Internal or External Acquisitions:
No Opportunity Costs
The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $40 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows:

Direct materials $15
Direct labor 11
Variable overhead 6
Fixed overhead 18
Total $50
The Wheel Division has been selling 500,000 wheels per year to outside buyers at $60 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $56 per wheel.

(a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division.

(b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division.

Answers

Answer 1

Answer:

A. Profit per wheel      = $8

B. Total benefit to Motor Corp. = $4,320,000

Explanation:

Requirement A

We can calculate the net benefit/cost to the wheel division of accepting the offer from van division  by deducting all the variable cost from the selling price offered by van division

Selling price           = $40

Direct material        = $15

Direct labor             = $11

Variable Overhead = $6

Profit per wheel      = $8

Requirement B Net benefit to Motor car corp.

Increased the profit of wheel division by accepting the offer

180,000 x $8 =$1,440,000

Savings of van division by placing an order to wheel division

180,000 x $16(w) = $2,880,000

Total benefit to Motor Corp. = $1,440,000 + $2,880,000

Total benefit to Motor Corp. = $4,320,000

Working

Outside supplier price - Price offered by van division

$56 - $40

$16


Related Questions

At the end of the current accounting​ period, account balances were as​ follows: Cash, $26,000​; Accounts​ Receivable, $42,000​; Common​ Stock, $18,000​; Retained​ Earnings, $12,000. Liabilities for the period​ were:

Answers

Answer: Liabilities =$38,000

Explanation: An asset whether tangible or intangible is a source of value to a company examples are Cash, investments, accounts receivables etc

Liabilities are referred to the debts owed to a company or buisness at a particular period eg bank debts, tax owed, wages owed etc.

Equity is the measure of value of a company"s asset eg  Common stock, retained earnings, , preferred stock etc.

The three above are related using the equation below

Assets = Liabilities + Equity.

Total Liabilities = Assets - Equity

Total asset = Cash + Account receivables = 26,000+42,000=68,000

Total equity = Common stock + retained earnings = 18,000+12000=30,000

Total liabilities =Total asset -total equity

= 68,000-30,000

= $38,000

A company’s common stock has a market value of $63.18 per share and its next dividend is expected to be $3.26 per share. The stock’s beta is 1.2, the tax rate is 35%, and the market risk premium is 6.1% per year. The yield to maturity for the company’s long-term debt is 6.4% per year. If the riskiness of the company’s equity requires that it provide a risk premium of 3.2% per year over the yield on its long-term debt, what is the company’s annual cost of internal equity financing?

Answers

Answer:

Cost of equity = 9.6%

Explanation:

The cost of equity is the return a firm theoretically pays to its equity investors, In order to calculate the cost of equity here we need to add up the yield to maturity for the company's long term debt and the risk premium per year over the yield on its long term debt.

Solution

Cost of equity = Yield to maturity + Risk premium

Cost of equity = 6.4% + 3.2%

Cost of equity = 9.6%

Chuck has $2,500 invested in a bank that pays 4% annually. The length of time it will take for his funds to double is closest to:

Answers

Answer:

The answer is 17.67 years.

Explanation:

Present value is $2,500

Future value of the money to be double of the present value. This means the future value will be $5,000($2,500 x 2)

Interest rate is 4%

Number of years or periods to reach this $5,000 is unknown. So we are looking for this.

To compute this number of periods, lets use Financial calculator.

I/Y = 4; PV= -2,500; FV= 5,000; CPT N= 17.67 years.

Therefore, the number of years to accumulate to $5,000 is 17.67 years

Given a stock index with a value of $1,200, an anticipated dividend of $45, and a risk-free rate of 6%, what should be the value of one futures contract on the index

Answers

Answer: $1,227

Explanation:

The value of the futures contract should be calculated by the formula;

= Stock Index Value * ( 1 + risk free rate ) - dividends

= 1,200 * ( 1 + 0.06) - 45

= $1,227

Colorado experiences a record snowfall during the winter season. What impact will this have on the market for snowmobiles?

Answers

Answer:

The demand curve for snowmobiles will increase and the price of snowmobiles will rise.

Explanation:

Demand is defined as the quantity of a good that is requested by a customer at a given price and time.

In the given instance there was heavy snowfall during the winter season that will result in more people wanting to go out on the snow.

When there is a change in demand as a result of a factor apart from price demand shifts.

In this case demand will shift to the right (increase).

Demand will increase at an increased price.

This is illustrated in the attached diagram.

Demand shifts from D1 to D2 and price increases from P1 to P2

Company ABC is required to pay their customers $20,000 after 3 years. Based on an annual effective interest rate of 4%, Andy, the company’s actuary, uses full immunization strategy to construct a portfolio of assets using a 2-year zero-coupon bond and a 4-year zero-coupon bond. Calculate the par amount for the 2-year zero-coupon bond assuming full immunization is met.

Answers

Answer:

Par amount = $9,615.39

Explanation:

The condition that must hold in order to meet full immunization are as follows:

Condition 1: PV(assets) = PV(liabilities)

Condition 2: MD(assets) = MD(liabilities) or P'assets = P'liabilities

Condition 3: There is one asset cash inflow before the liability cash outflow, and there is also one asset cash inflow after the liability cash outflow.

Where PV denotes Present Value and MD denotes Macaulay Duration.

PV(liabilities) = Amount required to pay / (1 + i)^n ............ (1)

Where;

Amount required to pay = $20,000

i = interest rate = 4%

n = number of years after = 3 years

Substituting the values into equation (1), we have:

PV(liabilities) = $20,000 / (1 + 4%)^3 = 17,779.93

Let;

A = Weight of two-year-zero-coupon bond in the portfolio

n = Macaulay Duration of n-year-zero-coupon bond

Therefore, we can construct a portfolio of assets using a 2-year zero-coupon bond and a 4-year zero-coupon bond as follows:

A(2) + (1 – A)(4) = 3

2A + 4 – 4A = 3

2A – 4A = 3 – 4

-2A = - 1

A = -1/-2

A = 0.5

We can now calculate the par amount as follows:

Par amount = PV(liabilities) * A * (1 + i)^t .............. (2)

Where t = 2 as the duration of the bond

Substituting the values into equation (2), we have:

Par amount = 17,779.93 * 0.5 * (1 + 4%)^2

Par amount = 17,779.93 * 0.5 * 1.04^2

Par amount = 17,779.93 * 0.5 * 1.0816

Par amount = $9,615.39

Therefore, the par amount for the 2-year zero-coupon bond assuming full immunization is met is $9,615.39.

A project with an initial cost of $27,250 is expected to generate cash flows of $6,600, $8,700, $9,100, $8,000, and $7,400 over each of the next five years, respectively. What is the project's payback period?

Answers

Answer:

It will take 4 years and 130 days to recover for the initial investment.

Explanation:

Giving the following information:

A project with an initial cost of $27,250 is expected to generate cash flows of $6,600, $8,700, $9,100, $8,000, and $7,400

The payback period is the time required to recover for the initial investment:

Year 1= 6,600 - 27,250= -20,650

Year 2= 8,700 - 20,650= -11,950

Year 3= 9,100 - 11,950= -2,850

Year 4= 8,000 - 2,850= 5,150

To be more accurate:

(2,850/8,000)*365= 130

It will take 4 years and 130 days to recover for the initial investment.

A sales tax of $1 per unit of output is placed on one firm whose current equilibrium price is $5 and current equilibrium quantity is 100 units. If you know that the elasticity of demand is -1 and the elasticity of supply is (infinity), then after the tax:

a. pb=6, ps=5, and QT=unknown but less than 100
b. pb=4, ps=5, and QT=unknown but less than 100
c. pb=6, ps=5, and QT=100
d. pb=4, ps=5, and QT=100

Answers

Answer:

B

Explanation:

B is the correct answer

The operating margin measures tells you that for every dollar of sales XXXX dollars makes it to the net income line on the income statement.
A. True
B. False

Answers

Answer:

A. True

Explanation:

The Operating Margin is the profit obtained for every dollar of sale and this is the sames as saying a certain amount of sales makes it to the net income line on the income statement.

In Sammy's fast food restaurant, she produces sandwiches, soups, and other items for customers in her town. Which of the following is a fixed input for the production function at Sammy's restaurant?
a) the employees hired to help make the food.
b) the loaves of bread used to make sandwiches.
c) the cans of tomato sauce used to make soups.
d) the dining room where customers eat their meals

Answers

Answer:

d) the dining room where customers eat their meals

Explanation:

In the given situation, since it is mentioned there is a Sammy's fast food restaurant that generates the sandwiches, soups, and other items for customers

So based on the options given, the last option should be considered as a fixed input for the production function as the dining room is a fixed plus non-movable item so the same is to be considered

hence, the correct option is d.

Answer:

D

Explanation:

I would say D because you want to give a good impression on your customers so they want to come back and know that you will take good care of them.

Jordan is the marketing head of Hastings Comprehensive Systems. He usually strives for long-term improvement rather than short-term profit, regardless of the economic environment. In the context of Deming's 14 points of quality, this is an example of

Answers

Answer:

Create constancy of purpose

Explanation:

Deming 14 points of quality are recommended management strategy to transform business effectiveness.

Deming postulated that by increasing quality one is able to reduce cost and increase efficiency of a business.

The first of his 14 points is to create a constancy of purpose. This is achieved by striving for long-term improvement rather than short-term profit, as is done by Jordan in the given scenario.

The 14 points of Deming are given below:

Create a constancy of purpose

Adopt the new philosophy

Stop depending on inspections

Using a single supplier for one item

Improve constantly and forever

Use training on the job

Implement leadership

Eliminate fear

Breakdown barriers between departments

Get rid of unclear slogans

Eliminate management by objectives

Remove barriers to pride of workmanship

Implement education and self improvement

Make transformation everyone's job

erekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 3,200 machine-hours Variable overhead costs: Supplies $ 16,640 Indirect labor 29,120 Fixed overhead costs: Supervision 15,400 Utilities 6,600 Depreciation 7,600 Total overhead cost $ 75,360 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,100 machine-hours rather than 3,200 machine-hours

Answers

Answer:

Variable overhead= $44,330

Fixed overhead= $29,600

Total overhead= $73,930

Explanation:

Giving the following information:

Total variable overhead= $45,760

Total fixed overhead= $29,600

Total overhead cost= $75,360

First, we need to calculate the  variable predetermined overhead rate:

Variable predetermined overhead rate= 45,760/3,200= $14.3 per machine hour

Now, for 3,100 hours:

Variable overhead= 14.3*3,100= $44,330

Fixed overhead= $29,600

Total overhead= $73,930

You have an annuity which pays $1,200 every two years. The first payment is two years from now and the last payment is ten years from now. You can trade that annuity for another annuity of equivalent present value, which pays $180 per quarter starting today. The interest rate for both annuities is 4% per annum convertible quarterly. If you took the second annuity, how many quarterly payments would you receive? The last payment may be less than $180 but not more than $180.

Answers

Answer:

31 payments

Explanation:

the present value of the first annuity is:

$1,200 / (1 + 1%)⁸ + $1,200 / (1 + 1%)¹⁶ + $1,200 / (1 + 1%)²⁴ + $1,200 / (1 + 1%)³² + $1,200 / (1 + 1%)⁴⁰ = $1,108.18 + $1,023.39 + $945.08 + $872.76 + $805.98 = $4,755.39

to determine the length of the second annuity:

PV = annuity payment x annuity factor

annuity factor = PV / annuity payment = $4,755.39 / $180 = 26.4188333

using an annuity table we must look for a present value annuity factor that corresponds to 1% interest rate and is close to 26.4188333

the annuity factor is between 30 and 31 payments. Since the final payment has to be less or equal to $180, we have to choose 31 payments.

When a job analyst watches employees directly or reviews films of workers on the job, which analysis method is being used?

Answers

Answer:

Observation method

Explanation:

Through observation, this analyst collects data by watching the employees directly. This is participatory because the analyst has to involve himself in the work environment where this employees are in other to collect data. This method would allow the analyst to have more reliable insights. He would get data based on what the employees do rather than what the Employees tell him that they do.

Downtown Bancshares has 40,000 shares of $8 par common stock outstanding. Suppose Downtown declares and distributes a 16% stock dividend when the market value of its stock is $20 per share.
1. Journalize Downtown's declaration and distribution of the stock dividend on May 11. An explanation is not required.
2. What was the overall effect of the stock dividend on Downtown's total assets? On total liabilities?

Answers

Answer and Explanation:

1. The journal entry is shown below:

Retained earnings Dr (40,000 shares × 16% × $20) $128,000

         To Common stock   (40,000 shares × 16% × $8) $51,200

         To Paid in capital in excess of par value - common stock $76,800

(Being the declaration and the stock distribution is recorded)

2. Since the retained earnings is debited which reduced the equity by $128,000 but at the same time it also increased the equity via common stock and paid in capital by $128,000 so the overall effect should be NIL or zero

Also the assets and liabilities remains unaffected

McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $3.70 per share with the first dividend exactly 14 years from today. If the required return is 3.6 percent, what is the current price of the stock?

Answers

Answer:

$64.89

Explanation:

Calculation for the current price of the stock

First step is to find the preference stock value at end of 13 years

Using this formula

P13= Annual dividend/Required return

Let plug in the formula

P13=$3.70/.036

P13= $102.78

The second step is to calculate for the current price of the stock

Using this formula

P0= P13/(1+Required return)^Dividend years

Let plug in the formula

P0= $102.78/(1 + .036)^13

P0=$102.78/(1.036)^13

P0=$102.78/1.5837

P0=$64.89

Therefore the current price of the stock will be $64.89

A project has cash flows of -152,000, 60,800, 62300, and 75000 for years 0 to 3 respectively. The required rate of return is 13 years percent. Based on the internal rate of return of__________percent, you should________the project.

Answers

Answer:

Based on the IRR of 14.05 percent, you  should be accept the project

Explanation:

Internal rate of Return is the discount rate of that equates the present value of cash inflows to the initial cost. It is the maximum cost of capital that can be used to evaluate a project without causing harm to the shareholders.

It is calculated as follows:

IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%

NPV = PV of cash inflows - initial cost

Step 1: NPVa at 13% discount rate

PV of cash inflow =  60,800× 1.13^(-1) + 62300 ×1.13^(-2) +   75000 ×1.13^(-3)

                           =  154,574.11  

NPVa =  154,574.11   - 152000 =  2,574.11  

Step 2: NPVb  at 20%

PV of cash inflow = 60,800× 1.20^(-1) + 62300 ×1.20^(-2) +   75000 ×1.20^(-3)   =  137,333.33  

NPVb =  137,333.33   - 152,000 =  (14,666.67)

Step 3: IRR

IRR = 13% + ( 2,574.11  /(2,574.11  + 14,666.67) )× (20-13)%

IRR = 14.05%

Based on the IRR of 14.05%, the project you  should be accept the project

Since the IRR (14.05%) is greater than the required rate rate (13%) , the project should be accepted. An IRR which is  higher than the hurdle rate implies that the project would increase the wealth of the shareholders

Job Searching in the Digital Age(Part II) Which of the following are job boards?
A. Open Post
B. College Grad
C. Big Careers
Users of ________ are increasingly using the sites to prospect for jobs.
Which of the following is an advantage to using networks and referral in the hidden job market?
A. Between 50 and 80 percent of all jobs are found there
B. Since there are fewer jobs in the hidden job market, a more targeted search can be conducted
C. It includes all jobs posted on job boards
Which of the following is an example of a way to search for jobs on the open job market?
A. Newspapers
B. Social networks
C. Personal networking
D. Referrals
E. Job boards
Which of the following will help protect you when posting to online job boards?
A. Include references
B. Only use sites where you publicly post
C. Only use sites where you pay to post
D. Remove your posted résumés when your job search is over

Answers

Answer and Explanation:

1. B. College Grad: college grad is a job board used by millions for their job search. Other popular job boards include: Monster, Indeed and career builder

2. Social networking:social networking sites are increasingly used today in job search. A popular example is LinkedIn which is used for professional connections and networking.

3. B. Since there are fewer jobs in the hidden job market, a more targeted search can be conducted : the hidden job market consisting of personal networking and referrals has fewer jobs but is very effective in selecting the right people for a job

4.A. Newspapers E. Job boards: open job markets consist Jon's listed publicly in newspapers, Jon boards and websites for all qualified candidates to apply. It is different from the hidden job market which is usually referral based such as in personal network and social network, former colleagues or former schoolmates and alumni groups.

5. D. Remove your posted résumés when your job search is over: use reputable sites in your job search and don't post private data. Don't jump on every job post. Endeavor to remove your resume from the site when your search is over

Concord Corporation has 8,800 shares of common stock outstanding. It declares a $3 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend

Answers

Answer:

Declaration date:

Dr retained earnings $26400

Cr dividends payable          $26400

Payment date:

Dr dividends payable $26400

Cr Cash                                                  $26400

Explanation:

Total dividend declared is the number of shares multiplied by cash dividend per share

total dividend=$3*8,800=$26400

On the record date no entries are required since record date, is just about verifying the bonafide shareholders.

On declaration date,dividends payable would be credited with $26,400 while retained earnings is debited.

On payment date,dividends payable is debited and cash credited

Hawley company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes.
Direct materials $550
Direct labor 950
Variable manufacturing overhead 150
Fixed manufacturing overhead 1,125
Total manufacturing cost $2,775
Number of cakes / 100
Cost per cake $28
Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Hawley expects to retain the equipment. Hawley can buy the cakes for 28$.
1. Should Hawley make the cakes or buy​ them? Why?
2. If Hawley decides to buy the​ cakes, what are some qualitative factors that Hawley should also​ consider?
1. Should Hawley make the cakes or buy​ them? Why? ​(For the Difference​ column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes​ in-house.)
Make Outsource Difference
Cake costs cakes cakes (make—outsource)
Variable costs:
Direct materials
Direct labor
Variable manufacturing overhead
Purchase cost
Total differential cost of cakes
Hawley (should, should not) continue to make the cakes. Outsourcing will (decrease, increase) profits.
2. If Hawley decides to buy the cakes, what are some qualitative factors that Hawley should also consider?
A. Qualitative factors include considering sunk costs and​manager's opinions.
B. Qualitative factors include separating fixed and variable costs.
C. Qualitative factors include quality and​ on-time delivery.
D. Qualitative factors include contribution margins of the various products produced.

Answers

Answer:

1. Continue to Make the Cakes. Because the Cost of Outsourcing is greater that the cost of making by $1,150.

2. C. Qualitative factors include quality and​ on-time delivery.

Explanation:

Analysis of the Make or Buy Decision

                                                                Make        Outsource     Difference

Cake costs cakes cakes

Variable costs:

Direct materials                                        $550                $0               $550

Direct labor                                               $950                $0               $950

Variable manufacturing overhead           $150                $0                $150

Fixed manufacturing overhead             $1,125             $1,125               $0

Purchase cost                                             $0              $2,800        ($2,800)

Total differential cost of cakes             $2,275           $3,925          ($1,150)

Qualitative Factors.

Are non-monetary factors that need to be considered in decision making.

What is the value of a zero-coupon bond with a par value of $1,000 and a yield to maturity of 6.60%? The bond has 19 years to maturity.

Answers

Answer:

$296.90

Explanation:

For computing the value of the zero coupon bond we need to apply the present value formula i.e to be shown in the attachment below:

Given that,  

Future value = $1,000

Rate of interest = 6.60%

NPER = 19 years

PMT = $0

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the value of zero coupon bond is would be $296.90

On January 31, 2016, Danvers Logistics, Inc., issued five-year, 7% bonds payable with a face value of $10,000,000. The bonds were issued at 96 and pay interest on January 31 and July 31. Danvers Logistics, Inc., amortizes bond discount by the straight-line method.

Record:
a. Issuance of the bonds on January 31, 2016.
b. The semiannual interest payment and amortization of bond discount on July 31, 2016.
c. The interest accrual and discount amortization on December 31, 2016.

Answers

Answer:

Journal entries are given below

Explanation:

Journal Entries

Requirement A:  Issuance of the bonds on January 31, 2016.

                                                      Debit            Credit

Cash (w)                                    $9,600,000  

Discount on bonds payable     $400,000  

Bonds payable                                               $10,000,000

Working

Cash = 10,000,000*0.96 = $9,600,000  

Discount on bonds payable = 10,000,000*0.04 = $400,000  

Requirement B: The semiannual interest payment and amortization of bond discount on July 31, 2016.

                                                       Debit        Credit

Interest expense                      $390,000  

Cash (w)                                                        $350,000

Discount on bonds payable (w)                    $40,000

Working

Cash = 10,000,000x 0.07 x 6/12 = $350,000

Discount on bonds payable = 400000/(5months*2) = $40,000

Requirement C: The interest accrual and discount amortization on December 31, 2016.

                                                        Debit          Credit

Interest expense                       $325,000

Cash (w)                                                          $291,666.67

Discount on bonds payable (w)                     $33333.33

Working

Cash = 10,000,000x 0.07 x 5months/12months = 291,666.67

Discount on bonds payable = 400,000/(5*2)*5/6 = 33,333.33

Hoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 145 units per hour. In the month of July, the company operated the production line for a total of 265 hours and produced 30,400 units of output.What was its capacity utilization rate for the month?

Answers

Answer:

79.1%

Explanation:

Hoosier manufacturing operates a production shop that is modelled to have the lowest unit of production

The output rate is 145 units per hour

In the month of July the company operated the production line for 265 hours

30,400 units of output were produced

Therefore, the capacity utilization rate can be calculated as follows

= 30,400 units/265 hours ×145

= 30,400/38,425

= 0.791×100

= 79.1%

Hence the capacity utilization rate for the month is 79.1%

Suppose that the income tax rate is reduced by the federal government and simultaneously a recession hits causing the economy to move below its potential output, this will:

Answers

Answer:

Raise both the cyclical and structural deficits

Explanation:

During economic downturn the cyclical deficit will rise, leading to rise in already structural deficit of federal government. The Structural deficit arises when government continue to spend more than its revenue, and thus cyclical deficit will add upward pressure in structural deficit.

Therefore there will be Raise in both the cyclical and structural deficits

Choose three organizations that you believe have had the greatest impact on the current state of safety and health programs in the United States. Summarize the purpose of each organization, and discuss how you believe you can use these organizations to improve your ability to perform your duties as a safety and health professional.

Answers

The correct answer to this open question is the following.

The three organizations would be OSHA, NIOSH, and NACOSH.

OSHA stands for Occupational Safety and Health Administration. It tries to ensure that the workers labor under the proper safety and health conditions in their workplace.

NIOSH stands for the National Instituto for Occupational Safety and Health. This organization basically is dedicated to researching to know the working conditions of workers in America and make recommendations.

NACOSH stands for the National Advisory Committee on Occupational Safety and Health. It functions as an adviser or counselor to the Department of Labor on safety and security issues.

These three can definitely be used to improve my ability to perform my duties as a safety and health professional in that they include a series of recommendations, programs, and educational tips to be applied in the workplace and diminish the possibility of accidents or how to react in case of one.

An exchange-rate policy in which the government usually allows the exchange rate to be set by the market, but sometimes intervenes is called a __________________ exchange rate system.

Answers

Answer: Managed Float

Explanation:

Also called "Dirty Float", the Managed float is an exchange rate system that allows for the currency of a country to be set by the forces of demand and supply in the market.

However, unlike in a clean float,  the Central bank will occasionally intervene in the market to influence the how fast the currency is changing value or to control the direction it is going.

This is usually done to protect the domestic economy from sudden shocks in the global economy.

Assume that interest rates on 20-year Treasury and 20-year corporate bonds are as follows T-bond = 3.72% AAA = 4.12% A = 4.64% BB = 5.18% The differences in these rates were probably caused primarily by:

Answers

Answer: Default risk differences.

Explanation:

The Default risk is the inherent risk a lender faces that a borrower will not pay them back the debt they want to borrow. The lender will therefore charger a high return to cater for this risk. The higher the risk, the higher the return charged.

T-bonds have no default risk because they are guaranteed by the US Government which is why it's rate is the lowest. For the other bonds, there is something called a Credit rating. Bonds are usually rated on how risky it will be to lend to the company borrowing with AAA being of the lowest risk. Therefore as one goes up from AAA, the bonds will have higher default risks.

Lead time for one of your​ fastest-moving products is 24 days. Demand during this period averages 110 units per day. ​a) What would be an appropriate reorder​ point? nothing units ​(enter your response as a whole​ number). ​b) How does your answer change if demand during lead time​ doubles? nothing units ​(enter your response as a whole​ number). ​c) How does your answer change if demand during lead time drops in​ half? nothing units ​(enter your response as a whole​ number).

Answers

Answer:

a.) reorder point = 2,640 units

b.) reorder point = 5,280 units (reorder point doubles)

c.) reorder point = 1,320 units (reorder point drops in half)

Explanation:

Reorder point is the inventory level (point) at which action is taken (order placed) to replenish the stocked item. It is calculated as follows:

Reorder point = (Lead time × average daily sales) + safety stock

Lead time = 24 days

average daily sales = 110 units

safety stock = 0 (not given)

a.) reorder point = (Lead time × average daily sales) + safety stock

reorder point = (24 × 110) + 0 = 2,640 units

b.) if demand during lead time doubles:

lead time = 24 days

average daily sales = (110 × 2) = 220

∴ reorder point = 220 × 24 = 5,280 units

Therefore the reorder point doubles

c.) if demand during lead time drops in half:

lead time = 24 days

average daily demand = (110 ÷ 2) = 55 units

∴ reorder point = 24 × 55 = 1,320 units

Therefore the reorder point drops in half.

Often management is "under the gun" and want to solve problems and meet deliverables before logically assessing the situation. This problem is related to:________

a. Odecisive leadership
b. stakeholder framing.
c. misguided leadership
d. perceptual defense
e. identifying opportunities.

Answers

Answer:

decisive leadership

Explanation:

Decisive leadership is the leadership in which the leaders have to decide quickly for a particular thing. It is basically a capability for deciding with the speed and clarity of the things happen.

Also the quick decision result in a bad situation without knowing the impact of that decision

Therefore according to the given scenario, the "under the gun" represents the decisive leadership

Digby's balance sheet has $99,131,000 in equity. Further, the company is expecting net income of 3,000,000 next year, and also expecting to issue $4,000,000 in new stock. If there are no dividends paid what will beDigby's book value

Answers

Answer:

Book Value = $106,131,000

Explanation:

DATA

Equity = $99,131,000

Expected Net Income = $3,000,000

New stock issued = $4,000,000

Solution:

We can calculate Digby's Book value by adding Equity, Expected Net Income and New Stock issued.

Calculation:

Book Value = Equity + expected net income + Bew stock issued

Book Value = $99,131,000+ $3,000,000+$4,000,000

Book Value = $106,131,000

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