Answer:
1. 8%
2. 1.5
3. 12%
Explanation:
1) Computation for the margin
Using this formula
Margin = Net operating income/Sales
Let plug in the formula
Margin= 600000/7500000
Margin = 8%
2) Computation for the turnover
Using this formula
Turnover = Sales/average operating assets
Let plug in the formula
Turnover = 7500000/5000000
Turnover= 1.5
3) Computation for the return on investment (ROI
ROI = 8*1.5
ROI= 12%
The following note transactions occurred during the year for Towell Company: Nov. 10 Towell issued a 90-day, 9% note payable for $8,000 to Hyatt Company for merchandise. Dec. 1 Towell signed a 120-day, 10% note at the bank for $12,000. Dec. 20 Towell gave Barr, Inc., a 60-day, 10%, $12,000 note for payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar.
Answer: See explanation
Explanation:
The general journal entries necessary to adjust the interest accounts at December 31 will be:
1. December 31:
Debit: Interest Expenses = $8,000 × 9% × 51/ 360 = $102
Credit: Interest payable = $102
(To accrue interest expenses for the note issued on November 10).
2. December 31:
Debit: Interest Expenses = $12,000 × 10% ×30/360 = $120
Credit: Interest payable = $120
(To accrue interest expenses for the note issued on December 1)
3. December 31:
Debit: Interest Expenses = $12,000 × 10% × 11/360 = $36.67
Credit: Interest payable = $36.67
(To accrue interest expenses for the note issued on December 20).
Distributors have grown in their value and influence in the economy for the following reasons: 1) the rise in e-commerce has increased the B2B service demands 2) expanded direct market knowledge and customer knowledge of distributors, including the capacity to individualize customer strategies 3) _____________________________________________________________________________________ Group of answer choices
Answer:
Businesses have preferred their marketing strategy for B2B to be concise and to the point because businesses do not need persuasion like customers.
Explanation:
A company might choose B2B or B2C strategy depending on the their business strategy. It is easier for a business to opt for B2B marketing as the expense may be lower and there do not need persuasion for selling the product. The B2C is a tough marketing strategy as preference of different customers need to be kept in view.
In its first year of operations, Cloudbox has credit sales of $200,000. Its year-end balance in accounts receivable is $10,000, and the company estimates that $1,500 of its accounts receivable is uncollectible.
a. Prepare the year-end adjusting entry to estimate bad debts expense.
b. Prepare the current assets section of Cloudboxâs classified balance sheet assuming Inventory is $22,000, Cash is $14,000, and Prepaid Rent is $3,000. Note: The company reports Accounts receivable, net on the balance sheet.
Answer:
Cloudbox
a) Year-end adjusting entry to estimate bad debts expense:
Debit Bad Debts Expense $1,500
Credit Allowance for Uncollectible accounts $1,500
To record the uncollectible allowance.
b) Current Assets Section of the Balance Sheet:
Cash $14,000
Accounts receivable (net) 8,500
Inventory 22,000
Prepaid Rent 3,000
Total current assets $47,500
Explanation:
a) Data and Calculations:
Credit sales = $200,000
Accounts receivable ending balance = $10,000
Estimated uncollectible accounts = $1,500
Cash $14,000
Accounts receivable (net) $8,500 ($10,000 -$1,500)
Inventory $22,000
Prepaid Rent $3,000
You are the VP of Marketing at Stauffer Foods and you learn that the puddings packaged desserts line from General Foods (GF) is available for acquisition. This division produces successful products like Pudding Pops, Instant Pudding, and Pudding in a Cup. You make some of assumptions about this line. Which assumption would you not make
Answer: purchasing the line would bring immediate cash flow for Stauffer Foods
Explanation:
The options include:
a. purchasing the line would bring established distribution for Stauffer Foods.
b. purchasing the line would add equity value to Stauffer Foods.
c. All would be reasonable assumptions to make.
d. purchasing the line would bring immediate cash flow for Stauffer Foods
e. purchasing the line could create some difficulties in dealing with debt load.
The assumption that shouldn't be made is that purchasing the line would bring immediate cash flow for Stauffer Foods.
When a product is acquired, one should not expect immediate profit or cash flow instantly. Purchasing the line would not bring immediate cash flow for Stauffer Foods because it's a gradual process even though there may eventually be cash flow and profit in the long run.
All the other options that re given are correct, therefore the correct option is D.
A manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $9 per hour and capital is rented at $10 per hour. If the marginal product of labor is 45 units of output per hour and the marginal product of capital is 60 units of output per hour, should the firm increase, decrease, or leave unchanged the amount of capital used in its production process
Answer: Capital should be increased in the production process.
Explanation:
We should note that based on rule of cost minimization, the quantity of capital and labor that's employee by a firm should be one where the MRTS i.e marginal rate of technical substitution between the capital and labor is equal to the wage rental ratio. Therefore,
MRTS = w/r
MPl/MPk = w/r
MPl/w = MPk/r
45/9 < 60/10
5 < 6
Since the ratio isn't equal, it simply means that the firm isn't using optimum mix of inputs. Based on the above, capital should be increased.
Jim is a lawyer who requires that his clients pay him in advance of legal services rendered. Jim routinely credits Legal Service Revenue when his clients pay him in advance. In June Jim collected $12,000 in advance fees and completed 75% of the work related to these fees. What adjusting entry is required by Jim's firm at the end of June
Answer:
Legal Service Revenue Dr $3000
Unearned Revenue Cr $3000
This is due to the fact that the amount of 25% of the work is undone. Hence, it is recorded as a liability and since it is earned, it is shown as unearned revenue.
The adjusting entry required as a result of Jim collecting money in advance is:
Date Account Title Debit Credit
June XXXX Legal Service Revenue $3,000
Unearned Revenue $3,000
Revenue should only be recognized when the work related to it has been done. Jim only managed to do 75% of the work which means that revenue cannot be recognized on 25%.
This 25% is:
= 25% x 12,000
= $3,000
This amount will be credited to the Unearned Revenue account until Jim completes the work.
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Castle Corporation conducts business in States 1, 2, and 3. Castle’s $630,000 taxable income consists of $555,000 apportionable income and $75,000 allocable income generated from transactions conducted in State 3. Castle’s sales, property, and payroll are evenly divided among the three states, and the states all employ a three-equal-factors apportionment formula.
Determine how much of Castle’s income is taxable in each of the following states.
a. State 1: $ _________
b. State 2: $ _________
c. State 3: $ _________
Answer and Explanation:
The computation of the taxable income in each states is shown below:
a. For state 1
= Apportionable income ÷ number of states
= $555,000 ÷ 3
= $185,000
b. For state 2
= Apportionable income ÷ number of states
= $555,000 ÷ 3
= $185,000
c. For state 3
= $185,000 + $75,000
= $260,000
Which of the following addresses the economic question of how to produce?
a. growing corn instead of potatoes
b. requiring individuals to complete specific types of work
c. producing more capital goods and fewer consumer products
d. selling natural resources to other countries
Answer:
b. requiring individuals to complete specific types of work
Explanation:
Among the following options, the statement that addresses the economic question of how to produce is "requiring individuals to complete specific types of work"
This is because as a producer one may choose to use either a certain individual to complete a specific type of work or employ the service of machinery, an ex-pat from another country, or just a technical expert in a government-funded organization.
Therefore, each of the options will yield a different cost to the producer.
You and your friends want to buy a condo at the beach to time share. Each of you has single peaked preferences with a most preferred value that you are willing to spend. These values are: Mabel, $10,000; Gertrude, $20,000; Myron, $30,000; Wilber, $40,000; and you, $50,000. The condo costs $150,000. Explain how to implement a uniform rule mechanism to allocate costs and shares.
Answer:
Individual Cost Shares to be enjoyed
Mabel $10,000 10000 / 150000 = 6.67%
Gertrude $20000 20000 / 150000 = 13.3%
Myron $30000 30000 / 150000 = 20%
Wilber $40000 40000 / 150000 = 26.6%
You $50000 50000 / 150000 = 33.3%
Explanation:
peaked preferences
Most preferred value to spend :
Mabel = $10,000
Gertrude = $20,000
Myron = $30,000
Wilber = $40,000
you = $50,000
cost of Condo = $150,000
Implementing a Uniform rule mechanism to allocate costs and shares
The uniform rule ; ∑ j∈I Uj (p) = Ω.
where Ω = fixed amount of resource
hence the summation of all allotment should = Ω ( $150,000 )
Number of friends = 5
cost of condo = $150,000
If divide equally each person will have to pay ; $150,000 / 5 = $30,000
Total money to be spent by friends = 10,000 + 20,000 + 30,000 + 40,000 + 50,000 = $150,000
Individual Cost shares to be enjoyed
Mabel $10,000 10000 / 150000 = 6.67∑%
Gertrude $20000 20000 / 150000 = 13.3%
Myron $30000 30000 / 150000 = 20%
Wilber $40000 40000 / 150000 = 26.6%
You $50000 50000 / 150000 = 33.3%
∑shares ≈ 100% ( 150,000 )
How dose biodiversity affect ecosystem stability
Answer:
It has been shown that biodiversity of an area has a large impact on the ecosystem stability of that area. this has increase in complexity makes it more likely that the ecosystem will return to a stable state after a disturbance, because the ecosystem has more ways to respond to a disturbance and fix probl
In your own words, discuss GAP management and then suggest a way to reduce the impact of its limitation. Do not duplicate limitations and solutions; that is, you can discuss the same limitation as a fellow student if you are able to suggest a different way of reducing the impact.
Answer:
Gap management is a strategy which every business follows. A business can be successful only if it sets goals for its future.
Explanation:
Gap management is the difference between where an organization stands today and where it wants to be in future. A company's management will set its own targets and then sets position of the company. There are limitation of gap management as there can be targets which are sometimes unachievable or there are some external forces which hinders the business progress.
Cincy Machinery stock currently sells for $77 per share. The market requires a return of 14 percent while the company maintains a constant 6 percent growth rate in dividends. What was the most recent annual dividend per share paid on this stock (that is, this year's dividend)
Answer:
$5.81
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 =do(1 + g) = next dividend to be paid
r = cost of equity
g = growth rate
(do x 1.06) / (0.14 - 0.06) = 77
(d0 x 1.06) / 0.08 = 77
Multiply both sides by 0.08
d0 x 1.06 = 6.16
divide both sides by 1.06
d0 = 5.81
"We are certainly in a better position in terms of diversity management than we were five years ago," said Patricia Collins-Jones, CEO of BetterFit, Inc. "We certainly have a more diverse employee population, and we have taken steps to involve people from different backgrounds in our business operations. However, I expect us to do more. We must be an organization where diversity not only exists, but is valued. We must ____________________."
Answer: fully integrate minority group members both formally and informally.
Explanation:
The options are:
a. Encourage monitory group members to adopt the norms of the majority.
b. fully integrate minority group members both formally and informally.
c. strive to build a more homogeneous employee population.
d. focus primarily upon employees visible differences like race or sex.
e. encourage more intergroup productive conflict.
Diversity simply refers to when people from different social, ethnic backgrounds or people from different races, religions, genders, etc are involved in a company or a particular thing.
Since the CEO calls for diversity to exist and be valued, the best option will be to fully integrate minority group members both formally and informally. This will help in making the minority group valued and also bring about diversity.
Other options are wrong as they either bring about discrimination or can bring about quarrel. Therefore, the correct option is B
Orion Flour Mills purchased a new machine and made the following expenditures:
Purchase price $55,000
Sales tax 5,000
Shipment of machine 800
Insurance on the machine for the first year 500
Installation of machine 1,600
The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash.
Required:
Record the above expenditures for the new machine.
Answer:
Dr Equipment 62400
Dr Prepaid Insurance 500
Cr Cash 2900
Cr Accounts Payable 60,000
Explanation:
Preparation of the journal entry to Record the above expenditures for the new machine.
Dr Equipment 62400
Dr Prepaid Insurance 500
Cr Cash 2900
Cr Accounts Payable 60,000
(62,400+500-2900)
Equipment:
Purchase price ($55,000) + Sales tax (5,000) + Shipping (800) + Installation (1,600) =
Total cost 62400
Cash:
Shipment of machine (800) + Insurance on the machine ((500)) +Installation of the machine (1,600) = 2900
The owners of Whitewater rafting are currently contemplating a manufacturing process (Old Process) that will require an investment of $4,000 and a variable cost of $6 per raft vs. a larger (New Process) initial investment of $20,000 with more automated equipment that would reduce their variable cost of manufacture to $2 per raft. Compare the two manufacturing processes proposed here. For what volume demand should each process be chosen?
A. From 0 to 1000 choose Old Process, From 1000 to infinity choose New Process
B. From 0 to 4000 choose New Process, From 4000 to infinity choose Old Process
C. From 0 to 4000 choose Old Process, From 4000 to infinity choose New Process
D. Always use the Old Process and never use the New Process
E Always use the New Process and never use the Old Process
Answer:
C. From 0 to 4000 choose Old Process, From 4000 to infinity choose New Process
Explanation:
Let the number of raft be denoted by Y
We are told that old process requires an investment of $4,000 and a variable cost of $6 per raft
Thus, old process cost is;
C_old = 4000 + 6Y
We are told that the new process has an investment of $20,000 and that the variable cost is $2 per raft..
Thus, new process cost is;
C_new = 20000 + 2Y
To find the volume demand by which each process will be chosen, we will equate both old and new costs to get;
4000 + 6Y = 20000 + 2Y
Rearranging, we have;
6Y - 2Y = 20000 - 4000
4Y = 16000
Y = 16000/4
Y = 4000
Thus, old process should be applied from 0 to 4000 and new process should be applied from 4000 to infinity.
Thus, option C is correct.
You are choosing between two goods, X and Y, and your marginal utility from each is as shown in the table above. If your income is $9 and the prices of X and Y are $2/unit and $1/unit, respectively, what quantities of each will you purchase to maximize utility?
The quantities of good X and good Y that would be bought to maximize the utility value would be:
C). X - 2; Y - 5
Marginal Utility"Marginal Utility" is defined as the extra utility or contentment received by a customer on the purchase of an extra unit of a good.
Given that,
Income [tex]=[/tex] $[tex]9[/tex]
Price of good X [tex]=[/tex] $[tex]2 /unit[/tex]
Price of good Y [tex]=[/tex] $[tex]1/unit[/tex]
Units of X [tex]MU_{X}[/tex] Units of Y [tex]MU_{Y}[/tex]
1 10 1 8
2 8 2 7
3 6 3 6
4 4 4 5
5 3 5 4
6 2 6 3
We know that,
For maximum utility
[tex]= MU_{X} /Price of X = MU_{Y} /Price of Y[/tex]
So,
[tex]10/2 = 5/1[/tex]
[tex]2[/tex] × [tex]2 + 5[/tex] × [tex]1 = 9[/tex]
2 units of X and 5 units of Y gives maximum utility at the given income with a total utility of $48.
Thus, option C is the correct answer.
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Prepare a flexible budget for Cedar Jeans Company using production levels of 16,000, 18,000, and 20,000 units produced. The following is additional information necessary to complete the budget: Variable costs: Direct labor ($6.00 per unit) Direct materials ($8.00 per unit) Variable manufacturing costs ($2.50 per unit) Fixed costs: Supervisor's salaries $80,000 Rent 12,000 Depreciation on equipment 24,000
Answer:
Results are below.
Explanation:
Giving the following information:
Total unitary variable cost= $16.5
Total fixed costs= $116,000
Now, the flexible budget for each production level:
16,000 units:
Total variable cost= 16.5*16,000= 264,000
Total fixed cost= 116,000
Total costs= $380,000
18,000 units:
Total variable cost= 16.5*18,000= 297,000
Total fixed cost= 116,000
Total costs= $413,000
20,000 units:
Total variable cost= 16.5*20,000= 330,000
Total fixed cost= 116,000
Total costs= $446,000
The balance in Accounts Receivable at the beginning of the year amounted to $1,920. During the year, $7,160 of credit sales were made to customers. If the ending balance in Accounts Receivable amounted to $1,220, and uncollectible accounts expense amounted to $500, what is the amount of cash inflow from customers that would appear in the operating activities section of the cash flow statement
Answer:
$7,360
Explanation:
To determine the amount of cash inflow from customers open a Total Receivable Account and determine the Cash Balance.
Total Receivable T - Account
Debit :
Beginning Balance $1,920
Credit Sales $7,160
Total $9,080
Credit :
Uncollectable expense $500
Cash Received (Balancing figure) $7,360
Ending Balance $1,220
Total $9,080
Conclusion :
the amount of cash inflow from customers is $7,360
Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.
Transactions Units Units Cost
a. Inventory, Beginning For the year 300 $19
b. Purchase, April 11 900 17
c. Purchase, June 1 800 20
d Sale, May 1 (sold for $47 per unit) 300
e. Sale, July 3 (sold for $47 per unit) 680
f. Operating expenses (excluding income tax expense), $18,700
Required:
1. Calculate the number and cost of goods available for sale.
2. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost.
3. Prepare an Income Statement that shows the FIFO method, LIFO method, and weighted average method.
Answer:
Results are below.
Explanation:
First, we need to calculate the number and cost of goods available for sale:
Number of units= 300 + 900 + 800= 2,000
Cost of goods available for sale= (300*19) + (900*17) + (800*20)
cost of goods available for sale= $37,000
FIFO:
Under the FIFO (first-in, first-out), the cost of goods sold is calculated using the cost of the firsts units incorporated into inventory.
COGS= 300*19 + 680*17= $17,260
Ending inventory= 37,000 - 17,260= $19,740
LIFO:
Under the LIFO (last-in, first-out), the cost of goods sold is calculated using the cost of the lasts units incorporated into inventory.
COGS= 800*20 + 180*17= $19,060
Ending inventory= 37,000 - 19,060= $17,940
Weighted-average:
Weighted-average cost= 37,000/2,000= $18.5 per unit
COGS= 980*18.5= $18,130
Ending inventory= 1,020*18.5= $18,870
Finally, the income statements for each method:
FIFO:
sales= (980*47)= 46,060
COGS= (17,260)
Gross profit= 28,800
Operating expenses= (18,700)
Net operating income= 10,100
LIFO:
sales= (980*47)= 46,060
COGS= (19,060)
Gross profit= 27,000
Operating expenses= (18,700)
Net operating income= 8,300
Weighted-average:
sales= (980*47)= 46,060
COGS= (18,130)
Gross profit= 27,930
Operating expenses= (18,700)
Net operating income= 9,230
Greene, Inc. uses the LIFO inventory method for external reporting and for income tax purposes but maintains its internal records using FIFO. The following disclosure note was included in a recent annual report:
Inventories ($ in millions):
2021 2020
Total inventories $600 $580
LIFO reserve (75) (50)
The company's income statement reported cost of goods sold of $2,750 million for the fiscal year ended December 31, 2021.
Required:
a. Drew adjusts the LIFO reserve (Allowance to Reduce Inventory to LIFO) at the end of its fiscal year. Prepare the December 31, 2021, adjusting entry to record the cost of goods sold adjustment.
b. If Drew had used FIFO to value its inventories, what would cost of goods sold have been for the 2021 fiscal year?
Answer:
a. Debit Cost of goods sold for $25; and Credit LIFO Reserve for $25.
b. Cost of goods sold in 2021 if FIFO is used would have been $2,775.
Explanation:
a. Greene adjusts the LIFO reserve (Allowance to Reduce Inventory to LIFO) at the end of its fiscal year. Prepare the December 31, 2021, adjusting entry to record the cost of goods sold adjustment.
Change in LIFO reserve = Current year LIFO reserve = LIFO Reserve balance in 2021 - LIFO Reserve balance in 2020 = $75 - $50 = $25
The adjusting entry will therefore look as follows:
Date General Journal Debit ($'m) Credit ($'m)
31 Dec 2021 Cost of goods sold 25
LIFO Reserve 25
(To record the cost of goods sold adjustment.)
b. If Green had used FIFO to value its inventories, what would cost of goods sold have been for the 2021 fiscal year?
This can be calculated as follows:
Cost of goods sold in 2021 if FIFO is used = Cost of goods sold reported in the income statement + Change in LIFO reserve = $2,750 + $25 = $2,775
Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017. Garcia Company issues 8.00%, 15-year bonds with a par value of $290,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6.00%, which implies a selling price of 114 3/4.
Answer:
Dr Cash $332,775
Cr Bonds payable $290,000
Cr Premium on bonds payable $42,775
Explanation:
Preparation of the journal entry to record the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017
Based on the information given the journal entry to record the issuance of these bonds will be:
Dr Cash ($290000/100*114.75) $332,775
Cr Bonds payable $290,000
Cr Premium on bonds payable ($332,775-$290,000) $42,775
(To record issuance of bonds)
According to O*NET, what is the projected growth for this career between 2019–2029?
Answer:
Average
Explanation:
Select the correct answer.
Which product is an athlete more likely to endorse?
A.
wine
B.
fast food
C.
sports drink
D.
tobacco products
Answer:
Which product is an athlete more likely to endorse? Fast Food
Assume that the entry closing total revenues of $284,900 and total expenses of $212,600 has been made for the year ending December 31. At the end of the fiscal year, Teresa Schafer, Capital has a credit balance of $330,000 and Teresa Schafer, Drawing has a balance of $27,600.
A. Journalize the entry required to close the Teresa Schafer, Drawing account.
B. Determine the amount of Teresa Schafer, Capital at the end of period.
Answer and Explanation:
a. The journal entry to record the closing of drawing account is given below:
Teresa Schafer, Capital $27,600
Teresa Schafer, Drawing $27,600
(Being closing of drawing account is recorded)
b. The ending capital is
= Credit balance of capital - drawings
= $330,000 - $27,600
= $302,400
Flag As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March of 2012 were as follows: $120,000, $140,000 and $150,000. 20% of each months sales are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with remaining 40% collected in the following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of february
Answer:
Grackle Company
The total cash collected (both from accounts receivable and for cash sales) in the month of february is:
= $133,600.
Explanation:
a) Data and Calculations:
January 1, Accounts receivables = $50,000
January 2012, Sales = $120,000
February 2012, Sales = $140,000
March 2012, Sales = $150,000
January February March
Sales $120,000 $140,000 $150,000
20% Cash Sales 24,000 28,000 30,000
80% Credit Sales 96,000 112,000 120,000
Cash Collections:
20% Cash Sales 24,000 28,000 30,000
60% month of sale 57,600 67,200 72,000
40% following month 50,000 38,400 44,800
Total collections $131,600 $133,600 $146,800
Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 8% with semiannual payments of $40, and a par value of $1,000. The price of each bond in the issue is $1,196.00. The bond issue is callable in 5 years at a call price of $1,080. What is the bond's current yield
Answer:
6.69%
Explanation:
Price of Ace products bond issue = $1,196
Annual coupon payment = $80
Current yield = Annual coupon payment / Bond price
Current yield = $80/$1,196
Current yield = 0.0668896
Current yield = 6.69%
What is the eventual effect on real GDP if the government increases its purchases of goods and services by $50,000? Assume the marginal propensity to consume (MPC) is 0.75. $ What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $50,000? Assume the MPC has not changed. $ An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in
Answer:
a. The real GDP increases by $200,000.
a. The real GDP increases by $150,000.
Explanation:
a. What is the eventual effect on real GDP if the government increases its purchases of goods and services by $50,000?
Eventual effect on real GDP = Amount of increase in government spending * (1 /(1 - MPC)) = $50,000 * (1 / (1 – 0.75)) = $200,000
Therefore, the real GDP increases by $200,000.
a. What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $50,000?
Eventual effect on real GDP = (Amount of increase in government transfers * (1 /(1 - MPC))) - Amount of increase in government transfers = ($50,000 * (1 / (1 – 0.75))) - $50,000 = $150,000
Therefore, the real GDP increases by $150,000.
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year.Beginning Inventory Ending InventoryRaw material* 41,000 51,000Finished goods 81,000 51,000* Three pounds of raw material are needed to produce each unit of finished product.If Paradise Corporation plans to sell 485,000 units during next year, the number of units it would have to manufacture during the year would be:
Answer:
Production= 455,000 units
Explanation:
Giving the following information:
Beginning Inventory= 81,000
Ending Inventory= 51,000
Sales= 485,000
To calculate the production required for the period, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 485,000 + 51,000 - 81,000
Production= 455,000 units
Convertible securities are bonds or preferred stock that, under specified terms and conditions, can be exchanged for common stock at the option of the holder. Conversion of these securities does not provide new capital; debt (or preferred stock) is simply replaced on the balance sheet by common stock. However, reducing the debt or preferred stock will improve the firm’s financial position and make it easier to raise additional capital, but raising additional capital requires a separate action.
The conversion ratio ( ) is the number of shares of common stock that are obtained by converting a convertible bond or share of convertible preferred stock. The conversion price ( ) is the effective price paid for common stock obtained by converting a convertible security. From the standpoint of the issuer, which of the following statements is a disadvantage of convertibles?
a. Because convertibles have low coupon rates, they require the firm to sell common stock at discount prices relative to prices that are currently prevailing.
b. Convertibles typically have a low coupon interest rate, and the advantage of this low-cost debt will be lost when conversion occurs.
c. If the company truly wants to raise equity capital and if the stock price does not rise sufficiently after the bond is issued, then the company will be stuck with debt rather than the desired equity. ___________ is/are correct.
Answer:
Statement B and Statement C are Correct. And Statement A is not Correct.
Explanation:
Solution:
In this question, statement B and Statement C are correct and Statement A is incorrect. Because:
From the standpoint of the issuer, both Statements B and C are a disadvantages of convertibles. So, statement B and B are correct.
The reason why Statement A is not correct is because convertibles tend to provide an opportunity to the person who is issuer of the convertibles to in order to sell common stock at premium or higher prices with respect to or relative to the prices that are currently prevailing prices.
Hence, Statement A is not correct.
Seo Yeon is a paid intern working for a small team of four software developers. Each member of the team is facing different deadlines and requires her support at different times—and all of them want to pawn their least enjoyable tasks off on her. Seo Yeon is there to learn and is happy to help out on any tasks they can give her, but she only has 40 hours per work week to offer.
Identify the solution that is likely to best allocate her time between the four team members.
A. Seo Yeon should only work on tasks that provide her with the opportunity to further her personal knowledge.
B. Seo Yeon should set up an internal market, allocating 10 hours per week to each team member and allowing them to trade hours among themselves over the course of a month.
C. Seo Yeon should determine which team member is most valuable to the company and allocate all 40 hours to that team member.
D. Seo Yeon should allocate 10 hours per week to each team member and ensure that her time is distributed fairly between the team members each week.
Answer: B. Seo Yeon should set up an internal market, allocating 10 hours per week to each team member and allowing them to trade hours among themselves over the course of a month.
Explanation:
From the options given in the question, the solution that is likely to best allocate her time between the four team members will be option B "Seo Yeon should set up an internal market, allocating 10 hours per week to each team member and allowing them to trade hours among themselves over the course of a month".
Since the teams have different deadlines, she should allocate her time equally to the four teams and help them out based on their deadlines as those with nearer deadlines should be helped first. We should also note that she shouldn't allocate the whole 40 hours to a particular team as that's not fair and can bring about disunity.
Seo Yeon should set up an internal market, allocating 10 hours per week to each team member and allowing them to trade hours among themselves over the course of a month.
Explanation:
From the options given in the question, the solution that is likely to best allocate her time between the four team members will be option B "Seo Yeon should set up an internal market, allocating 10 hours per week to each team member and allowing them to trade hours among themselves over the course of a month".Since the teams have different deadlines, she should allocate her time equally to the four teams and help them out based on their deadlines as those with nearer deadlines should be helped first. We should also note that she shouldn't allocate the whole 40 hours to a particular team as that's not fair and can bring about disunity.To learn more,
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