Answer:
the process by which green plants turn carbon dioxide and water into food using energy from sunlight
FILL IN THE BLANK Please add the appropriate word or words to complete the sentences. 1. Price ceilings are governmental price that are set the market equilibrium price. 2. This kind of policy typically creates a(n) because the quantity demanded the quantity supplied. 3. Price floors are governmental price that are imposed the market equilibrium price. 4. This kind of policy usually generates a(n) in the market because the quantity exceeds the quantity . 5. Shortages and surpluses are reflected in inventories. Inventory is the raw material to goods or the stocks of finished goods that are ready to be sold. g
Answer:
1. Price ceilings are governmental price that are set below the market equilibrium price.
2. This kind of policy typically creates a shortage because the quantity demanded exceeds the quantity supplied.
3. Price floors are governmental price that are imposed above the market equilibrium price.
4. This kind of policy usually generates a surplus in the market because the quantity supplied exceeds the quantity demanded.
5. Shortages and surpluses are reflected in inventories. Inventory is the raw material which is processed to goods or the stocks of finished goods that are ready to be sold.
Explanation:
Price ceilings, as a part of the price control mechanisms, seem to benefit the consumers, while price floors are attempts to support suppliers and producers. While they roll back the excesses of market forces in determining the prices of goods and services, some unintended consequences, including allocative inefficiencies, usually arise from price ceilings and price floors. Therefore, they should be applied sparingly.
Under absorption costing , a company had the following per unit costs when 10,000 units were produced Direct labor Direct materials Variable overhead Total variable cost Fixed overhead ( / Total product cost per unit $ 2.80 3.80 4.80 11.40 6.00 $ 17.40 Required : 1. Compute the company's total product cost per unit under absorption costing if 12,500 units had been produced 2. Fill in the blank with increase or decrease
Answer:
Total unitary cost= $16.2
Explanation:
First, we need to compute the total fixed overhead:
Total fixed overhead= 10,000*6= 60,000
Now, the unitary absorption cost for 12,500 units:
Direct labor= 2.8
Direct materials= 3.8
Variable overhead= 4.8
Total variable cost= $11.4
Fixed overhead= (60,000/12,500)= 4.8
Total unitary cost= $16.2
The unitary cost is lower.
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period.
P0 Q0 P1 Q1 P2 Q2
A 99 100 104 100 104 100
B 59 200 54 200 54 200
C 118 20 128 200 64 400
Calculate the first-period rates of return on the following indexes of the three stocks:
a. A market value–weighted index
b. An equally weighted index.
Answer:
a. Rate of return = 94.51%
b. Rate of return = 1.68%
Explanation:
a. A market value–weighted index
Total market value at time 0 = Market value of Stock A at time 0 + Market value of Stock B at time 0 + Market value of Stock C at time 0 = ($99 * 100) + ($59 * 200) + ($118 * 20) = $24,060
Total market value at time 1 = Market value of Stock A at time 1 + Market value of Stock B at time 1 + Market value of Stock C at time 1 = ($104 * 100) + ($54 * 200) + ($128 * 200) = $46,800
Rate of return = (Total market value at time 1 / Total market value at time 0) – 1 = ($46,800 / $24,060) - 1 = 0.9451, or 94.51%
b. An equally weighted index
Return on a Stock for the first period = (P1 / P0) - 1 …………. (1)
Therefore, we have:
Return on Stock A for the first period = ($104 / $99) - 1 = 0.0505, or 5.05%
Return on Stock B for the first period = ($54 / $59) - 1 = - 0.0847, or - 8.47%
Return on Stock C for the first period = ($128 / $118) - 1 = 0.0847, or 8.47%
Therefore, we have:
Return of return = (Return on Stock A for the first period + Return on Stock B for the first period + Return on Stock C for the first period) / 3 = (5.05% - 8.47% + 8.47%) / 3 = 1.68%
Angle Company started business on January 1. During the year, the company purchased merchandise with an invoice price of $500,000. Angle also paid $20,000 freight on the merchandise. During the year, Angle also returned $80,000 of the merchandise to its suppliers. All purchases were paid for in a timely manner, and a $10,000 cash discount was taken. $418,000 of the merchandise was sold for $627,000. What is the December 31 balance in the Inventory account
Answer:
$12,000
Explanation:
Given the above information, the ending balance in inventory account is computed as seen below
= Merchandise purchased - merchandise withdrawn - Merchandise returned to suppliers + Cash discount taken
= $500,000 - $418,000 - $80,000 + $10,000
= $12,000
Therefore, the balance on the inventory account as at December 31 is $12,000
The records of Quality Cut Steak Company list the following selected accounts for the year ended April 30, 2020 after all adjusting entries have been recorded. Prepare a multiple-step income statement in good form for the company. (Please note only selected accounts are listed, do not try to balance the excerpted trial balance).
Interest revenue 500 Accounts Payable 16,900
Inventory 45,300 Accounts Receivable 38,000
Notes Payable,
Long-term 52,000 Accumulated Depreciation
- Equipment 36,800
Salaries Payable 2,400 Arnold, Capital 42,200
Sales Revenue 292,000 Arnold, Withdrawals 17,000
Salaries Expense
(Selling) 21,400 Cash 7,400
Office Supplies 6,300 Cost of Merchandise
Sold 160,600
Unearned Rent 13,200 Equipment 130,000
Interest Expense 1,700 Interest Payable 1,000
Depreciation Expense
- Equipment (Admin) 1,300 Rent Expense (Admin) 9,600
Utilities Expense
(Admin) 4,300 Utilities Expense
(Selling) 10,600
Delivery Expense
(Selling) 3,500
Answer:
Quality Cut Steak Company
Quality Cut Steak Company
Multiple-step Income Statement for the year ended April 30, 2020
Sales Revenue $292,000
Cost of Merchandise Sold (160,600)
Gross profit $131,400
Operating expenses:
Depreciation Expense -
Equipment (Admin) 1,300
Rent Expense (Admin) 9,600
Utilities Expense (Admin) 4,300
Salaries Expense (Selling) 21,400
Utilities Expense (Selling) 10,600
Delivery Expense (Selling) 3,500
Total operating expenses $50,700
Net operating income $80,700
Interest revenue 500
Interest Expense (1,700)
Net income before taxes $79,500
Explanation:
a) Data and Calculations:
Accounts Payable 16,900
Cash 7,400
Accounts Receivable 38,000
Office Supplies 6,300
Inventory 45,300
Equipment 130,000
Salaries Payable 2,400
Unearned Rent 13,200
Interest Payable 1,000
Accumulated Depreciation - Equipment 36,800
Notes Payable, Long-term 52,000
Arnold, Capital 42,200
Arnold, Withdrawals 17,000
Sales Revenue 292,000
Interest revenue 500
Cost of Merchandise Sold 160,600
Interest Expense 1,700
Depreciation Expense - Equipment (Admin) 1,300
Rent Expense (Admin) 9,600
Utilities Expense (Admin) 4,300
Salaries Expense (Selling) 21,400
Utilities Expense (Selling) 10,600
Delivery Expense (Selling) 3,500
Mcdormand inc reported a 3400 unfavorable price variance for variable overhead and a $34,000 nfavorable price variance for fixed overhead. The flexible budget had variable overhead based on 36,100 direct labor-hours; only 34,100 hours were worked. Total actual overhead was $1,810,400. The number of estimated hours for computing the fixed overhead application rate totaled 37,500 hours.
Required:
a. Prepare a variable overhead analysis.
b. Prepare a fixed overhead analysis.
Answer:
A. Variable overhead price variance 3400 U
Variable overhead efficiency variance 60000 F
Variable overhead cost variance 56600 F
B. Fixed overhead price variance 34000 U
Production volume variance 28000 U
Fixed overhead cost variance 62000 U
Explanation:
a. Preparation of a variable overhead analysis.
Variable overhead price variance = 3400 U
Calculation for Variable overhead efficiency variance
First step is to calculate the Actual input at standard rate
Actual input at standard rate = (34100*30)
Actual input at standard rate= 1023000
Second step is to calculate the Standard rate
Standard rate = 1083000/36100
Standard rate=30
Now let calculate Variable overhead efficiency variance
Variable overhead efficiency variance = (1083000-1023000)
Variable overhead efficiency variance = 60000 F
Calculation for Variable overhead cost variance
Variable overhead cost variance = (60000-3400)
Variable overhead cost variance= 56600 F
Therefore the variable overhead analysis will be:
Variable overhead price variance 3400 U
Variable overhead efficiency variance 60000 F
Variable overhead cost variance 56600 F
b. Preparation of a fixed overhead analysis.
Fixed overhead price variance = 34000 U
Calculation for Production volume variances
First step is to calculate Actual input at standard rate
Actual input at standard rate= 34100*30
Actual input at standard rate= 1023000
Second step is to calculate Fixed overhead actual
Fixed overhead actual= 1810400-(1023000+3400)
Fixed overhead actual= 784000
Third step is to calculate Budgeted fixed overhead
Budgeted fixed overhead = (784000-34000)
Budgeted fixed overhead = 750000
Fourth step is to calculate Fixed overhead applied
Fixed overhead applied= (750000/37500)*36100
Fixed overhead applied= 722000
Now let calculate Production volume variance
Production volume variance = (750000-722000) Production volume variance= 28000 U
Calculation to determine Fixed overhead cost variance
Fixed overhead cost variance = (28000+34000) Fixed overhead cost variance= 62000 U
Therefore fixed overhead analysis will be:
Fixed overhead price variance 34000 U
Production volume variance 28000 U
Fixed overhead cost variance 62000 U
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred.
Sept. 6 Purchased calculators from Ivanhoe Co. at a total cost of $1,740, terms n/30.
9 Paid freight of $60 on calculators purchased from Ivanhoe Co.
10 Returned calculators to Ivanhoe Co. for $64 credit because they did not meet specifications.
12 Sold calculators costing $560 for $780 to Fryer Book Store, terms n/30.
14 Granted credit of $35 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $24.
20 Sold calculators costing $530 for $770 to Heasley Card Shop, terms n/30.
Required:
Journalize the September transactions.
Answer:
well to be honest she bought to much stuff so im not sure why shes even buying all that but she does have to money so i guess its ok?
Explanation:
Wright Machinery Corporation manufactures automobile engines for major automobile producers. The engines sell for $940 per engine. In addition, customers have the option to purchase a service-type warranty for $70 per engine that protects against any defects for a period of 5 years. During 2019, Wright sold 7,000 engines to National Motors. National Motors purchased warranties on all of the engines purchased. During 2019, Wright repaired defective motors at a cost of $93,400. Prepare the necessary journal entries to record:
1. the sale of engines and service warranty on account during 2016 (one entry).
2. the warranty costs paid during 2016
3. the warranty revenue earned in 2016.
Additional Instructions
Model your entries after the Service-Type Warranties example in your textbook.
For grading purposes, use December 31 to record a summary transaction for entries that would have been made during the year.
Answer: See explanation
Explanation:
The journal entry is illustrated below:
Dr Cash $7070000
Cr Sales revenue = $940 × 7000 = $6580000
Cr Unearned warranty revenue = $70 × 7000 = $490000
(To record sale of engines and service warranty on account)
Dr Warranty expense $93,400
Cr Cash $93,400
(To record warranty costs paid)
Dr Unearned warranty revenue = $490000/5 = $98000
Cr Warranty revenue $98000
(To record warranty revenue earned)
Equestrain Roads sold $120,000 of goods and accepted the customer's $120,000 10%, 1-year note in exchange. Assuming 10% approximates the market rate of return, how much interest revenue would be recorded for the year ending December 31 if the sale was made on June 30
Answer:
$6,000
Explanation:
Interest calculation : June 30 - December 31
Time frame between the two dates is 6 months, thus charge half year`s interest.
Interest calculation = $120,000 x 10 % x 1/2 = $6,000
therefore,
The interest revenue that would be recorded for the year ending December 31 if the sale was made on June 30 is $6,000.
Required information Skip to question [The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2019. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,600 units at $225 each) $ 2,160,000 Variable costs (9,600 units at $180 each) 1,728,000 Contribution margin 432,000 Fixed costs 324,000 Pretax income $ 108,000 1. Compute Hudson Co.'s break-even point in units. 2. Compute Hudson Co.'s break-even point in sales dollars.
Answer:
Results are below.
Explanation:
Giving the following information:
Fixed costs= $324,000
Unitary variable cost= $180
Selling price= $225
To calculate the break-even point in units and dollars, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 324,000 / (225 - 180)
Break-even point in units= 7,200
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 324,000 / (45/225)
Break-even point (dollars)= $1,620,000
g What is the after-tax yield on a one-year corporate bond with a 7 percent yield if your marginal federal income tax rate is 40% 2.8% 4.2% 5% 5.3% 6.2%
Answer: 4.2%
Explanation:
Bonds are debt instruments which means that the interest paid on bonds is tax deductible. After the tax is deducted, the after tax yield shows the actual yield being paid on the bond given the tax rate.
The after tax yield on a bond is calculated by the formula:
= Before tax yield * ( 1 - Tax rate)
= 7% * ( 1 - 40%)
= 4.2%
For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the normal balance of the account, and (3) select debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance
Account Type of Account Normal Balance Increase (Dr. or Cr.)
a. Fees Earned
b. Equipment
c. Notes Payable
d. Owner Capital
e. Cash
f. Legal Expense
g. Prepaid Insurance
h. Land
i. Accounts Receivable
j. Owner Withdrawals
k. License Fee Revenue
l. Unearned Revenue
Answer:
a. Fees Earned REVENUE, CREDIT
b. Equipment ASSET, DEBIT
c. Notes Payable LIABILITY, CREDIT
d. Owner Capital EQUITY, CREDIT
e. Cash ASSET, DEBIT
f. Legal Expense EXPENSE, DEBIT
g. Prepaid Insurance ASSET, DEBIT
h. Land ASSET, DEBIT
i. Accounts Receivable ASSET, DEBIT
j. Owner Withdrawals (CONTRA) EQUITY, DEBIT
k. License Fee Revenue REVENUE, CREDIT
l. Unearned Revenue LIABILITY, CREDIT
Blue Co. recorded a right-of-use asset of $210,000 in a 10-year operating lease. Payments of $37,167 are made annually at the end of each year. The interest rate charged by the lessor was 12% and was known by Blue. The balance in the right-of-use asset after two years will be:
Answer:
The balance in the right-of-use asset after two years will be $184,629.96.
Explanation:
This can be calculated as follows:
First year interest = Cost of the right-of-use asset * Interest rate = $210,000 * $12% = $25,200
Principal paid in the first year = Annual payment - First year interest = $37,167 - $25,200 = $11,967
Balance in the right-of-use asset after one year = Cost of the right-of-use asset - Principal paid in the first year = $210,000 - $11,967 = $198,033
Second year interest = Balance in the right-of-use asset after one year * Interest rate = $198,033 * $12% = $23,763.96
Principal paid in the second year = Annual payment - Second year interest = $37,167 - $23,763.96 = $13,403.04
Balance in the right-of-use asset after two years = Balance of the right-of-use asset after one year - Principal paid in the second year = $198,033 - $13,403.04 = $184,629.96
Therefore, the balance in the right-of-use asset after two years will be $184,629.96.
Alpha Enterprises currently operates 8 warehouses and holds a total inventory of 3,600 units. They want to reduce their inventory to 1,800 units. They should reduce the number of warehouses to:
Answer:
4 warehouses
Explanation:
Total warehouse = 8
Total inventory = 3,600 units
Units per warehouse = Total inventory /Total warehouse
Units per warehouse = 3,600 / 8
Units per warehouse = 450
Now, Alpha Enterprises wants to reduce their inventory to 1,800 units, the number of warehouse should then be:
= 1,800 units / 450 units
= 4 warehouses.
Plastic and Co manufactures industrial plastic containers. As petroleum prices fall, the price of plastic materials also falls. As a result,
a: Plastic and Co’s marginal cost curve will shift.
b: The market price for the plastic containers will rise, other things equal.
c: The fixed cost curve for Plastic and Co would shift downward.
d: Average cost curve of plastic containers will shift upward.
When ________, a competitive firm will produce and earn economic profits.
a: marginal revenue is rising
b: marginal costs are decreasing
c: marginal revenue is above average costs
d: marginal revenue = average total cost = marginal costs
Plastic and Co's marginal cost curve will move. The fixed cost curve for Plastic and Co would move below.
Therefore, the correct answer is option a: Plastic and Co’s marginal cost curve will shift.
What is marginal revenue?Marginal revenue exists in the increase in income that happens from the deal of one additional unit of product.
If the market price obtained by a completely competitive firm directs it to construct at a portion where the price stands more significant than the average cost, the company will accumulate profits.
Therefore, the correct answer is option c: marginal revenue is above average costs.
To learn more about Marginal revenue refer to:
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When the economy is in a recession, expansionary fiscal policy can be used to stimulate and encourage economic growth. Which of the following scenarios represent expansionary fiscal policies from both a supply and demand perspective at the same time? When choosing the answer, please look if it meets three description, expansionary, fiscal policies, and involving both the supply side and the demand side. (There could be more than one answer).
A. The government lowers tax rates and undertakes a replacement of old bridges and roads.
B.The government lowers tax rates and issues a partial refund of taxes that have already been paid.
C. The government raises tax rates and reduces unemployment insurance payments.
D. The Federal Reserve increases the money supply and lowers the interest rate while the government simultaneously reduces future taxes.
Answer:
A
Explanation:
Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.
Discretionary fiscal policies can either be expansionary or contractionary
Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes.
If taxes are cut, disposable income increases and demand increases. this is an example of demand side
On the other hand, if a replacement project is undertaken, the demand for labour increases. this is an example of supply side
Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes
Is it true that in a short-run production process, the marginal cost curve eventually slopes upward because firms have to pay workers a higher wage rate as they produce more output? Explain your answer.
Answer:
Yes, This is True.
Explanation:
Marginal cost is the cost of one additional unit. The marginal cost curve will slope upwards because firm will pay more wage to the worker who produce more output. This can be regarded as the increase in output leads to increased wage rate. The marginal cost curve will be upward sloping because there will be addition to the marginal cost due to increase in one unit of output.
If a company has a quick ratio of 1.25 times, current assets of $25,000 and inventory of $5,000, the current liabilities balance is equal to sign and comma, as applicable) (round to the nearest dollar and include the dollar
Answer:
$16,000
Explanation:
Calculation to determine what the current liabilities balance is equal to
Using this formula
Quick Ratio = Current Assets - Inventory / Current Liabilities
Let plug in the formula
1.25 = ($25,000 - $5000) / Current Liabilities
1.25Current Liabilities = ($25,000 - $5000)
Current Liabilities = $20,000 / 1.25
Current Liabilities =$16,000
Therefore the current liabilities balance is equal to $16,000
Married taxpayers Otto and Ruth are both self-employed and file a joint return. Otto earns $435,200 of self-employment income and Ruth has a self-employment loss of $23,100. How much 0.9 percent Medicare tax for high-income taxpayers will Otto and Ruth have to pay with their 2020 income tax return?
Answer: $1,458.90
Explanation:
As they are filing together, the first step would be to find out the taxable income after accounting for Ruth's loss.
Total taxable income = Otto's earnings - Ruth's loss
= 435,200 - 23,100
= $412,100
There is an additional 0.9% Medicare tax on the amount that people file that is above $250,000 when they file jointly and are married..
The additional Medicare will be:
= (412,100 - 250,000) * 0.9%
= $1,458.90
Cash dividends of $50,000 were declared during the year. Cash dividends payable were $10,000 and $20,000 at the beginning and end of the year, respectively. The amount of cash for the payment of dividends during the year is Group of answer choices $40,000 $50,000 $70,000 $60,000
Answer:
$40,000
Explanation:
The computation of the amount of cash for the payment of dividends during the year is shown below:
= Beginning dividends payable + Cash dividends Declared - Ending dividends payable
= $10,000 + $50,000 - $20,000
= $40,000
Hence, the amount of cash for the payment of dividends during the year is $40,000
On January 1, 2012, Fei Corp. issued a 3-year, 5% coupon, $100,000 face value bond. The bond was priced at an effective interest rate of 8%, yielding proceeds of $92,137. This is the first and only bond that Fei has ever issued.
Fei’s Statement of Cash Flows for fiscal year 2012 had the following line items:
2012 2011
Net Income $11,500 $10,350
Depreciation $25,478 $23,675
Amortization of Bond Discount $2,418 $0
What was Fei’s Interest Expense on the bond during fiscal year 2012?
a. $2,418
b. $7,371
c. $7,418
d. $8,000
e. $5,000
Answer:
c. $7,418
Explanation:
Calculation to determine What was Fei’s Interest Expense on the bond during fiscal year 2012
Using this formula
Interest Expense =Interest payable+Amortization of bonds discount interest expense
Let plug in the morning
Interest Expense=(5%*100,000)+$2,418
Interest Expense=$5,000+$2,418
Interest Expense=$7,418
Therefore Fei’s Interest Expense on the bond during fiscal year 2012 is $7,418
A restaurant is considering buying a new coffee making machine, which will be replaced over and over with a new one when an old one dies. Each coffee making machine costs $143,000, and is expected to die after exactly 6-years. Each machine will costs $10,200 per year to operate. The discount rate that the restaurant assigns to this coffee making machine project is 11 percent per year. The straight-line depreciation method would be used when calculating the machine's loss of value for tax purposes. Each coffee making machine will be fully depreciated all the way to zero at the end of its life. Also, each coffee making machine will have a before-tax salvage value of $10,500 at the end of its life. The restaurant's tax rate is 25 percent. As always, assume that all cash flows occur at year end. If the restaurant buys a coffee making machine over and over in perpetuity, as soon as one dies, what would be the average, or the equivalent, annual cost (EAC) of the machine?
Answer:
Coffee Making Restaurant
If the restaurant buys a coffee making machine in perpetuity, the equivalent annual cost (EAC) of the machine will be:
Equivalent annual cost of the machine = $44,994
Explanation:
a) Data and Calculations:
Initial investment cost of machine = $143,000
Expected useful life = 6 years
Discount rate = 11%
Annual operating cost = $10,200
Before-tax salvage value = $10,500
Applicable tax rate = 25%
After-tax salvage value = $7,875
Annuity factor for 6 years at 11% = 4.231
Present value of costs:
Initial investment = $143,000 ($143,000 * 1)
Annual operating cost = 43,156 ($10,200 * 4.231)
Salvage value = (4,213) ($7,875 * 0.535)
Total costs = $190,369
Equivalent annual cost of the machine = $44,994 ($190,369/4.231)
While digital marketing has generated exciting opportunities for companies to interact with their customers, digital media are also more consumer-driven than traditional media. Internet users are creating and reading consumer-generated content as never before and having a profound effect on marketing in the process. Two factors have sparked the rise of consumer-generated information. The first is the increased tendency of consumers to publish their own thoughts, opinions, and reviews. The second is product discussions through blogs or digital media and consumers' tendencies to trust other consumers over corporations. Consumers often rely on the recommendations of family, friends, and fellow consumers when making purchasing decisions. Marketers who know where online users are likely to express their thoughts and opinions can use these forums to interact with consumers, address problems, and promote their companies. Types of digital media in which Internet users are likely to participate include blogs, wikis, video sharing sites, podcasts, social networking sites, virtual reality sites, and mobile applications.
Match the correct website to the correct type of digital media.
a. Blogs
b. Video Sharing
c. Virtual Worlds
d. Social Networking
e. Wikis
f. Photo Sharing
g. Podcasting
Answer:
a. Blogs ⇒ Web-based Journals; Tu-mblr
b. Video Sharing ⇒ Video Sites; You-Tube.com
c. Virtual Worlds ⇒ Online Avatars; Second Life
d. Social Networking ⇒ Online Meeting Places; T-witter
e. Wikis ⇒ Edited Web Articles; Wik-ipedia.com
f. Photo Sharing ⇒ Photo Sites; Fl-ickr.com
g. Podcasting ⇒ Subscription Media Files; CBC Radio
If a firm is privately owned, and its stock is not traded in public markets, then we cannot measure its beta for use in the CAPM model, we cannot observe its stock price for use in the dividend growth model, and we don't know what the risk premium is for use in the bond-yield-plus-risk-premium method. All this makes it especially difficult to estimate the cost of equity for a private company. True False
Answer: True
Explanation:
Beta enables us to be able to calculate the risk of a stock in relation to how the market is moving. This is known as the systematic risk. Beta, needs to be calculated on based on the trading data of the stock.
If the stock is not publicly traded, it would not have the trading data required to find the beta. As we cannot get the beta, we would be unable it to calculate the return on stock and therefore the dividend growth model.
Suppose you purchase the winning lottery ticket after watching your favorite movie. From this experience, you believe that watching your favorite movie will help you win the lottery again. Which of the following concepts is most relevant?
a. exclusion of a relevant variable
b. scarcity the fallacy of composition
c. opportunity cost
d. post hoc ergo propter hoc fallacy
e. violation of ceteris paribus
Answer:
D
Explanation:
post hoc ergo propter hoc fallacy is a Latin word which means - after this, therefore because of this.
It is an example of a fallacy where if an event B occurs after an event A. So, people associate the occurrence of event B with A.
In this question, a person believes that because he watched his favourite movie (event A), he won the lottery (event B). He has come to associate watching his favourite movie as a prerequisite with winning the lottery. this is not necessarily true
If the shadow price for a resource is 0 (the allowable increase is 1000) and 150 units of the resource are added what happens to the optimal solution
Answer:
The answer is "No change"
Explanation:
The optimal solution is a feasible alternative where the optimal solution reaches its highest (or lowest) values, including most profit and the price is lower. There is no other viable solution with an objective function that is universally ideal. Whenever the resource regression coefficient is 0, the best solution would not be changed.
Determine whether each of the following goods is a private good, a public good, a common resource, or a club good. Private Good Public Good Common Resource Club Good A stationary bike in a fitness room that is open to the public A large, beautiful clock in a town square A new drum set for you to play in your friend's band
Answer:
Common Resource
public good
private good
Explanation:
A club good is a type of public good. It is excludable but non-rivalrous. For example paid streaming services are an example of a club good. Those who do not subscribe are excluded from using the service. But all subscribers have equal assess to the service
A public good is a good that is non excludable and non rivalrous. Everyone has assess to the statue and because one person is enjoying the view of the clock does not means another person cannot enjoy the view of the clock
A private good is a good that is excludable and rivalrous. They are usually exchanged in the market by private sector businesses. It is only you who purchased the drum set and those you allow that can use the drum set.
A common resource is a good that is non excludable but rivalrous. The bike in the fitness room is an example. Because the gym is open to anyone, it is non excludable. Only one person can use it at a time, thus it is rivalrous
Razor Corporation's cost of preferred stock is 8%. The company's stock sells for $100 a share with selling costs are $5. What is the annual dividend to the preferred stock
Answer:
Razor Corporation
The annual dividend to the preferred stockholders is:
= $8 per share
Explanation:
a) Data and Calculations:
Cost of preferred stock = 8%
Selling price per preferred stock = $100
Annual dividend to the preferred stock = $100 * 8% = $8 per share
b) The $8 per share annual dividend of Razor's preferred stock dividend is computed by applying the fixed percentage to the preferred stock's total par value. In the above case, it is assumed that the par value or nominal value of the stock is $100. The cost of selling or issuing the stock is not factored when calculating the dividend.
Perpetual Life Corp. has issued consol bonds with coupon payments of $50. (Consols pay interest forever and never mature. They are perpetuities.)a. If the required rate of return on these bonds at the time they were issued was 5.0%, at what price were they sold to the public
Answer: $1,000
Explanation:
The price of a perpetual bond is calculated like a perpetuity and this is calculated by dividing the coupon payment of the bond by the prevailing required rate of return.
Price of this bond is:
= Coupon payment / Required return
= 50 / 5%
= $1,000
Wallace Publishers Inc. collects 50% of its sales on account in the month of the sale and 50% in the month following the sale. If sales on account are budgeted to be $380,000 for April and $334,000 for May, what are the budgeted cash receipts from sales on account for May
Answer:
Total cash collection may= $362,000
Explanation:
Giving the following information:
Wallace Publishers Inc. collects 50% of its sales on account in the month of the sale and 50% in the month following the sale.
Sales on account:
April= $380,000
May= $334,000
Cash collection May:
Sales on account from May= 344,000*0.5= 172,000
Sales on account from April= 380,000*0.5= 190,000
Total cash collection may= $362,000
