Answer:
EPS = 2.2
Explanation:
Earning per share is the amount due to each of the ordinary shareholders after settlement of interest due on loans , preferred dividends and tax.
Earnings per share (EPS) = Earnings attributable to ordinary shareholders ÷ Units of shares
Where ;
Earnings attributable to ordinary shareholders = Net income - Preferred dividends
EPS = $770,000 - 0 ÷ 350,000 shares
EPS = $2.2
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity:
Date Cash Effective Decrease in Outstanding
interest interest balance balance
1/1/2021 $207,020
6/30/2021 $7,000 $6,211 $789 206,230
12/31/2021 7,000 6,187 813 205,417
6/30/2022 7,000 6,163 837 204,580
12/31/2022 7,000 6,137 863 203,717
6/30/2023 7,000 6,112 888 202,829
12/31/2023 7,000 6,085 915 201,913
6/30/2024 7,000 6,057 943 200,971
12/31/2024 7,000 6,029 971 200,000
What is the annual stated interest rate on the bonds?
a. 3.5%
b. 6%
c. 7%
d. none of the above
Answer:
c. 7%
Explanation:
According to the given scenario, the computation of the annual stated interest rate on the bonds is shown below:-
Sated interest Rate = Cash interest ÷ Face Value of the bond × 2
= $7,000÷ $200,000 × 2
= 7%
Therefore for computing the annual stated interest rate on the bonds we simply applied the above formula. hence the correct option is c
What is the yield to maturity of a -year, bond with a % coupon rate and semiannual coupons if this bond is currently trading for a price of ?
What is the yield to maturity of a five-year, $5000 bond with a 4.5% coupon rate and semi-annual coupons if this bond is currently trading for a price of $4876?
A) 6.30%
B) 4.50%
C) 4.30%
D) 5.07%
E) 8.60%
Answer:
5.07%
Explanation:
Given the following parameters from the question:
Number of years = 5
N => Number of compounding periods = 5 * 2 = 10
FV => Face Value = $5,000
PV => Present Value = $4876
Percentage rate = 4.5%
PMT => Annuity Payment = Face Value * percentage
=> 5,000 * 0.045 = 225
Given that, it is semi annual rate, we have 225 / 2 = 112.5
CPT YTM or I/Y => Yield to Maturity = 2.53 * 2 = 5.07%
Hence, the final answer is 5.07%
A subcontractor is responsible for outfitting six satellites that will be used for solar research. Four of the six have been completed in a total of 600 hours. If the crew has a 75% learning curve, how long should it take them to finish the last two units?
Answer: ∑Tₓ = 201.222
time required to complete the last two units is 201.222 minutes
Explanation:
Given that,
total time required to four units is 600 hours,
Learning curve applied is 75% and from the learning curve coefficient table, total time factor to complete four units at 75% learning curve is 2.946
so
∑Tₙ = T₁ × total time factor
{ ∑Tₙ is total time required to complete all the units which is 600 hrs, T₁ is Time for first unit, total time factor = 2.946 }
we substitute
∑T₄ = ∑T₁ × total time factor
600 = ∑T₁ × 2.946
∑T₁ = 600/2.946
∑T₁ = 203.666 minutes
Now to get the total time required to complete 6 units, we say:
∑T₆ = ∑T₁ × total time factor
Note that total time factor at this point changes;
( from the learning curve coefficient table, total time factor to complete 6 units at 75% learning curve is 3.934)
so we substitute
∑T₆ = 203.666 × 3.934
∑T₆ = 801.222
Now to find how long should it take them to finish the last two units, we say
∑Tₓ = ∑T₆ - ∑T₄
∑Tₓ = 801.222 - 600
∑Tₓ = 201.222
Therefore time required to complete the last two units is 201.222 minutes
The time required to complete the last two units is 201.222 minutes
Given data
Total time required to four units is 600 hours
Learning curve applied is 75% and 75% learning curve is 2.946
∑Tₙ = T₁ × total time factor
{ ∑Tₙ is total time required to complete all the units which is 600 hrs, T₁ is Time for first unit, total time factor = 2.946 }
we substitute
∑T₄ = ∑T₁ × total time factor
600 = ∑T₁ × 2.946
∑T₁ = 600/2.946
∑T₁ = 203.666 minutes
Now to get the total time required to complete 6 units, we say:
∑T₆ = ∑T₁ × total time factor
so we substitute
∑T₆ = 203.666 × 3.934
∑T₆ = 801.222
Now, we will find how long should it take them to finish the last two units
∑Tₓ = ∑T₆ - ∑T₄
∑Tₓ = 801.222 - 600
∑Tₓ = 201.222
In conclusion, the time required to complete the last two units is 201.222 minutes
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Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400,000 $600,000 Annual net income 30,000 46,000 Net annual cash inflow 110,000 146,000 Estimated useful life 5 years 6 years Salvage value -0- -0- The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.890 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 "The net present value for Project Nuts" is Group of answer choices
Answer:
NPV = $35,868.06
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV for Project Nuts
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-600,000
Cash flow each year from year 1 to 6 = 146,000
I = 10%
NPV = $35,868.06
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Next week, Mortimer is preparing to go to work for the Illinois department of Child Services. He was surprised when his friends told him that he was going to have to pay one percent of his salary to the union that represents the unionized workers that would include Mortimer, whether he joined the union or not - a so-called agency fee to prevent 'free riders'. This was for services provided to Mortimer, including collective bargaining and grievance representation. Mortimer was shocked - no one had told him about this! What advice would you provide to Mortimer?
Answer:
The implication is that the Illinois Department of Child Services is a unionized workplace.
Mortimer will derive better benefits that surpass the costs of membership. He is covered in all collective bargains, even when he resigns his union membership. Unions negotiate for better working conditions, higher pays, and improved benefits.
When Mortimer has any grievance against the department, the union will also represent him, thereby making his life easier since unions can negotiate better with employers than individual workers.
Mortimer is even lucky to find a job at a unionized workplace because the jobs are not usually advertised as union members easily bring in their relatives and friends to occupy such vacancies.
Explanation:
Most of the disadvantages that Mortimer should complain about unions are disadvantages to the employer and not to him as an individual worker. For the employer, the union acts as a form of monopoly that can decide whether the workers would work or not. The unionized workers are not easy to replace with other workers.
Company X was expected to have earnings per share of $0.52 for the upcoming quarter. On the day of the results, the company reported earnings per share of $0.83. What happened to the share price when the stock market opened?
Answer:
Rise in stock price.
Explanation:
In general, the stock price has increased because the expected earning was $0.52 per share but the actual earnings were $0.83. therefore, we can say that stock prices have increased. moreover, there are other factors that may affect the stock price. But in this case. A positive surprise in the earnings per share results in stock price going up.
Inventory at the end of April, 2008: 200 unitsExpected demand during April, 2008: 50 unitsProduction expected during April, 2008: 100 unitsWhat was the inventory at the end of March 2008?
Answer:
beginning inventory= 150 units
Explanation:
Giving the following information:
Endiing inventory= 200 units
Sales= 50 units
Production= 100
To calculate the beginning inventory, we need to use the following formula:
Production= sales + ending inventory - beginning inventory
100= 50 + 200 - beginning inventory
beginning inventory= 250 - 100
beginning inventory= 150 units
Your boss has asked you to hand deliver five invitations to a special luncheon he is hosting. When you receive the
invitations, they have only first and last names but no addresses. You remember that they all live side by side in an
apartment building on Central Street. The boss left the following information with his assistant, but it is all you have. Time to
problem-solve to figure out who lives where!
This much you know for sure Carly has Greg as one next-door neighbor and the Joneses as her other next-door
neighbors. Now it's it up to you to figure out who lives in the other apartments. It may be helpful for you to draw five boxes
to use as a visual guide. Furthermore, writing names on your drawing in pencil will allow you to keep track of the neighbors
as you place them in their homes.
1 The Smiths live in the westernmost apartment, Louis lives in the easternmost
2. Leon has Mia as one next-door neighbor with TJ on the other side.
3. Both Tami and TJ live east of the Williamses.
4. TJ lives next door to the Browns
5. Tom lives west of the Garcias and east of Carly
6. Kris and Tami are next-door neighbors. The Garcias also live next to Tami but on the other side.
7. Nikki lives east of TJ.
Answer:
1)Smiths
2)Nikki
3)Williams
4)Mia
5) Leon
6)TJ
7)Browns
8)Joneses
9)Carley
10)Greg
11)Tom
12)Garcias
13)Tami
14)Kris
15)Loise
Explanation:
On the first day of the fiscal year, a company issues a $8,800,000, 7%, 10-year bond that pays semiannual interest of $308,000 ($8,800,000 × 7% × ½), receiving cash of $7,655,303. Required:Journalize the first interest payment and the amortization of the related bond discount.
Answer and Explanation:
The journal entry is shown below:
Interest expense $403,391
To Cash $308,000
To Discount on note payable $95,391
{($8,800,000 - $7,655,303) ÷ 12}
Here we debited the interest expense as it increased the expenses and credited the cash as it decreased the assets and credited the discount on note payable
_______ appraisals occur between managers and their subordinates whenever the need to discuss ongoing progress and areas for improvement arise.
Answer: Informal
Explanation: appraisals that occur between managers and their subordinates whenever the need to discuss ongoing progress and areas for improvement arise is known as an informal appraisal. Here, a manager provides significant feedback and direction to his employees outside of a formal review meeting thus providing opportunities for coaching and rapport building. It is carried out whenever the manager or supervisor deems it necessary.
[The following information applies to the questions displayed below.]
Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000).
5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000.
7 Macy returns 125 units because they did not fit the customer’s needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory.
8 Macy discovers that 200 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $300 toward the original invoice amount to compensate for the damage.
15
Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. (Allied estimates returns using an adjusting entry at each year-end.)
Answer:
Allied Merchandisers
Journal Entries
Date General Journal Debit Credit
03-May Merchandise Inventory $20,000
To Cash $20,000
05-May Accounts Receivable $21,000
To Sales $21,000
05-May Cost of goods sold $15,000
To Merchandise Inventory $15,000
07-May Sales Returns and allowances $1,750
To Accounts Receivable $1,750
07-May Merchandise Inventory $1,250
To Cost of goods sold $1,250
08-May Sales Returns and allowances $300
To Accounts Receivable $300
15-May Cash $18,571
Sales Discounts $379
($18950*2%)
To Accounts receivable $18,950
($21000-$1750-$300)
In order to document a business transaction in the accounting records of the company, a journal entry is employed. A journal entry is often made in the general ledger, but it can also be made in a subsidiary ledger and subsequently rolled forward into the general ledger after being summarised.
The journal entry has been attached below:
Allied Merchandisers
Journal Entries
Date General Journal Debit Credit
03-May Merchandise Inventory $20,000
To Cash $20,000
05-May Accounts Receivable $21,000
To Sales $21,000
05-May Cost of goods sold $15,000
To Merchandise Inventory $15,000
07-May Sales Returns and allowances $1,750
To Accounts Receivable $1,750
07-May Merchandise Inventory $1,250
To Cost of goods sold is $1,250
08-May Sales Returns and allowances $300
To Accounts Receivable $300
15-May Cash $18,571
Sales Discounts $379
($18950*2%)
To Accounts receivable $18,950
($21000-$1750-$300)
After then, the general ledger is utilized to produce the company's financial statements. The idea behind a journal entry is to use double-entry accounting, which requires that every company transaction be recorded at least twice.
For instance, when you make a cash sale, the revenue account and the cash account are both increased. Alternatively, if you purchase items on credit, this raises both the accounts payable and inventory accounts.
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building that has a market value of $366,000; the partnership assumes responsibility for a $133,000 note secured by a mortgage on the property. Monroe invests $108,000 in cash and equipment that has a market value of $83,000. For the partnership, the amounts recorded for Fontaine's Capital account and for Monroe's Capital account are:\
Answer:
Fontaine - $233,000Monroe - $191,000Explanation:
Fontaine invested a building that had a value of $366,000 but the partnership assumes a $133,000 note secured by a mortgage on the property. This therefore reduces Fontaine's contribution;
= 366,000 - 133,000
= $233,000
Monroe contributed both cash and equipment so that would go to Monroe's capital account as their capital contribution;
= 108,000 + 83,000
= $191,000
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,600 helmets, using 2,664 kilograms of plastic. The plastic cost the company $20,246. According to the standard cost card, each helmet should require 0.65 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,600 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,600 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer and Explanation:
The computation is shown below;
1. The Standard quantity of kilogram for making 3,600 helmets is
= Number of helmets × number of kilograms required
= 3,600 × 0.65
= 2,340
2. The standard material cost is
= Standard quantity × standard price
= 2,340 × $8
= $18,720
3. Material spending variance is
= Plastic cost - standard material cost
= $20,246 - $18,720
= $1,526 unfavorable
4. The material price and quantity varaince is
Price variance
= Plastic cost - (number of plastic × cost)
= $20,246 - (2,664 × $8)
= $1,066 favorable
Quantity variance
= Standard Cost × (Actual quantity - standard quantity)
= $8 × (2,664 - 2,340)
= $2,592 unfavorable
Your Competitive Intelligence team is predicting that the Digby Company will invest in adding capacity to their Deal product this year. Assume Digby's product Deal invests in increasing its capacity by 10% this year. Because of this new information, your company anticipates all other products in the Core segment will increase their capacity by the same amount. How much can the industry produce in the Core segment the next year
Answer:
13,288
Explanation:
The computation of the amount that industry produced in the core segment is shown below:
It can be determined in two ways i.e.
= 6,444 + 6,444
= 13,288
And, the other method is
= 6,444 × 2
= 13,288
In both the methods, the answer would remain the same
Hence, the 13,288 should be produced by the industry for the next year production
Calgary Lumber Company incurs a cost of $315 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $440 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $465 per hbf, which can be sold for $600 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Answer:
Calgary Lumber Company
Differential Analysis dated March 15:
Alternative 1 Alternative 2
Sell rough-cut Lumber Process to finished-cut
Sales $440 $600
Cost of processing 315 465
Profit $125 $135
Choose Alternative 2.
Explanation:
Calgary Lumber Company's differential analysis is a tool that its management can use to decide the alternative to pursue by examining the differences in the outcomes of two or more alternative actions. From the analysis done between the two alternatives open to Calgary, it appears that the second alternative will yield a higher profit of $135 instead of alternative 1's profit of $125. There is a differential profit of $10 per hundred board feet to be made if Calgary Lumber Company pursues alternative 2 instead of alternative 1.
A customer opens a new margin account with the following position:
Long: 1,000 XYZ Cmn
Mkt Value: $20,000
Debit: $10,000
If the market value rises to $22,000, how much SMA is created?
Answer:
$1,000
Explanation:
The above means that for every $1 increase in the market value in a long margin account, the SMA increases by $0.50
If the market value rises to $22,000, the account will show
Long market value - Debit = Equity % SMA
$22,000 - $10,000 = $12,000
Against $22,00 of market value, 50% can be borrowed or $11,000. Since the debit is $10,000, an additional $1,000 can be borrowed . This is the SMA
An e-business can redefine its market by removing traditional marketplace intermediaries or by creating new ways to add value to business transactions.
a. True
b. False
Answer: True
Explanation:
An e-business is a kind of business whereby information is passed across on the internet. Since we live in a digital world, organizations now engage their customers online.
An e-business can redefine its market by removing traditional marketplace intermediaries or by creating new ways to add value to business transactions.
Harris Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in the year of disposition. Data relating to one of Harris's depreciable assets at December 31, 2015 are as follows: Acquisition year 2013 Cost $210,000 Residual value 30,000 Accumulated depreciation 144,000 Estimated useful life 5 years Using the same depreciation method as used in 2013, 2014, and 2015, how much depreciation expense should Harris record in 2016 for this asset? a. $24,000b. $36,000c. $42,000d. $48,000
Answer:
A.24,000
Explanation:
Depreciation expense for the year 2016 can be calculated as follows
DATA
Acquisition year = 2013
Cost = $210,000
Residual value = 30,000
Accumulated depreciation = 144,000
Estimated useful life = 5 years
Remaining useful life = 5 + 4 + 3 + 2 + 1 = 15
Solution
Year Cost Remaining life Depreciation fraction Depreciation exp
1 180,000 5 5/15 $60,000
2 180,000 4 4/15 $48,000
3 180,000 3 3/15 $36,000
4 180,000 2 2/15 $24,000
5 180,0000 1 1/15 $12,000
Harris Co. should record $24,000 in 2016 for this asset
A seller did not submit testing information required in the contract to the buyer, and the project manager did not notice it was not received. After four weeks, the company head asked for the testing information and found out it was not received. The project manager then asked the seller to send the information. The seller argued, "You did not receive the testing reports for four weeks, and you did not say anything. You have therefore waived your rights to ever get them". The seller refused to give the reports without a change to the contract and additional payment. The issue went to court of law to resolve. What do you think was the court's decision? Post what you believe the decision was in this forum post. After posting, review and comment on at least one of your colleagues post. Be sure that you answer any questions that someone else might have made on your post. NOTE: You will not be able to see any other responses until you post your own.
Answer:
Since the testing information is a requirement of the contract, the buyer has the right to request for it accordingly and the seller should not refuse unless fraud is implied. The contract does not specify when a waiver of the right to the testing information should become effective.
The court of law should decide in favor of the buyer's right to receive the testing information from the seller.
Explanation:
Contract terms are agreements and promises that must be followed because they are made for consideration to be given and received. If a contract for the sale of goods includes the submission of some information, this later requirement forms part of the contract and exchange of promises for consideration, and they must be respected and fulfilled, unless there is additional agreement specifying some deadline within which the right to such testing information is waived.
Millie withdraws $1,000 from her checking account so she can have $1,000 in cash. If no other changes occur, M1 will
Answer:
M1 will not change
Explanation:
M1 is the money supply that is composed of physical currency , coin, demand deposits, travellers' checks, checking accounts, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid of money supply.
Because checking account and cash are both components of M1, there would be no change in M1
Widgeon Co. manufactures three products: Bales, Tales, and Wales. The selling prices are $55, $78, and $32, respectively. The variable costs for each product are $20, $50, and $15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 5 hours to process; Tales 7 hours; and Wales 1 hour. Assuming that Widgeon Co. can sell all of the products it can make, what is the maximum contribution margin it can earn per month?
a. $56,000.
b. $34,000.
c. $49,000.
d. $70,000.
Answer:
b. $34,000.
Explanation:
The computation of contribution margin is shown below:-
Particulars Bales Tales Wales
Seeling price $55 $78 $32
Variable cost $20 $50 $15
Contribution
margin $35 $28 $17
Required hour to
process 5 7 1
Contribution margin
per hour 7 4 17
Maximum contribution margin is
= Contribution margin per hour × number of machine hours
= 17 × 2,000
= $34,000
Historically the stock market goes up when there is bad news on unemployment. The latest statistics show the unemployment rate is skyrocketing so this could be a good time to buy stocks.
The arguments target is:
A. Bad news on unemployment
B. The stock market in the past when there is bad news on unemployment
C. The stock market now
Answer: C. The stock market now
Explanation:
The Argument target refers to the subject of the discussion in question. The speaker in question is attempting to explain why it would be a good time to buy stocks in the present which concerns the stock market today making it the subject.
The speaker does this by calling into evidence, the correlations between variables in the past and showing that with one variable ( high unemployment) currently in effect, the other variable (increasing stock prices) which it correlates with therefore has a chance of happening in the present.
Consider a hypothetical closed economy in which households spend $0.65 of each additional dollar they earn and save the remaining $0.35. The marginal propensity to consume (MPC) for this economy is , and the spending multiplier for this economy is .
Answer:
Marginal propensity to consume or MPC = 0.65
Multiplier or k = 2.85714 rounded off to 2.86
Explanation:
The marginal propensity to consume (MPC) is the proportion of increased disposable income that consumers spend. It is a metric to quantify the induced consumption and how an increase in consumer spending occurs as a result of increase in income.
MPC is calculated as follows,
MPC = Change in consumer spending / change in income
MPC = 0.65 / 1
MPC = 0.65
To calculate the multiplier, we simply use the following formula,
Multiplier or k = 1 / (1 - MPC)
k = 1 / (1 - 0.65)
k = 2.85714 rounded off to 2.86
The marginal propensity to consume is a measure in economics that quantifies induced consumption, or the idea that private expenditure grows in tandem with disposable income.
The spending power is the amount of expendable cash spent on consumption by individuals.
The answers to the questions in the context are:
Marginal propensity to consume or MPC = 0.65
Multiplier or k = 2.85714 rounded off to 2.86
The proportion of extra discretionary income spent by the customer is defined as the level of consumption (MPC).
It's a statistic for measuring induced consumption, or how an increase in consumer spending occurs as a result of an increase in income.
MPC is calculated as follows,
MPC = [tex]\frac{\text{Change in consumer spending}}{\text{change in income}}[/tex]
MPC = 0.65 / 1
MPC = 0.65
To calculate the multiplier:
Multiplier or k = [tex]\frac{1}{1-MPC}[/tex]
k = [tex]\frac{1}{1-0.65}[/tex]
k = 2.85714 rounded off to 2.86
Therefore,
Marginal propensity to consume or MPC = 0.65
Multiplier or k = 2.85714 rounded off to 2.86
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Problems which deal with the direct distribution of products from supply locations to demand locations are called:____________.
a. Transportation problems
b. Assiignment problems
c. Network problems
d. Transshipment problems
Answer:
a. Transportation problems
Explanation:
In Business management, problems which deal with the direct distribution of products from supply locations to demand locations are called transportation problems.
Transportation is a supply chain technique which primarily includes all of the process involved in the distribution of finished goods and services from the production line to the consumers or end users, so as to meet their needs or wants.
Net sales for the year were $1,050,000 and cost of goods sold was $735,000 for the company’s existing products. A new product is presently under development and will have an expected selling price of not more than $68 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year.
Answer:
The answer is:
Gross profit is $315,000
Gross profit ratio is 30 percent
Explanation:
Gross profit equals net sales minus cost of sales
Net sales - $1,050,000
Cost of sales - ($735,000)
Gross profit -. $315,000
Gross profit ratio is:
(Gross profit / net sales) x 100 percent
($315,000 / $1,050,000) x 100 percent
0.3 x 100 percent
30 percent.
So we have:
Gross profit is $315,000
Gross profit ratio is 30 percent
While making purchase decisions, which of the following products is most likely to elicit the greatest reference group influence?
A) A car.
B) A medicine.
C) An award-winning novel.
D) A toothbrush.
Answer: a car
Explanation:
While making purchase decisions, the product that is most likely to elicit the greatest reference group influence will be a car.
This because when an individual has a car, other people see the person and use that as a reference group. It should also be noted that a good thatbis considered public good has a strong influence group.
While making purchase decisions, the product that is most likely to elicit the greatest reference group influence is A) A car.
What is a reference group?A reference group is a group that can influence an individual's buying preferences.
The influence wielded by a reference group depends on the level of conformity within the group.
Thus, while making purchase decisions, the product that is most likely to elicit the greatest reference group influence is A) A car.
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Sarah takes out a loan today for $26,000 at an interest rate of 2 percent a year. She plans to repay the loan after 5 years. How much will he have to pay?
Sarah will have to pay:__________
Answer:
$28,706.10
Explanation:
The computation of the amount of pay is shown below:
Here we have to find the future value by using the following formula
Future value = Present value × (1 + interest rate)^number of years
= $26,000 × (1 + 0.02)^5
= $28,706.10
We simply applied the above formula so that the amount of pay could be come and the same is to be considered
O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,810,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,000,000. The following information is available: Indiana proposal Kentucky proposal Required investment $1,810,000 $2,000,000 Estimated life 6 years 6 years Estimated residual value $80,000 $40,000 Estimated annual cash inflows over the next 10 years $700,000 $800,000 Required rate of return 13% 13% The accounting rate of return for the Indiana proposal is closest to (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
Answer:
O'Mally Department Stores
The accounting rate of return for the Indiana proposal is closest to 24.28%
Explanation:
a) Data and Calculations:
Indiana proposal Kentucky proposal
Required investment $1,810,000 $2,000,000
Estimated life 6 years 6 years
Estimated residual value $80,000 $40,000
Estimated depreciable cost $1,730,000 $1,960,000
Average depreciable cost $288,333 $326,667
Estimated annual cash inflows
over the next 10 years $700,000 $800,000
Average cash inflows $70,000 $80,000
Required rate of return 13% 13%
Accounting rate of return = Average cash inflows/Average depreciable cost x 100 = $70,000/$288,333 x 100 = 24.28%
The Indiana proposal of O'Mally Department Stores' accounting rate of return is the ratio of estimated accounting profit to the average investment cost. The estimated accounting profit is equivalent to the average cash inflow and the average investment cost is equivalent to the average depreciable cost.
"In the long-run, monopolistically competitive firms: have excess capacity. produce at the minimum of average total cost. charge prices equal to marginal cost. both B and C are true."
Answer:
The correct answer is the option D: Both B and C are true.
Explanation:
To begin with, a monopolistically competitive firms is the one that produces in a market in where the other companies sell a pretty similar but different product and there are a lot of buyers so the most important way to difference themself is by the publicity or the identification of the brand in the mind of the consumers. Moreover, in this type of market in the long-run equilibrium the price if equal to the marginal cost and also to the minimun of the average total cost so therefore that it is said that there are zero economic profit
Suppose the real interest rate is 2.8%, and the inflation rate is 7%. (1) How much do you need to invest now in order to get $100 in a year? Please show two approaches to calculate the answers. (Round your final answer to two decimal places) (2) Suppose the U.S. Treasury issues 5% coupon, 3-year TIPS (Treasury Inflation-Protected Securities). What are the real cash flows on the 3-year TIPS each year? What are the nominal cash flows on the 3-years TIPS each year? (Round your final answers to two decimal places)
Answer:
1)
approach 1, using the approximate real and nominal interest rates:
nominal interest rate = real interest rate + inflation rate = 2.8% + 7% = 9.8%
present value = $100 / (1 + 9.8%) = $91.07
approach 2, using the exact real and nominal interest rates:
(1 + i) = (1 + r) × (1 + π)
(1 + i) = (1 + 2.8%) x (1 + 7%) = 1.09996
i = 1.09996 - 1 = 0.09996 = 9.996%
present value = $100 / (1 + 9.996%) = $90.91
2)
assuming a $1,000 TIPS, nominal cash flow year 1 = $50
new face value = $1,070
nominal cash flow year 2 = $53.50
new face value = $1,144.90
nominal cash flows year 3 = $57.25 + ($1,144.90 x 1.07) = $1,282.29
assuming a $1,000 TIPS, real cash flow year 1 = $50 / 1.07 = $46.73
new face value = $1,070
real cash flow year 2 = $53.50 / 1.07² = $46.73
new face value = $1,144.90
real cash flows year 3 = [$57.25 + ($1,144.90 x 1.07)] / 1.07³ = $1,282.29 / 1.07³ = $1,046.73
