporation's activity variance for Travel Expenses for the month of May is the difference between the actual travel expenses and the budgeted travel expenses. The budgeted expenses are based on budgeted number of customers served in May while the actual expenses are based on actual number of customers served in May.
Each year, public schools are rewarded with bigger budgets for achieving a rating of "excellent" or "recommended" and are punished for rating "needs improvement." These ratings are based on meeting thresholds on a broad set of measures such as attendance rates, graduation rates, standardized test scores, SAT scores, and so on. True or False: This funding structure incentivizes schools to seek out and serve lower-performing students. True False
Answer:
Each year, public schools are rewarded with bigger budgets for achieving a rating of "excellent" or "recommended" and are punished for rating "needs improvement." These ratings are based on meeting thresholds on a broad set of measures such as attendance rates, graduation rates, standardized test scores, SAT scores, and so on. True or False
This funding structure incentivizes schools to seek out and serve lower-performing students. True False
Explanation:
The funding structure is meant to encourage public schools for improved performance in all the performance measures. These performance measures are the means to judge whether proper application is being achieved with the funds provided by the government to such schools. They also encourage healthy competition among public schools when followed judiciously. Since they have some internal and external benchmarks, the performance measures are like a balanced scorecard for performance evaluation.
Pauley Company needs to determine a markup for a new product. Pauley expects to sell 15,000 units and wants a target profit of $22 per unit. Additional information is as follows:
Variable product cost per unit $19
Variable administrative cost per unit 11
Total fixed overhead 13,500
Total fixed administrative 21,000
Using the variable cost method, what markup percentage to variable cost should be used?
Answer:
81%
Explanation:
Calculation for the markup percentage to variable cost that should be used
Using this formula
Markup percentage=[(Target profit + Fixed overhead costs + Fixed administrative costs) / Total variable costs
Let plug in the formula
Markup percentage=[($22*15,000 units)+$13,500+$21,000]/$30×15,000)
Markup percentage=($330,000+$13,500+$21,000)/$450,000
Markup percentage=$364,500/$450,000
Markup percentage=0.81*100
Markup percentage=81%
Calculation for Total variable costs
Variable product cost per unit $19
Variable administrative cost per unit $11
Total variable costs =$30
Therefore the markup percentage to variable cost that should be used will be 81%
Journalize the following, assuming a 360-day year is used for interest calculations: Apr. 30 Issued a $108,000, 30-day, 6% note dated April 30 to Misner Co. on account. May 30 Paid Misner Co. the amount owed on the note dated April 30. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar.
Answer and Explanation:
The journal entries are shown below:
a. Account payable Dr $108,000
To note payable $108,000
(Being the issuance of the note is recorded)
b. Note payable Dr $108,000
Interest expense Dr $540 ($108,000 × 30 days ÷ 360 days × 6%)
To cash $108,540
(being the note payable and the interest expense is recorded)
On December 31, 2016, when its Allowance for Doubtful Accounts had a debit balance of $1,432, Sunland Company estimates that 9% of its accounts receivable balance of $105,900 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2017, Sunland Company determined that B. Jared’s account was uncollectible and wrote off $1,091. On June 12, 2017, Jared paid the amount previously written off.Required:Prepare the journal entries on December 31, 2016, May 11, 2017, and June 12, 2017.
Answer: Please see explanation column for answers
Explanation:
1) To record bad debts expense
Date Account Debit Credit
Dec 31, 2016 Bad Debt Expense $10,963
Allowance for doubtful account $10,963
Calculation ;
Bad debts expense
9% x $105,900 = $9,531
Adjustment= $9,531 + debit balance of $1,432=$10,963
2) To write off uncollectible accounts receivables
Date Account Debit Credit
May 11, 2017 Allowance for doubtful account $1,091.
Accounts receivable--- B. Jared $1,091.
3) To reinstate accounts accounts previously written off
Date Account Debit Credit
June 12, 2017 Accounts receivable--- B. Jared $1,091.
Allowance for doubtful account $1,091.
3b)to collect cash from receivables
Date Account Debit Credit
June 12, 2017 Cash $1,091.
Accounts receivable--- B. Jared $1,091.
7.. Getaway Travel Company reported net income for 2021 in the amount of $50,000. During 2021, Getaway declared and paid $2,000 in cash dividends on its nonconvertible preferred stock. Getaway also paid $10,000 cash dividends on its common stock. Getaway had 40,000 common shares outstanding from January 1 until 10,000 new shares were sold for cash on July 1, 2021. A 2-for-1 stock split was granted on July 5, 2021. What is the 2021 basic earnings per share
Answer:Earnings per share fOR 2021= 0.53
Explanation:
Earnings per share =Total earnings available to shareholders(Net income - preferred dividends )/Weighted Average Outstanding shares
Net income = $50,000
preferred dividend= $2,000
Total earnings available to common shareholders = $50,000 - $2000= $48,000
using a 2-1 stock spilt , outstanding shares= 40,000 x 2 + 10,000 x 6/12(jan- 1st july ) x 2 = 80,000 + 10,000 = $90,000
Earnings per share = $48,000/ $90,000 =0.53
12-8. Dealerships for Subaru and other automobile manufacturers keep records of the mileage of cars they sell and service. Mileage data are used to remind customers of when they need to schedule service appointments, but they are used for other purposes as well. What kinds of decisions does this piece of data support at the local level and at the corporate level
Answer:
The Dealerships for Sabaru and other automobile manufacturers keeps records of the mileage of cars they sell and service due to various reasons. At the local level, it afford them the opportunity to know the car brand with the highest mileage being used by their customers.
Also, the ability to know the brand of car with least requirement for servicing. On the other-hand, at the corporate level, the records afford them the opportunity to know the automobile manufacturers which they will keep on trading with under dealership due to feedback from their customers.
Explanation:
The decisions that this piece of data supports at the local level and at the corporate level include the car that requires the least servicing.
From the complete information, it should be noted that the dealerships for Sabaru and other automobile manufacturers keep records of the mileage of cars they sell and service.
This can be pivotal in order to know the car brand with the highest mileage being used by their customers. Also, it's important to know the brand of car with the least requirement for servicing. At the corporate level, it's vital to know the automobile manufacturers that they'll continue trading with.
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Stephen Battista argues that public relations should help Under Armour convince customers that the company has a new kind of sports apparel. One way that public relations differs from other kinds of marketing communications is that it substitutes the term ________ for target market. Multiple Choice target audience consumer referent group public market segment
Answer:
The correct answer is the option: Public.
Explanation:
To begin with, the term of "Public Relations" refers to the instrument that the marketing managers have in order to establish better relationships with agents that are outside the company with the primary focus of increasing those relations that will eventually increase the company's public image. Moreover, one the variables that changes when the company decides to use this type of strategy is the fact that the target audience or market changes to be the public in general and that is why that the company forgets about their customers and focus on the public as a whole.
Location Score
Factor
(100 points each) Weight A B C
Convenience .15 89 78 84
Parking facilities .20 75 93 98
Display area .18 92 90 87
Shopper traffic .27 92 93 82
Operating costs .10 93 97 84
Neighborhood .10 90 96 95
1.00
a.
Using the above factor ratings, calculate the composite score for each location. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
Location Composite Score
A
B
C
b.
Determine which location alternative (A, B, or C) should be chosen on the basis of maximum composite score.
B
C
A
Answer and Explanation:
The computation of composite score for each location is shown below:-
Composite score for A is
= 0.15 × 89 + .20 × 75 + 0.18 × 92 + 0.27 × 92 + 0.10 × 93 + 0.10 × 90
= 88.05
Composite score for B is
= 0.15 × 78 + .20 × 93 + 0.18 × 90 + 0.27 × 93 + 0.10 × 97 + 0.10 × 96
= 90.91
Composite score for C is
= 0.15 × 84 + .20 × 98 + 0.18 × 87 + 0.27 × 82 + 0.10 × 84 + 0.10 × 95
= 87.90
Therefore for computing the composite score for each location we simply multiply weight with A location and in the same manner of A, B and C
b. The maximum composite score from A, B and C is B
You short-sell 200 shares of Rock Creek Fly Fishing Co., now selling for $50 per share. If you want to limit your loss to $2,500, you should place a stop-buy order at ____. A. $37.50 B. $62.50 C. $56.25 D. $59.75
Answer:
The answer is B. $62.5
Explanation:
A stop order is an order to either buy or sell a stock immediately the stock price reaches a certain price. This particular price is called stop price.
A buy stop order is an order to buy a stock immediately the its price reaches a certain stop price. When stop price is above the current market price, a buy stop order is made.
Let's now go back to the question;
Stop buy order will be placed at:
($2,500 / 200 shares) + $50
= $12.5 + $50
= $62.5
Discuss three major factors that contribute to an employee's decision to join a union. Discuss the five reasons that have contributed to the trend of decline in unionization g
Answer:
The answer is below
Explanation:
Three major factors that contribute to an employee's decision to join a union.
1. Greater Bargaining Power
As an individual employee, it can be difficult to negotiate for wage increase or better working condition generally. However, being a member Union, together the group can negotiate and demand for what they feel is right for their members. In a rare occasion, the threat of a strike by a Union is a great tool to bargain well with the employer.
2. Minimize Discrimination
As a Union, it is easier to demand for equality in terms of wage, working condition, promotion, leave etc. Unlike individual employee, who may be facing discrimination from his or her supervisor as to employee related issue. Union can ensure the management used the right policies that seek for equality among all its employees without favoritism or discrimination.
3. Sense of Security
An employee may join the Union on the basis that, Union can save them against abrupt dismissal or other types of work insecurities including accident, injury, illness etc.
Also, Union can help secure retirement benefits and ensure the management improve on the employees' welfare generally.
Five reasons that have contributed to the trend of decline in unionization
1. Irrelevance appearance of the Union:
Many workers believe that Union is not necessary because in the time of economic boom, getting wage increase and other working benefits can be gotten be individual employee and not necessarily through a Union, and at the same time, during economic downturn, unions often times don't have the capacity to protect their members from layoffs, wage and benefit reductions and tougher working conditions.
2. Poor Image of the Union:
Many employers and employees tend to view union with negativity, in the sense that, often times, their demands can be unreasonable, and are characterized by issue of labor racketeering, mob influence and embezzlement.
3. Unions are Seen as Political:
For some employees, they believe that Union tend to use their money or Union dues to support a political candidate. This in turn has made some employees who are neutral, not wanting to join the Union.
4. Reliance on goverment:
Many employees now believe that, government, not Union gives better form of security and voice to air their opinions. These includes pensions, healthcare, protection.
5. Global competition and deregulation in Unionized industries:
Since most of the companies or industries that have union has been deregulated, this has increased its competition, there by, making the need for union not really necessary, because with or without Union, one may still faces sack.
Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic.Activity Expected Costs Expected Activity Handling materials $625,000 100,000 parts Inspecting product 900,000 1,500 batches Processing purchase orders 105,000 700 orders Paying suppliers 175,000 500 invoices Insuring the factory 300,000 40,000 square feet Designing packaging 75,000 2 modelsAssume that the following information is available for the company’s two products for the first quarter of 2017.Production volume 10,000 units 30,000 unitsParts required 20,000 parts 30,000 partsBatches made 250 batches 100 batchesPurchase orders 50 orders 20 ordersInvoices 50 invoices 10 invoicesSpace occupied 10,000 sq. ft. 7,000 sq. ftModels 1 model 1 modelRequired:Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model?
Answer:
I can't understand this type of questions
Time Again LLC produces and sells a mantel clock for $150.00 per unit. In 2017, 43,000 clocks were produced and 36,000 were sold. Other information for the year includes: Direct materials $43.00 per unit Direct manufacturing labor $8.00 per unit Variable manufacturing costs $4.00 per unit Sales commissions $15.00 per part Fixed manufacturing costs $63.00 per unit Administrative expenses, all fixed $38.50 per unit What is the inventoriable cost per unit using absorption costing?
Answer:
Unitary cost= $118
Explanation:
Giving the following information:
Production= 43,000
Direct materials $43.00 per unit
Direct manufacturing labor $8.00 per unit
Variable manufacturing costs $4.00 per unit
Fixed manufacturing costs $63.00 per unit
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unitary cost= 43 + 8 + 4 + 63
Unitary cost= $118
Under Armour uses its website to sell its products, but Nathan Shriver, art director of Interactive, believes that what the website does, and what advertising does not do, is make the brand
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Friendlier to the customer
b) Recognizable in retail stores
c) Seem special compare to off-label gear
d) Part of the consumer's daily life
e) Seem of higher quality than Nike
And the correct answer is the option D: Part of the consumer's daily life.
Explanation:
To begin with, when Nathan Shriver says that he believes that the website and advertising of the company does is to make the brand more part of the consumer's daily life refers that in the end it is that action what truly makes the company to increase its sales due to the fact that thanks to the marketing campaigns now the brand is more important in the life of the consumers and more due to the fact that those advertising make them understand that the use of Under Armour's products is essential to every day training and movement that the clients might face.
Which of the following promises is subject to the "strict performance" standard? Assume that performance of the promise is not an express condition of the promisee's duty to perform. cousrse hero
Answer:
A promise to deliver a deed
Explanation:
The term, 'strict performance' is used to describe a contract between two parties. A contract is an agreement between two parties, and it is legally binding. When discharging contracts involving services, 'substantial performance' is required. For example, if I tell a painter to paint my house blue except for the kitchen and storeroom which should be painted white, and he does accordingly but failed in painting the kitchen white, he has performed substantially even though there was a minor breach. The consequences of which would be borne by him.
'Strict performance' is required in contracts where the terms are stated in express terms and the standards are very high. A 'deed' is such a contract because it is a document specifying the legal rights of a person or the ownership of a property. It requires the signatures of the two parties. Therefore, strict performance and adherence to the contractual deed are required.
Brian Hickey uses his credit card in August to purchase the following college supplies: books for $425, your long bus pass for $175, food service meal ticket for $450, and season tickets to the basketball games for $125,. On September 1, he uses 650 of his financial aid check to reduce the balance. The issuing bank charges 1.2% interest per month and requires full payment within 36 months. Brian had a previous balance is zero and he makes no other purchases with his card. What is the minimum payment due September 1, and what is the balance due on October 1?
Answer:
Brian Hickey
a. Minimum due on September 1 is:
$510.90
b. Balance due on October 1 is:
$516.13
Explanation:
a) Data and Calculations:
Purchases in August:
Books = $425
Long bus pass = 175
Meal ticket = 450
Basketball games = 125
Total purchases = $1,175
Interest rate = 1.2% per month
Interest accrued 14.10
Total in debt $1,160.90
September 1:
b) Debt reduction 650.00
Balance = $510.90
Interest accrued 6.13
Ending Balance $516.13
c) The credit card interest is calculated on the remaining debt after each transaction. This interest is then added back to the debt to obtain the balance due. If Brian Hickey does not carry out any other transaction with his credit card, the debt will continue to increase by 1.2% compounded monthly until the expiration of the 36-months period.
Harvey’s Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer. The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units. They have the following estimated costs.
Units Produced Labor Cost Total cost
0 0 100
1 50 150
2 100 200
3 200 300
4 350 450
What is the marginal cost of producing the third unit?
a. $400
b. $300
c. $200
d. $100
Answer:
Harvey's Hardware
Marginal cost of producing the third lawnmowers:
d. $100
Explanation:
Harvey's marginal cost for producing the third unit of lawnmowers is the additional cost that resulted when the total cost increased from $200 to $300. However, it can be deciphered from the case that the marginal cost for Harvey, which it is supposed to be a variable cost, is traceable to the direct labor costs. This implies that the fixed cost element for Harvey in the production of the lawnmowers has been relatively fixed at $100. It does not vary with the volume of production, while the direct labor costs vary with the volume of lawnmowers produced by Harvey.
Bryce Co. sales are $801,000, variable costs are $465,100, and operating income is $287,000. What is the contribution margin ratio
Answer:
Contribution margin ratio= 0.42
Explanation:
Giving the following information:
Bryce Co. sales are $801,000
Variable costs are $465,100
Operating income is $287,000.
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= (sales - variable cost) / sales
contribution margin ratio= (801,000 - 465,100) / 801,000
contribution margin ratio= 0.42
Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno’s monthly manufacturing cost and other expense data are as follows.
Rent on factory equipment $11,600
Insurance on factory building 2,500
Raw materials (plastics, polystyrene, etc.) 79,700
Utility costs for factory 900
Supplies for general office 300
Wages for assembly line workers 63,700
Depreciation on office equipment 800
Miscellaneous materials (glue, thread, etc.) 1,200
Factory manager’s salary 6,400
Property taxes on factory building 500
Advertising for helmets 14,500
Sales commissions 10,600
Depreciation on factory building 1,600
Required:
Prepare an answer sheet with the following column headings:
Cost Item Direct Materials Direct Labor Manufacturing Overhead Period Costs
Answer:
Cost Item Direct Direct Manufacturing Period
materials labor overhead costs
Rent on factory $11,600
equipment
Insurance on $2,500
factory building
Raw materials $79,700
Utility costs $900
for factory
Supplies for $300
general office
Wages assembly $63,700
line workers
Depreciation on $800
office equipment
Miscellaneous $1,200
materials
Factory manager’s $6,400
salary
Property taxes on $500
factory building
Advertising for $14,500
helmets
Sales commissions $10,600
Depreciation on $1,600
factory building
TOTALS $79,700 $63,700 $24,700 $26,200
A 25-year old single client has just started his own small business and is not covered by a retirement plan. He has $5,000 to invest and currently has a low level of income. He wishes to start saving for retirement. The BEST recommendation is a:
Answer:
Roth IRA
Explanation:
Based on this scenario, it can be said that the best recommendation would be a Roth IRA. This is an individual retirement account that non-deductible tax-free growth for retirement at age 59 1/2. As of 2018, the yearly limit for a Roth IRA account is $5,500 meaning that the client in this scenario would not have any problem investing the entire $5000 as soon as they open the account. And since he is in a low tax bracket he should not have any problem opening an Account.
Statement of retained earnings. Use the data from the following financial statements in the popup window,
LOADING...
Partial Income Statement Year Ending 2014
Sales revenue
$350,200
Cost of goods sold
$141,800
Fixed costs
$42,900
Selling, general, and administrative expenses
$28,000
Depreciation
$46,200
Partial Balance Sheet 12/31/2013
ASSETS
LIABILITIES
Cash
$16,000
Notes payable
$14,000
Accounts receivable
$27,800
Accounts payable
$19,100
Inventories
$48,000
Long-term debt
$189,900
Fixed assets
$368,000
OWNERS' EQUITY
Accumulated depreciation (-)
$140,200
Retained earnings
Intangible assets
$82,000
Common stock
$131,900
Partial Balance Sheet 12/31/2014
ASSETS
LIABILITIES
Cash
$26,200
Notes payable
$11,900
Accounts receivable
$18,800
Accounts payable
$24,100
Inventories
$53,200
Long-term debt
$161,800
Fixed assets
$447,800
OWNERS' EQUITY
Accumulated depreciation (-)
Retained earnings
Intangible assets
$82,200
Common stock
$181,900
. The company paid interest expense of
$ 18 comma 700$18,700
for 2014 and had an overall tax rate of
40 %40%
for 2014. Complete the statement of retained earnings for2014, and determine the dividends paid last year.
The distributed earnings is
$nothing.
(Round to the nearest dollar.)
Complete the statement of retained earnings: (Round to the nearest dollar.)
Statement of Retained Earnings
Year Ending December 31, 2014
Beginning balance
$
Add net income
$
Subtract dividends
$
Ending balance
$
True or false: At 2019 year-end, a government has $25,000 of outstanding encumbrances. The 2019 Budgetary Comparison Scheduled will include the $25,000 whether or not the encumbrances lapse at year-end.
Answer:
True.
Explanation:
The 2019 Budgetary Comparison Schedule will include the $25,000 whether or not the encumbrances lapse at the year-end, either as outstanding encumbrances or settled encumbrances. These $25,000 encumbrances are budget reservations of appropriations so that they can be used to settle specified expenditures in the future. The purpose of making these reservations is to signal that the expenditures have been earmarked so that their cash allocations are not used for other purposes.
Consider a basket of consumer goods that costs $90 in the United States. The same basket of goods costs CNY 105 in China.
Holding constant the cost of the basket in each country, compute the real exchange rates that would result from the two nominal exchange rates in the following table.
Cost of Basket in U.S (Dollars) Cost of Basket in China (Yuan) Nominal Exchange Rate (Yuan per dollar) Real Exchange Rate (Baskets of Chinese goods per basket of U.S goods)
90 105 7.00
90 105 10.50
Answer:
The real exchange rates that would result from the two nominal exchange rates are:
For the first row in the table RER is 6.
For the second row in the table RER is 9.
Note: See the attached excel file for the table.
Explanation:
Note: The table in the question is merged together. It is therefore sorted before answering the question. See the attached excel file for the sorted table.
The answer to the explanation to the answer is now provided as follows:
The real exchange rate (RER) between the the currencies of two counties can be described as the multiplication of the nominal exchange and the ratio of baskets of goods between these two countries.
RER can can therefore be calculated using the following formula:
RER = (e * P*) / P ................................. (1)
Where, from the question;
e = Nominal exchange rate or Yuan per dollar
P* = Cost of Basket in U.S (Dollars)
P = Cost of Basket in China (Yuan)
For the first row in the table:
e = Nominal exchange rate or Yuan per dollar = 7
P* = Cost of Basket in U.S (Dollars) = $90
P = Cost of Basket in China (Yuan) = 105
Substituting the values into equation (1), we have:
RER = (7 * 90) / 105
RER = 630 / 105
RER = 6
For the second row in the table:
e = Nominal exchange rate or Yuan per dollar = 10.50
P* = Cost of Basket in U.S (Dollars) = $90
P = Cost of Basket in China (Yuan) = 105
Substituting the values into equation (1), we have:
RER = (10.50 * 90) / 105
RER = 945 / 105
RER = 9
The real exchange rates that should lead from the two nominal exchange rates should be 6 and 9.
Calculation of the real exchange rate:RER = (e * P*) / P ................................. (1)
Here,
e = Nominal exchange rate or Yuan per dollar
P* = Cost of Basket in U.S (Dollars)
P = Cost of Basket in China (Yuan)
So,
e = Nominal exchange rate or Yuan per dollar = 7
P* = Cost of Basket in U.S (Dollars) = $90
P = Cost of Basket in China (Yuan) = 105
Now
RER = (7 * 90) / 105
RER = 630 / 105
RER = 6
Now
e = Nominal exchange rate or Yuan per dollar = 10.50
P* = Cost of Basket in U.S (Dollars) = $90
P = Cost of Basket in China (Yuan) = 105
So,
RER = (10.50 * 90) / 105
RER = 945 / 105
RER = 9
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The budget philosophy that ignores budget outcomes and focuses on whatever is necessary to achieve economic goals and stabilize the economy is: g
Answer:
functional finance.
Explanation:
The budget philosophy of functional finance implies that the government should do all that is necessary in order to make the economy operate at full potential. The outcomes of whatever budget preparations are ignored in philosophy of functional finance. What is most paramount is to focus on whatever that would bring growth and stability to the economy.
In the philosophy of functional finance, what is most important about balancing the federal budget is its use to promote an economy so that it can operate at full potential.
If you could purchase IBM stock and simultaneously sell the stock for $5 more, you would be involved in one type of economic activity?a. indifference principleb. arbitragec. carry traded. marked to markete. none of the above
Answer:
arbitrage
Explanation:
Arbitrage can be defined as an act or process of buying buying and selling an asset simultaneously. Purchasing IBM stock and selling it for 5 dollar more simultaneously is an example of arbitrage. Such a seller is going to cash in on the price difference in buying and selling this stock. It is simply taking advantage of the difference in price that is gotten from buying and reselling this stock at 5dollars.
If a company has the following data, is the budget variance favorable or unfavorable? Budgeted Sales $10,000 Actual Sales. $8,000
Answer:
$2,000 unfavorable
Explanation:
The computation of the budget variance is shown below:
Budget variance is
= Budgeted sales - actual sales
where,
Budgeted sales is $10,000
And the actual sales is $8,000
Now placing these values to the above formula
So, the budget variance is
= $10,000 - $8,000
= $2,000 unfavorable
Since the actual sales is less than the budgeted sales so the same is to be unfavorable else it is favorable
IP Company has a preliminary cash balance of $25,000 and an agreement with the bank that it will keep a minimum balance of $20,000. IP Company has a beginning loan balance of $12,000.
The ending loan balance is:________.
Answer: $7,000
Explanation:
From the question, we are informed that IP Company has a preliminary cash balance of $25,000 and an agreement with the bank that it will keep a minimum balance of $20,000 and that IP Company has a beginning loan balance of $12,000.
The ending loan balance will be:
= $20,000 + $12,000 - $25,000
= $32,000 - $25,000
= $7,000
The firm has a target debt-equity (D/E) ratio of 0.76. Its cost of equity is 15.3 percent, and its pretax cost of debt is 9 percent. What is the WACC given a tax rate of 21 percent
Answer:
11.76%
Explanation:
The computation of the Weighted average cost of capital (WACC) is shown below:
= Weightage of debt × cost of debt × ( 1 - tax rate)+ (Weightage of common stock) × (cost of common stock)
= (0.76 ÷ 1.76 × 9%) × ( 1 - 21%) + (1 ÷ 1.76 × 15.3%)
= 3.07% + 8.69%
= 11.76%
Hence, the WACC is 11.76%
We simply multiplied the weight of capital stucture with its cost
