Answer:
Her elasticity of demand is the absolute value of -0.8, or 0.8. Julie's elasticity of demand is inelastic, since it is less than 1.
Explanation:
% Change in Quantity = (8 - 10)/(10) = -0.20 = -20%
% Change in Price = (3.75 - 3.00)/(3.00) = 0.25 = 25%
Elasticity = |(-20%)/(25%)| = |-0.8| = 0.8
3. There a number of market entry strategies that businesses use in entering into markets outside their countries. a) Distinguish between the use of Franchising and Joint Venture as modes of entry into other countries by global businesses. b) What are the respective advantages and disadvantages of both strategies?
Answer:
a) Distinguish between the use of Franchising and Joint Venture as modes of entry into other countries by global businesses.
Franchising consists in the licensing of aspects of production and intellectual property to a another party: the franchise.
A Joint Venture is a business union between two or more parties, in which they split profit as well as costs and responsabilities.
b) What are the respective advantages and disadvantages of both strategies?
Franchising can be a quicker way to expand into foreign markets. The flexibility of the method, and the lower capital requirements are the reason why. This can be seen in the success that American fast-food brands have had using this method to expand in global markets.
A Joint-Venture can be more difficult to use for market expansion, however, it can be more profitable, because the profit will not be split among as many parties as in franchising, and more importantly, the firm maintains a higher control of the operation.
The Government Accounting Office (GAO) announces deep cuts to social security, Medicare, and welfare programs. Which determinant of aggregate demand causes the change
Answer:
Consumer spending
Explanation:
Consumer spending is the amount that individuals and families spend on final goods and services for personal use and enjoyment in the economy. Contemporary measures of consumer spending include all private purchases of durable goods, durable goods and services. Consumer spending can be thought of as a combination of personal savings, investment cost, and output in the economy.so correct answer is Consumer spendingA project has estimated annual net cash flows of $56,600. It is estimated to cost $339,600.
Required:
Determine the cash payback period.
Answer:
It will take exactly 6 full years to cover for the initial investment.
Explanation:
Giving the following information:
Cash flow= $56,600
Initial investment= 339,600
The payback period is the time required for the cash flow to cover the initial investment:
Year 1= 56,600 - 339,600= -283,000
Year 2= 56,600 - 283,000= -226,400
Year 3= 56,600 - 226,400= -169,800
Year 4= 56,600 - 169,800= -113,200
Year 5= 56,600 - 113,200= -56,600
Year 6= 56,600 - 56,600= 0
It will take exactly 6 full years to cover for the initial investment.
Click to review the online content. Then answer the question(s) below, using complete sentences. Scroll down to view additional questions. Career Connection: Shin-fong How does Shin-fong keep track of his finances?
Answer:
By means of a budget he prepared.
Explanation:
According to the information available, Shing-fong has a carefully thought out strategy. Here's some of what he does;
he keeps tracks of his finances by means of a budget plan.he views all his transactions also checking his debit or credit cards to keep track of how much he spendsShing-Fong avoids eating out as much as he used to and preparing cheaper food at home.he also avoids unnecessarily spending with friends whenever he is invited.The Bathtub Division of Kirk Plumbing Corporation has recently approached the Faucet Division with a proposal. The Bathtub Division would like to make a special "ivory" tub with gold-plated fixtures for the company's 50-year anniversary. It would make only 5,000 of these units. It would like the Faucet Division to make the fixtures and provide them to the Bathtub Division at a transfer price of $160. If sold externally, the estimated variable cost per unit would be $140. However, by selling internally, the Faucet Division would save $6 per unit on variable selling expenses. The Faucet Division is currently operating at full capacity. Its standard unit sells for $43 per unit and has variable costs of $25.
Required:
Compute the minimum transfer price that the Faucet Division should be willing to accept, and discuss whether it should accept this offer.
Answer:
Minimum transfer price = $152
Explanation:
The minimum transfer price can be calculated by Adding variable cost and the contribution margin lost
Minimum transfer price = Variable cost + Contribution margin lost
Minimum transfer price = $134 + $18
Minimum transfer price = $152
Working
Variable cost = $140 -$6(saving) = $134
Contribution margin lost = Selling price - variable cost per unit
Contribution margin lost = $43 - $25
Contribution margin lost = $18
Decision: The offer should be accepted because the minimum transfer price of $152 is less than $160
Costs that are capitalized because they are expected to have future value are called product costs; costs that are expensed are called period costs. This classification is important because it affects the amount of costs expensed in the income statement and the amount of costs assigned to inventory on the balance sheet. Product costs are commonly made up of direct materials, direct labor, and overhead. Period costs include selling and administrative expenses.
A service company has which of the following costs
a. Direct Material
b. Overhead Costs
c. Product Costs
d. Expensed in the period incurred
Answer:
b. Overhead Costs
d. Expensed in the period incurred
Explanation:
-Direct material refers to the cost of the material used to manufacture a product.
-Overhead costs are the costs related to the operation of the business and they can't be assigned to a good or service.
-Product Costs are the costs to manufacture a product.
-Expensed in the period incurred are the period costs which are costs not related to the production of a good.
According to these definitions, a service company has the following costs: overhead costs and expensed in the period incurred because these are costs that are not related to the creation of a product.
On the other hand, the other options direct material and product costs are not right because these costs are directly related to products.
Sheffield Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $19,902. All sales are subject to a 7% sales tax. Compute sales taxes payable. Sales taxes payable
Answer:
Sales tax = Total sales / 100 + Sales Tax rate * Sales Tax rate
Sales tax = {$19,902 / (100 + 7)} * 7
Sales tax = ($19,902 / 107) * 7
Sales tax = $1,302
Date Account Title and Explanation Debit Credit
Cash $19,902
Sales Tax payable $1,302
Sales revenue $18,600
($19,902 / 107 * 100)
(To record sales and sales taxes payable)
Answer:
1,302
Explanation:
Sales without tax x (100%+sales tax rate) = sales with tax
sales without tax x 1.07 (100%+7%) = 19902
sales without tax = 19902/1.07
sales without tax = 18600
sales with tax - sales without tax = sales tax payable
19902 - 18600 = 1302
A stock has an expected return of 13.5 percent, its beta is 1.40, and the expected return on the market is 11.5 percent. What must the risk-free rate be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
The risk free rate is 6.50%
Explanation:
The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.
The equation is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free rate rM is the return on market
As we know the figures for r, Beta and rM, we will input these figures in the equation to calculate risk free rate.
Let risk free rate be x.
0.135 = x + 1.4 * (0.115 - x)
0.135 = x + 0.161 - 1.4x
0.135 - 0.161 = x - 1.4x
-0.026 = -0.4x
-0.026 / -0.4 = x
x = 0.065 or 6.50%
r = 0.1475 or 14.75%
The development manager is required to choose between two projects. Project A has an IRR of 25% and project B has an IRR of 30%. Which of the following statements is correct? A. If she can invest only in one project, the manager will choose project B B. None of the statements above is correct C. If she can invest only in one project, the manager will choose project A D. If she can invest in both projects, the manager will choose both projects A and B
Answer:
A
D
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
Because the IRR of both projects are positive, both projects are acceptable.
If the manager can only choose one project, she should choose the one with the higher IRR because it would be more profitable.
On July 1, Shady Creek Resort borrowed $400,000 cash by signing a 10-year, 9% installment note requiring equal payments each June 30 of $62,328. What is the journal entry to record the first annual payment
Answer:
Journal Entry
Debit Credit
Interest Expense $36,000
Notes Payable $26,328
Cash $62,328
Workings
Interest portion for one year = 400,000 * 9% = $36,000
Total installment paid = $62,328
So, principal portion repaid = $62,328 - $36,000
= $26,328
Niles believes that the reports are true and does not intend to deceive Prime Business, but does not check the reports before certifying them. Can Niles be held liable to Prime Business
The complete question is:
Niles, an accountant, certifies several audit reports on Optimal Operational Processes, Inc., Nile's client, knowing that the company intends to use the reports to borrow money from Prime Business Lending Company to buy new equipment. Niles believes that the reports are true and does not intend to deceive Prime Business, but does not check the reports before certifying them. Can Niles be held liable to Prime Business?
Answer:
Yes can be held liable
Explanation:
An accountant that certifies audits of a company is expected.to do his due diligence. In this scenario Niles believed that the reports are true without checking them.
This is an act of negligence on Nile's part and he can be held liable for damages resulting from the oversight.
The certified audit report is not only being used by Prime business but other third parties like investors and other stakeholders. Any of these can hold Mike's liable for any misleading information in the audit reports
"It can be difficult to understand the nature of competition between firms in a market which is driven by change factors like technology, and capital driven mergers. Because of this the Federal Trade Commission has begun to look less at market share and more at the data on actual ______________________________.
Answer: competition between the businesses.
Explanation:
The Federal Trade Commission was put in place to protect the consumers in the marketplace. This was done by stopping deceptive, fraudulent and unfair practices that exist in the marketplace.
Based on the above analysis in the question, the Federal Trade Commission has begun to look less at market share and more at the data on actual competition between businesses.
The minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively. Determine the net present value. $
Answer: $18,848
Explanation:
The Net Present Value of a project is the difference between the present values of the cash outflows and inflows.
Present Values of the Cash flows;
Year 1
= 150,000 * 0.893
= $133,950
Year 2
= 130,000 * 0.797
= $103,610
Year 3
=104,000 * 0.712
= $74,048
Year 4
= 90,000 * 0.636
= $57,240
Net Present Value = Cash inflows - Outflow
= 133,950 +103,610 + 74,048 + 57,240 - 350,000
= $18,848
Cullumber Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 14,700 of the assembly part at $6 per unit. If the offer is accepted, Cullumber will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Cullumber will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer and Explanation:
The preparation of the analysis that depicts the total cost saving is presented below:
Particulars Make Buy Net Income or decrease
Variable
Manufacturing Cost $73,500 - $73,500
(14,700 × $5)
Fixed
Manufacturing cost $29,400 $29,400 -
(14,700 × $2)
Purchase price
(14,700 × $6) - $88,200 ($88,200)
Total annual cost $102,900 $117,600 ($14,700)
Based on the total annual cost the company should make the product as it saves the cost by $14,700
Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to:
Answer:
c. $ 14,238
Explanation:
Computation of costs in the flexible budget
Planned activity 716 units
Budgeted cost per unit $ 18 per frame
Total planned variable cost - 716 units * $ 18 $ 12,888
Fixed monthly cost $ 1,350
Total supplies cost in flexible budget for June $ 14,238
The other information regarding the actual costs and actual production are not required for determining the budgted cost for supplies.
The independent variable in the hypothesis "the longer a U.S. line worker has been employed at a U.S.-based assembly plant, the more difficult it is for that worker to find new employment when the assembly plant moves to Mexico" is _____ .
Answer:
Independent Variable
"The longer a U.S. line worker has been employed at a U.S.-based assembly plant..."
Explanation:
The independent variable is the element or variable that is independent of another variable. In this case, "how difficult it is for the line worker to find new employment when the assembly plant moves to Mexico" a dependent variable, which depends on the length of time that the "U.S. line worker has been employed at a U.S.-based assembly plant," and not vice versa.
You want to save $98,000 to buy an boat by making an equal, end of year payment into a brokerage account for the next 9 years. If you expect to earn an annual interest rate of 7.75% on your account, how much do you need to deposit each year into your account?
Answer:
Annual deposit= $7,930.11
Explanation:
Giving the following information:
FV= $98,000
n= 9 years
i= 0.0775
To calculate the annual deposit, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (98,000*0.0775) / [(1.0775^9) - 1]
A= $7,930.11
Answer: $7,930
Explanation:
The payments are to be equal so this is an annuity. The expected value is to be $98,000 in 9 years so this is a future value of an Annuity.
The formula is;
FV = [tex]P * \frac{[1 + i]^n-1}{i}[/tex]
98,000 = [tex]P * \frac{[1 + 0.075]^9-1}{0.075}[/tex]
98,000 = P * 12.3581
P = 98,000/12.3581
P = $7,930
Assume that the government is currently balancing the national budget so that outlays equal tax revenue. Then the economy slips into recession, and the government decides to increase government spending by $50 billion. The government must pay for this by borrowing; it must sell $50 billion worth of Treasury bonds. As a result: Group of answer choices
Answer: b. be in deficit by at least $50 billion.
Explanation:
The Government budget had been balanced but it will now have to spend $50 billion more than it is making. This will mean that Government expenditure will rise by $50 billion over the tax revenue which will lead to a deficit of the same amount.
These are bonds however meaning that the Government would have to pay interest on the $50 billion. This will push the deficit owed to over $50 billion meaning that the Government would be in deficit of at least $50 billion.
A single-channel queuing system has an average service time of eight minutes and an average time between arrivals of 10 minutes. The arrival rate is: Group of answer choices 10 per hour. 12.5 per hour. 6 per hour. 7.5 per hour. 8 per hour.
The correct answer is B. 6 per hour
Explanation:
The term "arrival rate" refers to the number of customers that arrive at a business during a specific time such as an hour or a day. This is determined by how often customers arrive or the time between arrivals. This concept complements the service rate, which refers to the customers that receive a service during a period of time.
In the case presented, it is known the time between arrivals is 10 minutes, this means it is expected every 10 minutes a new customer arrives. Based on this, each hour the business can expect a total of 6 customers as 60 minutes divided by 10 (time between arrivals) = 6 customers. Thus, the rate of arrival is 6 per hour.
The ________ is the pipeline through which products, their ownership, communication, financing and payment, and risk flow to the consumer.
Answer: Marketing channel
Explanation: The marketing channel is simply the pipeline through which products, their ownership, communication, financing and payment, and risk flow to the consumer. It is defined as a set of interdependent organizations that help ease the transfer of ownership as products move from producer to business user or consumer thereby creating a continuous and seamless supply chain. They help facilitate the physical flow of goods through the supply chain,and in the marketing mix represents "place" or "distribution".
Faisal has in his savings account and can save an additional per year. If interest rates are 12%, how long will it take his savings to grow to ?
Answer:
5 years and 4 months = 5.33 years
Explanation:
the question is incomplete and it is missing several numbers. I found the following question which I think is the complete:
"Faisal has $12,000 in his savings account and can save an additional $3600 per year. If interest rates are 12%, how long will it take his savings to grow to $47,000? "
by the end of year 1, Faisal will have:
$12,000 x (1 + 12%) = $13,440+ $3,600total = $17,040by the end of year 2, Faisal will have:
$17,040 x (1 + 12%) = $19,084.80+ $3,600total = $22,684.80by the end of year 3, Faisal will have:
$22,684.80 x (1 + 12%) = $25,406.98+ $3,600total = $29,066.98by the end of year 4, Faisal will have:
$29,066.98 x (1 + 12%) = $32,487.81+ $3,600total = $36,087.81by the end of year 5, Faisal will have:
$36,087.81 x (1 + 12%) = $40,418.35+ $3,600total = $44,018.35Since Faisal is very close to his goal, we can calculate how much money he will have in 6 months:
in 5 years and 6 months, Faisal will have:
$44,018.35 x (1 + 6%) = $46,659.45+ $1,800total = $48,459.45Faisal's savings are too high in 6 more months, so we can calculate in 3 more months instead:
in 5 years and 3 months, Faisal will have:
$44,018.35 x (1 + 3%) = $45,338.90+ $900total = $46,238.90Faisal is just a little bit short:
in 5 years and 4 months, Faisal will have:
$44,018.35 x (1 + 43%) = $45,779.08+ $1,200total = $46,979.08I guess we are close enough because in one more month he will have a significantly higher amount.
Which of the following is concerned with the effect of exchange rate changes on individual transactions, most of which are short-term affairs that will be executed within a few weeks or months?
a. Purchasing power parity
b. Transaction exposure
c. Economic exposure
d. Translation exposure
e. Currency speculation
Answer: Transaction exposure
Explanation:
Transaction exposure, is a form of foreign exchange risk that is faced by the organizations that take part in international trade. It occurs when the fluctuation in exchange rate change a contracts value before it is settled.
It is concerned with the effect of exchange rate changes on individual transactions, most of which are short-term affairs that will be executed within a few weeks or months.
The government is looking to double the living standards of its population in 18 years, what rate of GDP growth would it need to achieve that? Group of answer choices
Answer:
4%
Explanation:
The rule of 72 is used to calculate the number of years it takes for GDP to double
72 / growth rate = number of years
18 = 72 / growth rate
growth rate = 72 / 18 = 4%
Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. The present value of the future cash flows generated by the project is $163,000. Should they invest in this project?
Answer:
No, as the net present value comes in negative
Explanation:
As we know that
Net present value = Present value of cash inflows - Initial investment
where,
Present value os $163,000
And, the initial investment is $180,000
Now placing these values to the above formula
So, the net present value is
= $163,000 - $180,000
= -$17,000
Therefore the company should not accept the project as net present value is in negative that is -$17,000
_____ is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow.
Answer:
Cash flow analysis, is the right answer.
Explanation:
“Cash flow analysis” is the method that determined the actual cash that goes out of the business and the actual cash that comes in the business. Basically this method is used for financial purposes. This method exhibits the actual cost that the business has incurred and the actual benefit it has earned. Moreover, new investors that invest in the company primarily sees the financial report of the company and then take the decision to invest.
Financial capital markets bridge the gap between savers and investors: that is, they find ways to take the inflow of funds from many separate financial capital suppliers and transform it into the funds of financial capital demanders desire. Such financial markets include:_______
Answer: stocks, bank loans, bonds, and other financial investments.
Explanation:
A capital market is a financial market whereby lequity-backed securities are purchased by individuals or firms and also sold.
Financial capital markets bridge the gap between savers and investors: that is, they find ways to take the inflow of funds from many separate financial capital suppliers and transform it into the funds of financial capital demanders desire.
Such financial markets consists of stocks, bank loans, bonds, and other financial investments.
Effectiveness of a solution is equal to:_______
a. Quality of a Solution 20% (x) Acceptability of the Solution 80%
b. Quality of a Solution 80% (x) Acceptability of the Solution 20%
c. Quality of a Solution 10% (x) Acceptability of the Solution 90%
d. Quality of a Solution 90% (x) Acceptability of the Solution 10%
e. None of the above
Answer:
a. Quality of a Solution 20% (x) Acceptability of the Solution 80%
Explanation:
We say that a solution is effective i.e 100%, when it has a 20% of its quality and 80% of its acceptability.
A solution is effective when it has a 100% effect. The application of a solution to a problem which yields 100% effect is said to be effective and acceptable.
The scale used is the relationship given as:
Effectiveness of a solution = Quality of a Solution 20% (x) Acceptability of the Solution 80%
What was the ratio of per capita income in each of the following countries to that in the United States in the year 2010:
a. Ethiopia
b. Mexico
c. India
d. Japan
Answer:
For Countries (per capita) United States of America (per capita)
Ethiopia:
$380 $48,468
Mexico:
$9,271 $48,468
India:
$1,358 $48,468
Japan:
$44,508 $48,468
Explanation:
Ratio per Capita also known as Gross Domestic Product per Capita (GDP Capita) is the monetary measure of the market value of all the final goods and services produced in a specific time period within the country in view. It is useful for comparing national economies of different countries on the international market.
David Ortiz Motors has a target capital structure of 45% debt and 55% equity. The yield to maturity on the company's outstanding bonds is 12%, and the company's tax rate is 40%. Ortiz's CFO has calculated the company's WACC as 11.35%. What is the company's cost of equity capital
Answer:
the company's cost of equity capital is 14.75 %.
Explanation:
WACC = ke × (E/V) + kd × (D/V)
Where,
ke = cost of equity
= this is unknown
E/V = Weight of Equity
= 55%
kd = cost of debt
= Interest × ( 1 - tax rate)
= 12% × ( 1 - 0.40)
= 7.20 %
D/V = Weight of Debt
= 45%
Therefore,
WACC = ke × (E/V) + kd × (D/V)
11.35% = 55%ke + 7.20 % × 45%
11.35% = 55%ke + 3.24 %
55%ke = 8.11 %
ke = 14.75 %
A company would like to evaluate two incentive schemes that take effect once the worker exceeds standard performance. In the first case the benefits are split 30% to the worker and 70% to the company up to 120% performance. If the worker exceeds 120% performance, all of the earnings go to the worker. In the second case, all earnings beyond standard performance are split 50/50 between the worker and the company.
a. Plot the earnings for each scheme.
b. Derive the equations for worker earnings and normalized unit labor costs for each scheme
c. Find the point at which the two plans break even.
d. Which do you think would the company prefer?
Answer:
B) plan 1 : worker earning y = x - 0.14 , unit labor = [tex]\frac{x-(0.14)}{x}[/tex]
plan 2 : worker earning y = 0.5x + 0.5, unit labor = (0.5x + 0.5) / x
C) At 128%
D ) plan D IS PREFERABLE
Explanation:
In the first case Benefits are split : 30% to worker , 70% to company ( up to 120% ) performance
In the second case benefits 50% go to the worker and 50% go the company
B) The equations for worker earnings and normalized unit labor costs for each scheme
Plan 1 :
y ( percentage earning of worker ) = 1
unit labor cost = Y / 1
y = 0 - 30
unit labor = 0.3 / x
y = x - 0.14 therefore unit labor = [tex]\frac{x-(0.14)}{x}[/tex]
plan 2 :
y ( percentage earning of worker ) = 1, y = 0.5x + 0.5
unit labor cost : Y / 1 = (0.5x + 0.5) / x
C ) The point at which the two plans break even
0.5x + 0.5 = x - 0.14
0.5 + 0.14 = x - 0.5x
0.64 = x(1 - 0.5 )
x = 0.64 / 0.5 = 1.28 = 128%
D) The company would prefer plan 1
