Answer:
The cost of the land should be recorded as $108,350
Explanation:
Land cost = $112,000
Demolition dilapidated building = $2,200
Legal fees - title search = $1,450
Cost of land = Land cost - Demolition dilapidated building - Legal fees - title search
Cost of land = $112,000 - $2,200 - $1,450
Cost of land = $108,350
Samantha and Darren are 50% owners in Black Hat Corp., a calendar year S corporation. On June 29, Samantha sold her shares to Endora. The financial results of Black Hat using normal accounting rules are as follows: Income through June 30 = $34,000; income from July 1 - Dec 31 = $76,000 for total income for the year of $110,000. All the shareholders would like to limit the tax liability from the S corporation income. Considering these facts, would Endora prefer the daily method or the normal accounting method to allocate income? What method would Samantha prefer?
Answer:
Endora would prefer DAILY METHOD while Samantha would prefer NORMAL ACCOUNTING METHOD
Explanation:
Based on the information given above Endora would most likely prefer the DAILY METHOD reason been that she would most likely allocate her income over the whole year while Samantha would prefer NORMAL ACCOUNTING METHOD reason been that the normal accounting method will often tend to recognizes a higher share of the income mostly in the second half of the year.
Therefore Endora would prefer DAILY METHOD while Samantha would prefer NORMAL ACCOUNTING METHOD.
Read the scenario, and answer the question. Your friend Lorenzo is trying to decide on a career path. He has narrowed down his search to two choices. Before he selects a major, he wants to know more about the two careers and the skills needed for each profession. What advice would you give Lorenzo?
a. Volunteer at a nonprofit organization.
b. Monitor the classified ads.
c. Interview someone in each of your chosen fields.
Answer: Interview someone in each of your chosen fields.
Explanation:
From the question, we are informed that Lorenzo is trying to decide on a career path and that he has narrowed down his search to two choices but that before he selects a major, he wants to know more about the two careers and the skills needed for each profession.
The best advice is for him to interview someone in each of your chosen fields. By doing this, he'll be able to understand the options available to him and have better knowledge on both career paths and hence make a better decision.
Gabriel, Harris and Ida are members of Jeweled Watches, LLC. What are their options with respect to the management of their firm?
Answer:
They could be a Member-managed Limited Liability Company or a Manager-managed Limited Liability Company.
Explanation:
A Limited Liability Company is usually run by two or more partners. In managing this type of company, the members might choose to manage the company themselves. This is known as a member-managed Limited Liability Company. In such cases, if any member makes a decision in behalf of the business, with his signature appended to it, such a decision is considered legally binding on all other members of the company. Every member also has a say in the company's decision-making.
If they choose to be a manager-managed Limited Liability Company, they can appoint one or more non-members to manage the company for them. They do not interfere with how the manager chooses to run the company. They can still make important decisions but this is quite limited. However, they can choose to remove the manager/managers as they will.
Park Co. is considering an investment that requires immediate payment of $28,245 and provides expected cash inflows of $9,300 annually for four years. Assume Park Co. requires a 7% return on its investments.
Required:
a. What is the internal rate of return?
b. Based on its internal rate of return, should Park Co. make the investment?
Answer:
a) Internal rate of return (IRR) = 12.70 %
b) Park Co should make the return because the IRR is higher than the return on investment of 7%. This implies that undertaking the investment would increase the the wealth of the shareholders
Explanation:
The IRR is the discount rate that equates the present value of cash inflows to that of cash outflows. At the IRR, the Net Present Value (NPV) of a project is equal to zero
If the IRR greater than the required rate of return , we accept the project for implementation
If the IRR is less than that the required rate , we reject the project for implementation
IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%
NPV = PV of cash inflow - initial cost
PV of cash inflow = A× (1- (1+r)^(-n) )/r
A- cash inflow , r- rate of return, n- number of years
Step 1 :
NPVa at 7%
NPV = (9300 × (1- 1.07^(-4)/0.07 ) - 28,245 = 3,256.06
Step 2:
NPVb at 20%
NPV = (9300 × (1- 1.07^(-4)/0.07 ) - 28,245 = (4,169.77)
Step 3 :
IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%
= 7% + (3,256.06 /(3,256.06 + 4,169.77)) × (20-7)%= 12.70
IRR = 12.70%
a) Internal rate of return (IRR) = 12.70 %
b) Park Co should make the return because the IRR (12.70%) is higher than the return on investment of 7%. This implies that undertaking the investment would increase the the wealth of the shareholders
On the statement of cash flows, the cash flows from operating activities section would include a. receipts from the issuance of common stock b. payments for cash dividends c. payment for interest on short-term notes payable d. payments for the purchase of investments
Answer:
c. payment for interest on short-term notes payable
Explanation:
Cash flow statement shows positive and negative cash flows that result from activities of a business. It is divided into 3 parts: cash flow from operating activities, cash flow from investing activities, cash flow from financing activities.
Cash flows form operations involves cash flows from regular business activities. A positive change in assets represents an outflow and a negative change in liability represents an inflow.
Items considered under operating activities include inventory, accounts receivable, accrued revenue, accounts payable, and tax liabilities.
Payment for interest on short-term notes payable is a account payable item, so it is included in cash flow from operations
Suppose annual inflation rates in the U.S. and Mexico are expected to be 6% and 80%, respectively, over the next several years. If the current spot rate for the Mexican peso is $.005, then the best estimate of the peso's spot value in 3 years is Group of answer choices $.00276 $.01190 $.00321 $.00102
Answer:
$.00102
Explanation:
The forward peso's spot value in 3 years can be computed using the below formula:
forward exchange rate=current spot rate*(1+US inflation)^3/(1+Mexican inflation)^3
current spot rate=$.005,
US inflation rate is 6%
Mexican inflation rate is 80%
forward exchange rate=$.005,*(1+6%)^3/(1+80%)^3
forward exchange rate(in 3 years)=$0.00102
As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data:
Sales revenues $13,000
Depreciation $4,000
Other operating costs $6,000
Tax rate 35.0%
What is the Year 1 cash flow?
a. $6,962
b. $5,950
c. $7,438
d. $5,177
e. $7,378
Answer:
$5,950
Explanation:
Boulder incorporation reported the following data for year 1
Sales revenue= $13,000
Depreciation= $4,000
Other operating costs= $6,000
Tax rate= 35%
The first step is to calculate the EBIT
= sales revenue-operating costs-depreciation
= $13,000-$6,000-$4,000
= $3,000
Therefore, the cash flow for year 1 can be calculated as follows
= 3,000×35/100
= 3,000×0.35
= 1,050
= 3,000-1,050
= 1,950
Cash flow= 4,000+1,950
= $5,950
Hence the cash flow for year 1 is $5,950
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $420,000; Allowance for Doubtful Accounts has a debit balance of $4,000; and sales for the year total $1,890,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $16,400. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ 420,000 Allowance for Doubtful Accounts $ 16,400 Bad Debt Expense $ c. Determine the net realizable value of accounts receivable. $
Answer and Explanation:
The computation is shown below:
a. Amount of adjusting entry for uncollectible accounts
= Estimated balance of Allowance for Doubtful Accounts + debit balance
= $16,400 + $4,000
= $20,400
b. Adjusted balances
For account receivable
= account receivable
= $420,000
For allowance for doubtful debts
= Estimated amount
= $16,400
For bad debts
= AMount of adjusting entry
= $20,400
c. Net realizable value
= Account receivable balance - estimated balance of Allowance for Doubtful Accounts
= $420,000 - $16,400
= $403,600
During July, Laesch Company, which uses a perpetual inventory system, sold 1,430 units from its LIFO-based inventory, which had originally cost $19 per unit. The replacement cost is expected to be $28 per unit.
Required: Respond to the following two independent scenarios as requested
Case 1: In July, the company is planning to reduce its inventory and expects to replace only 980 of these units by December 31, the end of its fiscal year
Prepare the entry in July to record the sale of the 1,390 units (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Laesch Company
Journal entries:
Sale of 1,430 units
Debit Cash or Accounts Receivable $40,040
Credit Sales Revenue $40,040
To record the sale of 1,430 units of inventory at $28.
Debit Cost of goods sold $27,170
Credit Inventory $27,170
To record the cost of the goods sold at $19.
Sale of 1,390 units
Debit Cash or Accounts Receivable $38,920
Credit Sales Revenue $38,920
To record the sale of 1,390 units of inventory at $28.
Debit Cost of goods sold $26,410
Credit Inventory $26,410
To record the cost of the goods sold at $19.
Explanation:
Laesch Company can use Journal entries to record its business transactions as they occur on a daily basis. Journal entries show the accounts involved in any transaction and the one to be debited or credited. From the journal, postings are made to the general ledger into individual accounts.
A study of over 12,000 employees found that ________ had engaged in such workplace misbehaviors as goldbricking, sick time abuses, and/or fraud at least once.
Answer:
90%
Explanation:
According to the study of over 12,000 employees, it is found that 90% has engaged in the workplace with respect to the misbehaviors in terms of goldbricking, sick time abuses, or fraud at lease one time
here goldbricking means working less as your capability as they are more focused to do a personal task
So the correct answer is 90%
You purchased 500 shares of Barden Enterprises stock for $55.43 per share at the beginning of the year. The stock is currently priced at $57.48 per share. What is your dividend yield if you received total dividends of $835 over the year?
Answer:
Dividend yield is 2.91 %.
Explanation:
Dividend yield = Annual Dividend per Share / Stock Price per Share × 100
where,
Annual Dividend per Share = Total Dividends ÷ Total Number of Shares
= $835 ÷ 500
= $1.67
then,
Dividend yield = $1.67 / $57.48 × 100
= 2.905 or 2.91 %
Q3) Creative Sports Design (CSD) manufactures a standard-size racket and an oversize racket. The firm’s rackets are extremely light due to the use of a magnesium-graphite alloy that was invented by the firm’s founder. Each standard-size racket uses 0.125 kilograms of the alloy and each oversize racket uses 0.4 kilograms; over the next two-week production period only 80 kilograms of the alloy are available. Each standard-size racket uses 10 minutes of manufacturing time and each oversize racket uses 12 minutes. The profit contributions are $10 for each standard-size racket and $15 for each oversize racket, and 40 hours of manufacturing time are available each week. Management specified that at least 20% of the total production must be the standard-size racket. How many rackets of each type should CSD manufacture over the next two weeks to maximize the total profit contribution? Assume that because of the unique nature of their products, CSD can sell as many rackets as they can produce.
Answer:
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total profit contribution = (165 x $15) + (42 x $10) = $2,895
Explanation:
materials machine hours profit
standard size 0.125 kg 1/6 $10
oversize 0.4 kg 1/5 $15
constraints 80 kilograms of materials
40 hours of manufacturing
profit per machine hour:
standard size $10 x 6 = $60 x 40 hours = $2,400 (total possible production = 240 rackets)
oversize $15 x 5 = $75 x 40 hours = $3,000 (total possible production = 200 rackets)
profit per kilogram of alloy:
standard size $10 / 0.125 = $80 x 80 kgs = $6,400 (total possible production = 480 rackets)
oversize $15 / .4 = $37.50 x 80 hours = $3,000 (total possible production = 200 rackets)
since the most important constraint is the manufacturing hours available, the company should try to produce the products that yield the highest contribution margin per machine hour. In this case, at least 20% of total production must be standard size rackets, so the remaining 80% should be oversize rackets that yield a higher profit.
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total manufacturing time = 40 hours
if we produce 166 oversize rackets and 41 standard size rackets, total manufacturing time will exceed 40 hours (40.03 hours exactly).
Disturbed Corp. needs to raise $57 million to fund a new project. The company will sell shares at a price of $23.70 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. The direct flotation costs associated with the issue are $725,000 and the indirect costs are $445,000. How many shares need to be sold?
Answer: 2653438 shares
Explanation:
From the information given in the question, the following can be deduced:
The share price will be:
= $23.70 × (1 - 7.5%)
= $23.70 × (1 - 0.075)
= $23.70 × 0.925
= $21.9225
The money that will be raised will be:
= 57,000,000 + 725,000 + 445,000
= $58,170,000
The number of shares that are needed to be sold will be:
= $58,170,000/$21.9225
= 2653438 shares
Use the following selected financial information for Wilcox Corporation to answer questions 11-20. Wilcox Corporation Income Statement For the Year Ended December 31, 20XX Net sales $2,870 Cost of goods sold 1,985 Gross profit $ 885 Operating expenses 620 Operating profit $ 265 Interest expense 40 Earnings before taxes $ 225 Income tax expense 80 Net profit $ 145 Wilcox Corporation Balance Sheet December 31, 20XX Assets Liabilities and stockholders' equity Current assets Current liabilities Cash $ 25 Accounts payable $ 85 Short-term investments 15 Accrued liabilities 45 Accounts receivable 70 Total current liabilities 130 Inventory 150 Long-term debt 240 Total current assets 260 Total liabilities 370 Long-term assets Stockholders' equity Net PPE 390 Common stock and PIC 80 Goodwill 210 Retained earnings 410 Total stockholders' equity 490 Total assets $860 Total liabilities and equity $860 WilcoxCorporation Statement of Cash Flow Information For the Year Ended December 31, 20XX Cash from operating activities $150 Investing activities: Capital expenditures $ 60 Acquisitions $ 10 Financing activities: Proceeds from long-term borrowing $ 50 Payments on long-term borrowing $ 25 Payments of cash dividends $ 20 Cash paid for interest $ 10 Cash paid for income taxes $ 75 Wilcox’s average collection period is:
Answer:
Wilcox’s average collection period is 9 days.
Explanation:
The average collection period can be described as how long it takes a company to get paid by the amount of money its clients are owing it in terms of accounts receivable (AR).
Average collection period can be calculated using the following formula:
ACP = (Accounts receivable / Net sales) * 365 days .............. (1)
Where, for this question;
ACP = Average collection period = ?
Accounts receivable = $70
Net sales = $2,870
Substituting the values into equation (1), we have:
ACP = ($70 / $2,870) * 365 days
ACP = 0.024390243902439 * 365 days
ACP = 8.90 days, or approximately 9 days
Therefore, Wilcox’s average collection period is 9 days.
Company X, which is a chemical manufacturer, uses crude oil and buys it in the spot market on a monthly schedule. A crude oil swap is quoted by the dealer at $25. Which of the following statements is correct?a. The company should sell the swap to hedgeb. In a month when the spot price of oil is above $25, the company will pay the difference to the counter partyc. In a month when the spot price is below $25, the company will pay the difference to the counter party
Answer:
c. In a month when the spot price is below $25, the company will pay the difference to the counter party
Explanation:
Since Company X uses crude oil, the company buys the swap to hedge in the swap market, so option A is not appropriate because it buys the swap, which pays the counterparty when the spot price falls below $ 25. so correct option is c. In a month when the spot price is below $25, the company will pay the difference to the counter partyA company issues 9%, 7-year bonds with a par value of $260,000 on January 1 at a price of $273,732, when the market rate of interest was 8%. The bonds pay interest semiannually. The amount of each semiannual interest payment is:
Answer:
$11,700
Explanation:
The semi annual interest = Coupon rate × nominal value × 1/2
= 9% × $260,000 × 1/2
= $11,700
We prorated the interest into two in order to account for six months.
Suppose you invest equal amounts in a portfolio with an expected return of 16% and a standard deviation of returns of 18% and a risk-free asset with an interest rate of 4%. Calculate the expected return on the resulting portfolio. Group of answer choices
Answer: 10%
Explanation:
You invest equal amounts in a portfolio yielding 16% and a risk-free asset yielding 4%.
The expected return will be a weighted average of these two;
= (Weight of the Portfolio * Portfolio return) + (Weight of the Portfolio * risk-free rate)
= (0.5 * 16%) + (0.5 * 4%)
= 8% + 2%
= 10%
"Gettysburg Grocers’ "stock is expected to pay a year-end dividend, D1, of $2.00 per share. The dividend is expected to grow at a constant rate of 5%, and the stock has a required return of 9%. What is the expected price of the stock five years from today?
Answer:
$63.81
Explanation:
Current price is computed as follows:
= Expected dividend / (required rate of return - growth rate)
= $ 2 / (9% - 5%)
= $ 50
So, the price in 5 years will be as follows:
= Current price x (1 + growth rate)^5
= $ 50 x 1.05^5
= $50 x 1.2762
= $ 63.81
Sand Key Development Company estimates that it will generate an operating income of $7.25 million. Which financing option should Sand Key use?
Answer: debt financing option
Explanation:
Debt financing is a way by which an economic agent such as the individual, firm or the government gets enough money in order to meet a particular need.
Debt financing can be through loans from family and friends, personal loans, bank loans, credit cards etc. Since Sand Key Development Company estimates that it will generate an operating income of $7.25 million, the company can use debt financing.
Eiffel Corporation is a 100-percent owned French subsidiary of Tower Corporation, a U.S. corporation. During the current year, Eiffel paid a dividend of €500,000 to Tower. Assume an exchange rate of €1 = $1.50. Withholding taxes of €2,500 were imposed on the dividend. The dividend is paid out of earnings and profits that have not been subject to the deemed dividend rules under subpart F or GILTI. Compute the tax consequences to Tower as a result of this dividend.
Answer:
Eiffel Corporation
Computation of the tax consequences to Tower:
Withholding tax = €2,500 x $1.50 = $3,750.00
Domestic Corporation tax = 156,712.50
Total tax consequence = $160,462.50
Explanation:
a) Data and Computations:
Dividend = €500,000
Withholding tax = €2,500
Net after w/tax = €497,500
Exchange rate = €1 = $1.50
Therefore, net dividend after withholding tax = €497,500 x $1.50
= $746,250
Corporation tax rate = 21% of $746,250
= $156,712.50
Tower will suffer a withholding tax burden of $3,750 when translated into dollars and a corporation tax on income totalling $156,712.50 based on the TCJA tax rate of 21% instead of the former 35%.
Compared to countries with less economic freedom, countries with more economic freedom achieve higher per person income levels, but they also have higher poverty rates.grow more rapidly, but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies.achieve both higher income levels per person and lower rates of poverty.grow less rapidly and experience higher poverty rates.
Answer:
The correct answer is: Achieve higher per person income levels, but they also have higher poverty rates.
Explanation:
What happens is that in countries with greater economic freedom, there is the free market, which is an economic form of the capitalist system that allows trade to be conducted free of external forces, being guided by the law of supply and demand. This system allows greater economic interaction with internal and external economic agents whose main objective is to generate profits.
The strong industrialization resulting from the capitalist system causes the greatest economic growth in a country and can increase the levels of per capita income, but it also generates greater social inequality that directly affects the growth of poverty rates. Generally, the main indicators of economic growth, such as GDP, have some limitations to indicate the distribution of wealth because they do not consider variables that include the well-being of the population.
Upon starting her new position, Brenda is given a _______ that details the tasks, duties, and responsibilities considered a part of her position.
Answer:
The answer is job description (JD).
Explanation:
The job description is the summary of tasks, duties, and responsibilities for a particular position. The job description also includes the requirements for the position holder. In some cases, it may details the reporting line, compensation and benefits regarding to the job.
The Restaurant Group manufactures the bags of frozen French fries used at its franchised restaurants. Last week, purchased and used pounds of potatoes at a price of per pound. During the week, 2,100 direct labor hours were incurred in the plant at a rate of $12.45 per hour. The standard price per pound of potatoes is $1.00, and the standard direct labor rate is $12.15 per hour. Standards indicate that for the number of bags of frozen fries produced, the factory should have used 95,000 pounds of potatoes and 2,000 hours of direct labor.
1. Determine the direct material price and quantity variances. 2. Think of a plausible explanation for the variances found in Requirement 1.3. Determine the direct labor rate and efficiency variances. 4. Could the explanation for the labor variances be tied to the material's variances? Explain.
Answer:
Explanation:
The question was missing the actual amount of potatoes used and their actual price = 98,000 pounds at $0.85 per pound:
1. Determine the direct material price and quantity variances.
direct materials price variance = AQ x (AP - SP) = 98,000 x ($0.85 - $1) = $14,700 favorable
direct material quantity variance = SP x (AQ - SQ) = $1 x (98,000 - 95,000) = $3,000 unfavorable
2. Think of a plausible explanation for the variances found in Requirement 1
Since the actual price of potatoes was less than the standard price, the price variance was favorable. But since the actual quantity used was more than the standard quantity, the quantity variance was unfavorable.
3. Determine the direct labor rate and efficiency variances.
direct labor rate variance = AH x (AR - SR) = 2,100 x ($12.45 - $12.15) = $630 unfavorable
direct labor efficiency variance = SR x (AH - SH) = $14.15 x (2,100 - 2,000) = $1,415 unfavorable
4. Could the explanation for the labor variances be tied to the material's variances?
Probably the labor efficiency variance since more materials had to be processed, but the labor rate variance is completely independent from the materials variances.
Employers cite dressing inappropriately as one of the biggest mistakes job applicants make in interviews. True or False
Answer:
True
Explanation:
If you dress inappropriately, that is not showing a good first impression. Most, if not all jobs want to have employees that can dress well, cooperate, and work well with others.
Your text outlines three basic categories of electronic commerce applications: business-to-consumer (B2C), business-to-business (B2B) and consumer-to-consumer (C2C). B2C applications:_______.
A. Involve businesses developing attractive electronic marketplaces to entice customers and sell products and services to consumers.
B. Involve both electronic business marketplaces and direct market links between businesses .
C. Involve consumers buying and selling with each other in an auction process at an auction website, as well as personal advertising of products or services to buy or sell at electronic newspaper sites or personal websites.
D. None of the choices are correct.
Answer:
A. Involve businesses developing attractive electronic marketplaces to entice customers and sell products and services to consumers.
Explanation:
The Business to Consumer (B2C) sales strategy corresponds to a type of sale aimed at the final consumer. This sale takes place at retail, and occurs according to the consumer purchase decision process, which identifies their needs, judges the options according to their preferences and desires and finally chooses the option that best suits their search for a particular product or service.
Therefore, in the B2C strategy, retail companies have as main objective to create in the consumer the desire for a purchase, so the most appropriate option for this issue is that developing attractive electronic markets will help the company to attract customers and sell products and services to consumers.
a project that will last for 8 years is expected to have equal annual cash flows of $97,900. If the required return is 7.6 percent, what maximum initial cash flows of $97,900
Question:
MC algo 5-28 Calculating NPV A project that will last for 8 years is expected to have equal annual cash flows of $97,900. If the required return is 7.6 percent, what maximum initial investment would make the project acceptable?
Multiple Choice $516,751.56 $571,237.51 $1,026,395.85 $482,301.46 $550,008.71
Answer:
PV of cash inflow = $571,237.5
Explanation:
The maximum initial investment amount to be paid is the present value of the series of the annual cash inflow discounted at the opportunity cost rate of 7.6% per annum.
In other words,the maximum to be paid for the investment should be equal to the value today of the series of eight equal annual cash flow of $97,900 discounted at 7.6%
This is given in the relationship below:
PV of cash inflow = A ×( 1- (1+r)^(-n))/r )
A- equal annual cash - 97,900. r-rate of return - 7.6%, n-number of years- 8
PV = 97,900 × ( 1 - (1+0.076)^(-8)/0.76)= 571,237.5
PV of cash inflow = $571,237.5
What is International trade also list the importance of International trade.
Answer:
International trade is buying and selling goods and services across international boundaries. International trade plays a very good role in economic activities and performance of countries around the world. International trade benefit countries in many ways: 1- increasing in production and consumption as a result of specialization, 2- greater choices for consumers due to the competition between traders to get the best choice for consumers. 3- lower prices 4- trade is great source for the flow of service and technology. International trade is the engine of growth.
_____ is the tendency of managers to miss the significance of disruptive changes because they are focused on investing in and making incremental improvements to their core profitable businesses.
Answer:
The Innovator's Dilemma
Explanation:
The innovator dilemma refers to the confusion related to the decision with respect to applying new innovation, technologies, meeting the current customers needs that beneficial to the company
Here in the given situation, the dilemma with respect to the innovator would made the importance related to changes that can disturb it as they focused on investing part, incremental improvements, etc
Therefore it is an innovator's dilemma
Identify factors that could prevent an older, established company from effecting an enterprise-wide, customer-centric culture.
Answer:
A more established company may find it difficult to implement an enterprise-wide, customer-centric culture due to the following reasons:
A) Existence of a Multi-Product Business Model
A business entity that is well established with a lot of years under its belt will find it a tough challenge to shift from a product-oriented business model to a customer-oriented business model.
To be product-focused simply means that that a company has woven its organisational structure around products. For examples, a company that is into the gaming business may have teams for their Sports Betting Section, another for their online gaming section, game hardware section, gaming apps section etc.
First, for these various teams, their performance metric will largely depend on how functionally efficient their products are.
Second, techy or geeky staff are seldom efficient when it comes to emotional intelligence - a key requirement for being customer efficient.
One way to handle this is to ensure that there is a central Customer Relationship Management team that oversees the customers for each product.
B) Organisational Inflexibility
As direct to the point as it sounds, getting market intelligence for with the intention to use them for decision making is challenging. What is tougher is the ability to implement the insights from such intelligence to effect a turn around in the way customers perceive and respond to a company's offerings.
The ability to quickly take gather market intel, agree on a strategic direction based on same and execute can be referred to organisational agility.
The more bureaucratic and hierarchical an organisation is (this, by the way, characterises older and more established business systems) the less agile it is likely to be.
Cheers!
"A customer invests $50,000 in a non-qualified variable annuity. Over the years, it has grown in value to $110,000. The customer’s cost basis in the annuity contract is::"
Answer:
The customer's cost basis in the annuity contract is $50,000.
Explanation:
The customer's cost basis in the annuity contract is the initial payments or premiums made in an annuity amounting to $50,000. This amount is usually taxed at the initial point. This implies that the $110,000 which the annuity has accumulated to will no longer be taxed. The customer will enjoy her lump sum and withdrawals undisturbed by the Internal Revenue Service.
