Price elasticity of demand is an economic measure used to calculate the degree of demand change as a result of a variation in price. Price elasticity of demand refers to the degree of responsiveness or reaction of the quantity demanded of a good or service to a change in its price.
In this case, the price of pens in a college town increased by 25%, and the quantity demanded of pens decreased from 3,000 to 1500. To calculate the price elasticity of demand, we'll use the following formula: Price elasticity of demand
= percentage change in quantity demanded / percentage change in price The percentage change in price
= 25%
= 0.25The percentage change in quantity demanded = ((3000-1500) / (3000+1500)) / 2. Hence, percentage change in quantity demanded is 33.3% (rounded to one decimal place).
= 33.3% / 25%
= 1.33Since the calculated price elasticity of demand is greater than 1, the demand for pens is elastic.
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of the five-year period, Ybarra must pay the bond holders a balloon payment of $400,000. a. What would the issue price of the bonds be if the prevailing interest rate is: Round answers to the nearest whole number. (i) 4%$ (ii) 6%$ b. Compute the market price of these bonds on November 1, 2017 assuming that the prevailing market interest rate at that 8% Round answer to the nearest whole number. q
The issue price of the bonds with a prevailing interest rate of 6% would be approximately $311,434.
To calculate the issue price of the bonds, we can use the present value formula. The present value of the balloon payment can be calculated as the discounted value of the future payment.
a. Assuming the prevailing interest rate is:
(i) 4%
(ii) 6%
Let's calculate the issue price for each case:
(i) Prevailing interest rate of 4%:
To calculate the issue price, we need to discount the $400,000 balloon payment back to its present value using a 4% discount rate. Since the balloon payment is due after five years, we will discount it for five periods.
Issue price = $400,000 / (1 + 0.04)^5
Issue price ≈ $329,481
Therefore, the issue price of the bonds with a prevailing interest rate of 4% would be approximately $329,481.
(ii) Prevailing interest rate of 6%:
Using the same formula, we can calculate the issue price with a 6% discount rate.
Issue price = $400,000 / (1 + 0.06)^5
Issue price ≈ $311,434
b. To compute the market price of these bonds on November 1, 2017, assuming a prevailing market interest rate of 8%, we need to compare the coupon rate of the bond (which is not provided) with the prevailing market interest rate.
If the coupon rate is equal to the market interest rate of 8%, the bond will be priced at its face value, which is typically $1,000 or $1,000 per bond.
If the coupon rate is higher than 8%, the bond will be priced at a premium (above face value).
If the coupon rate is lower than 8%, the bond will be priced at a discount (below face value).
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Column A
Column B
General Manager
2. Sales Manager
3. Human Resources
4. Housekeeping
5. Food & Beverage
Time left for
assessme
156:1
a. Deliver food and beverage and related services and amenities to all customers.
b. Able to work in all the departments
Empty bins and all garbage's
d. General upkeep of the building including interior and exterior
e. Ensure that all staff work according to government rules and notify of any wrong doing
f. Incharge of only the revenue generating departments to make profit
g. General maintenance of all equipments
h. Delivery of food to only inhouse guest
i. Clean and sanitize all guest and staff areas
J. Bring in new business and maintain client relation to retain existing business
k.. Meeting clients and telling them how they should run their business
1. Work around policies that will best suit the establishment and staff
m. Manages the profitability of the whole operations by leading the team
The General Manager oversees overall operations, maximizes revenue, coordinates departments, ensures compliance, maintains cleanliness, expands clientele, and follows guidelines.
The General Manager is in charge of managing the business' overall operations and guaranteeing its profitability. To maximize revenue and successfully control costs, they manage a team and make strategic decisions. To guarantee efficient operation and coordination, they collaborate closely with all departments, including Sales, Human Resources, Housekeeping, and Food & Beverage. The general manager makes sure that everyone on staff complies with all laws and standards, and that any infractions are dealt with right away. They are also in responsible of ensuring the cleanliness and general upkeep of the structure, both inside and out. The general manager also concentrates on expanding the company's clientele and developing new business to keep current clients. They operate within specified guidelines to create a setting that is ideal for the establishment and its workers.
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a. Whit would Rockis profit margin be if the Lime division were dropped? b. What would Rock's profit margin be if the Nina division were dropped?
a. The profit margin is the amount by which revenue from sales exceeds costs of goods sold or production. It is usually expressed as a percentage of sales. Rock Company has two divisions, Lime and Nina. If Lime division is dropped, it would result in a decrease in both revenue and expenses.
The costs associated with Lime division, including the cost of goods sold, direct labor costs, and direct materials costs would all decrease, while sales revenue would also decrease. However, the decrease in expenses would be greater than the decrease in revenue, as the Lime division was operating at a loss. Thus, the profit margin would increase if Lime division were dropped.b. Similarly, if the Nina division were dropped, it would also result in a decrease in both revenue and expenses.
It is important to note that dropping a division may have other impacts beyond the changes in revenue and expenses. It may also affect the overall business strategy and future growth potential of the company. Therefore, the decision to drop a division should be carefully considered based on a variety of factors, not just the impact on profit margin.
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a firm's cost of capital should be computed using the book weights of each financing source.
The cost of capital is an important metric for businesses as it represents the minimum rate of return required to undertake an investment or project.
In order to compute the cost of capital, a firm's financing sources and their respective weights must be taken into account.There are two main ways to compute a firm's cost of capital: using market weights or book weights. Market weights are calculated based on the market value of each financing source, whereas book weights are calculated based on the accounting value of each financing source.
While both methods have their advantages and disadvantages, using book weights to compute a firm's cost of capital is generally considered less accurate.
This is because book values do not necessarily reflect the current market value of a firm's financing sources, which can fluctuate over time. Furthermore, book values may not take into account certain intangible assets or liabilities that can impact a firm's cost of capital.In contrast, using market weights provides a more accurate representation of a firm's true cost of capital, as it takes into account the current market value of each financing source.
This can help businesses make more informed investment decisions and better allocate their financial resources.In conclusion, while it is possible to compute a firm's cost of capital using book weights, it is generally recommended to use market weights instead. This ensures a more accurate representation of a firm's true cost of capital and can help businesses make more informed investment decisions.
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Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $500,000 long-term loan from Gulfport State Bank, $100,000 of which will be used to bolster the Cash account and $400,000 of which will be used to modernize equipment. The company’s financial statements for the two most recent years follow:
Sabin Electronics
Comparative Balance Sheet
This Year Last Year
Assets
Current assets:
Cash $ 70,000 $ 150,000
Marketable securities 0 18,000
Accounts receivable, net 480,000 300,000
Inventory 950,000 600,000
Prepaid expenses 20,000 22,000
Total current assets 1,520,000 1,090,000
Plant and equipment, net 1,480,000 1,370,000
Total assets $ 3,000,000 $ 2,460,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities $ 800,000 $ 430,000
Bonds payable, 12% 600,000 600,000
Total liabilities 1,400,000 1,030,000
Stockholders' equity:
Common stock, $15 par 750,000 750,000
Retained earnings 850,000 680,000
Total stockholders’ equity 1,600,000 1,430,000
Total liabilities and stockholders' equity $ 3,000,000 $ 2,460,000
Sabin Electronics
Comparative Income Statement and Reconciliation
This Year Last Year
Sales $ 5,000,000 $ 4,350,000
Cost of goods sold 3,875,000 3,450,000
Gross margin 1,125,000 900,000
Selling and administrative expenses 653,000 548,000
Net operating income 472,000 352,000
Interest expense 72,000 72,000
Net income before taxes 400,000 280,000
Income taxes (30%) 120,000 84,000
Net income 280,000 196,000
Common dividends 110,000 95,000
Net income retained 170,000 101,000
Beginning retained earnings 680,000 579,000
Ending retained earnings $ 850,000 $ 680,000
During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 2/10, n/30. All sales are on account.
Required:
1. To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year:
a. The amount of working capital.
b. The current ratio.
c. The acid-test ratio.
d. The average collection period. (The accounts receivable at the beginning of last year totaled $250,000. )
e. The average sale period. (The inventory at the beginning of last year totaled $500,000. )
f. The operating cycle.
g. The total asset turnover. (The total assets at the beginning of last year were $2,420,000. )
h. The debt-to-equity ratio.
i. The times interest earned ratio.
j. The equity multiplier. (The total stockholders’ equity at the beginning of last year totaled $1,420,000. )
2. For both this year and last year:
a. Present the balance sheet in common-size format for both this year and last year.
b. Present the income statement in common-size format down through net income for both this year and last year
To approach the bank about the loan, several financial ratios need to be computed for both this year and last year for Sabin Electronics. These ratios include working capital, current ratio, acid-test ratio, average collection period, average sale period, operating cycle, total asset turnover, debt-to-equity ratio, times interest earned ratio, and equity multiplier. Additionally, the balance sheet and income statement need to be presented in common-size format for both years.
1. Financial Ratios:
a. Working capital: This is calculated by subtracting current liabilities from current assets.
b. Current ratio: This ratio is determined by dividing current assets by current liabilities.
c. Acid-test ratio: Also known as the quick ratio, it is computed by dividing quick assets (current assets excluding inventory) by current liabilities.
d. Average collection period: It is found by dividing accounts receivable by average daily sales.
e. Average sale period: Calculated by dividing inventory by average daily cost of goods sold.
f. Operating cycle: The sum of the average collection period and average sale period.
g. Total asset turnover: Calculated by dividing net sales by average total assets.
h. Debt-to-equity ratio: This ratio is determined by dividing total debt by total equity.
i. Times interest earned ratio: Computed by dividing net operating income by interest expense.
j. Equity multiplier: This ratio is found by dividing total assets by total equity.
2. Common-size Statements:
a. The balance sheet in common-size format expresses each item as a percentage of total assets.
b. The income statement in common-size format presents each item as a percentage of net sales.
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, consider how societal and organizational structures
(critical
management theory in Week 2) affect individual managers' ability to move toward a
more professional management practice.
The concept of critical management theory is based on the idea that managers are not objective and neutral and that their personal interests and societal values influence their decision-making. The organizational and societal structures shape the way managers think and act, influencing their ability to move toward more professional management practices.
Critical management theory is a theoretical framework that critiques the assumptions and practices of traditional management theories. It emphasizes that managerial decisions and practices are not objective but rather are influenced by the managers' personal interests, societal values, and power relationships in the organization. The societal and organizational structures affect individual managers' ability to move toward a more professional management practice in several ways.
The societal structures in which organizations operate shape the behavior of managers. Society's expectations of managers and their behaviors have a significant impact on organizational structures. For instance, organizations are expected to operate in a socially responsible manner, which means that managers must take into account societal expectations and values while making decisions.
Organizational structures, such as hierarchies, reward systems, and communication channels, also affect the managers' ability to move towards more professional management practices. For instance, if an organization has a hierarchical structure, it may make it difficult for managers to share their ideas and collaborate with their peers. Additionally, if the reward system does not incentivize professional behavior, it may be difficult for managers to adopt professional management practices. Therefore, societal and organizational structures shape individual managers' behavior and affect their ability to move towards more professional management practices.
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Suppose that on January 15,2010 , the Canadian government issued a five-year inflation-indexed note with a coupon of 4%. On the date of issue, the consumer price index (CPI) was 265. By January 15, 2015, the CPI had increased to 322 . What principal and coupon payment was made on January 15,2015? Assume that the face value is $1000. The principal amount of the bond increased to $ (Round to the nearest cent.) The semi-annual coupon payment is $ (Round to the nearest cent.)
An inflation-indexed bond is a bond in which the principal amount of the bond is adjusted periodically to account for inflation in the economy.
The coupons of these bonds are also adjusted periodically to account for the change in inflation. It allows the investor to earn a return on investment that is not affected by the inflation rate in the economy, thus providing some stability to the investment.
Given,
The Canadian government issued a five-year inflation-indexed note on January 15,2010, with a coupon of 4%. On the date of issue, the consumer price index (CPI) was 265. By January 15,2015, the CPI had increased to 322. The face value is $1000.
To find: What principal and coupon payment was made on January 15,2015?
We know that the coupon payment of the bond is 4% of the face value, which is $1000.
Therefore, the semi-annual coupon payment is $20.
The CPI has increased from 265 to 322 over 5 years.
The principal amount of the bond would be increased by the same percentage as the CPI.
We can use the formula:
Principal amount = (CPI at maturity/CPI at issue date) x Face value of the bond
Where CPI is the Consumer Price Index
Hence,
The principal amount of the bond increased to (322/265) × $1000 = $1215.09 (rounded to the nearest cent)
The semi-annual coupon payment is $20 (rounded to the nearest cent).
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Suppose the U.S. dollars appreciate against the Japanese Yuan. Would imports from Japan to the U.S. increase or decrease? Would exports from the U.S. to Japan increase or decrease?(Minimum words requirement: 100 words)
When the US dollars appreciate against the Japanese yen, imports from Japan to the US decrease, while exports from the US to Japan increase. In general, a higher exchange rate tends to discourage imports and encourage exports, while a lower exchange rate tends to discourage exports and encourage imports.
The exchange rate, which is the value of one currency in terms of another, determines how much of a currency is needed to purchase goods and services from other countries. When the US dollar appreciates relative to the Japanese yen, it means that each dollar is worth more yen.
As a result, Japanese goods become more expensive to purchase in the US, which causes imports from Japan to decrease.On the other hand, American goods become cheaper to buy in Japan, causing exports from the US to increase.
As a result, a stronger dollar makes it more difficult for US companies to sell products abroad, but it also makes it less expensive for US companies to import products from other countries like Japan.The relationship between the exchange rate and international trade is complex, and various factors can affect it.
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an auditor selected a product maintained in the finished goods warehouse. the auditor counted the product and compared this amount with the amount in the finished goods perpetual inventory subsidiary account. which asb balance assertion is the auditor most likely testing?
This audit procedure is essential to ensure that the company's financial statements accurately reflect the value of its finished goods inventory.
The auditor is most likely testing the accuracy assertion of the finished goods inventory.
In auditing, the accuracy assertion refers to the correctness and accuracy of the financial information presented in the company's financial statements. By counting the physical inventory and comparing it to the amount recorded in the finished goods perpetual inventory subsidiary account, the auditor is verifying whether the recorded inventory quantity is accurate and in agreement with the actual physical inventory on hand.
Any discrepancies found during the audit may indicate potential errors in recording, misstatements, or other issues related to inventory management and control.
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TRUE/FALSE. resort gift shop is operated as a partnership, with five partners. shan has a one-third interest in the firm. each of the other partners has a one-sixth interest. thieu is the senior partner. with respect to management decisions
True. In a partnership, the management decisions are typically made by the partners collectively. In this case, the resort gift shop is operated as a partnership with five partners. Shan has a one-third interest in the firm, and each of the other partners has a one-sixth interest. Thieu being the senior partner means that he has a higher position or authority within the partnership. As a result, Thieu may have more influence or decision-making power when it comes to management decisions. However, it is important to note that major decisions should be made collectively by all the partners, as this is a characteristic of partnerships.
Ivy Com, has received a request for a special order of 9,000 units of product G4 for $46.15 each. The normal selling price of this product is 551.16cach, but the units would need to be modified slightly for the customer. The normal unit product cost of product G4 is computed as follows: Direct materials $17.68. Dirct labor $6.31 Variable manufacturing overhead \$3.84 Fixed manufacturing overhead $6.70 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overthead costs. The customer would like some modifications made to product G4 that would increase the variable costs by $6.03 per tnit and that would require a one-time imvestment of $46410 in special molds that would have no salvage value. This special order would have no effect on the company's otber sales. The company has ample spare capacity for producing the special order. Determine the effect on total net operating income of accepting the special order. Round only your final answer to the nearest dollar and enter a loss as negative, a gain as positive.
Accepting the special order would result in an increase in total net operating income of $64,200.
To determine the effect on total net operating income of accepting the special order, we need to calculate the incremental costs and revenues associated with the order.
Incremental revenue:
Number of units in the special order: 9,000
Selling price per unit: $46.15
Incremental revenue = 9,000 units × $46.15 per unit = $415,350
Incremental costs:
Direct materials: $17.68 per unit
Direct labor: $6.31 per unit
Variable manufacturing overhead: $3.84 per unit
Additional variable costs per unit due to modifications: $6.03 per unit
Total variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead + Additional variable costs
Total variable cost per unit = $17.68 + $6.31 + $3.84 + $6.03 = $33.86
Incremental fixed costs:
There are no incremental fixed costs since the special order would have no effect on total fixed manufacturing overhead costs.
One-time investment in special molds: $46,410
Total incremental costs:
Total variable cost = Total variable cost per unit × Number of units in the special order
Total variable cost = $33.86 × 9,000 units = $304,740
Total fixed costs = $0 (no incremental fixed costs)
Total one-time investment = $46,410
Total incremental costs = Total variable cost + Total fixed costs + Total one-time investment
Total incremental costs = $304,740 + $0 + $46,410 = $351,150
Effect on total net operating income:
Net operating income effect = Incremental revenue - Total incremental costs
Net operating income effect = $415,350 - $351,150 = $64,200
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American General offers a 13-year annuity with a guaranteed rate of 9.54% compounded annually. How much should you pay for one of these annuities if you want to receive payments of $700 annually over the 13 year period? How much should a customer pay for this annuity? $ (Round to the nearest cent.)
A customer should pay approximately $6,037.53 for this annuity.
By using the given parameters of the annuity, including the number of years (13), annual payment ($700), and interest rate (9.54% compounded annually), we can calculate the present value of the annuity using the present value formula. After performing the calculation, we find that the customer should pay approximately $6,037.53 for this annuity. This amount ensures that they will receive annual payments of $700 over the 13-year period. To calculate the amount that should be paid for the annuity, we can use the present value formula for an annuity.
Given:
Number of years (n) = 13
Annual payment (PMT) = $700
Interest rate (r) = 9.54% (convert to decimal: 0.0954)
The present value (PV) can be calculated using the formula:
PV = PMT * (1 - (1 + r)^(-n)) / r
Substituting the given values into the formula:
PV = $700 * (1 - (1 + 0.0954)^(-13)) / 0.0954
Using a calculator, we find that the present value (amount to be paid for the annuity) is approximately $6,037.53.
Therefore, a customer should pay approximately $6,037.53 for this annuity in order to receive annual payments of $700 over the 13-year period.
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Enviro Company issues 8%,10-year bonds with a par value of $250,000 and semianriual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 871/2. Prepare the journal entry for the issuance of the bonds for cash on January 1. Record the issue of bonds with a par value of $250,000. Note: Enter debits before credits.
Cash debit: $218,750, Discount on Payable Bonds debit: $31,250, Bonds Payable credit: $250,000.
The following would be the journal entry for the cash-for-bonds issuance on January 1:
Cash debit: $218,750
Debit: Discount on Payable Bonds $31,250
Bonds Payable, Inc. $250,000
By dividing the $250,000 par value by the 87 1/2% (or 87.5%) selling price, the corporation receives cash in the amount of $218,750. When calculating the discount on bonds payable, the cash received is subtracted from the bonds' par value. It amounts to $31,250 in this instance ($250,000 - $218,750). The par value of $250,000 is then credited to the Bonds Payable account.
Given that the market rate of 10% is higher than the coupon rate of 8%, this entry reflects the bonds being issued at a discount. The Bond Discount The difference between the par value of the bonds and the money investors contributed is represented by the payable account.
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if one added up the value of all intermediate goods that went into the production of real gdp, the total value of intermediate goods would be
The total value of intermediate goods would be equal to the Gross Domestic Product (GDP). Gross Domestic Product (GDP) is a measure of the economic output of a country over a specific period of time (usually a year or a quarter).
GDP measures the total value of all final goods and services produced within a country's borders during a specific period. Intermediate goods, which are goods used in the production process but are not the final output, are not included in GDP directly. This is to avoid double-counting, as their value is already accounted for in the final goods and services.
Instead, GDP captures the value of the final goods and services produced. It represents the total value added at each stage of production, including the value of intermediate goods that have been transformed into final goods.
Therefore, when adding up the value of all intermediate goods that went into the production of real GDP, the total value of intermediate goods would be reflected in the final value of GDP itself.
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Logistics operations can be improved by optimizing aspects of the supply chain, including materials management, order fulfilment, and shipping. It is important for the logistics team to be aware of the negative aspects of this technique that could affect the company's operation effectiveness not only concentrating on just the brighter side for instance: high cost of transportation. greater length of supply-lead-time which results to supplies interruption or supply chain disruption and the effect of political weather or climate change resulting to likelihood of setbacks of product delivery. REGENT BUSINESS SCHOOL (RES) - JANUARY 2022 23 BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT YEAR 2- ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE With this regard, 3.1 Discuss the relationship between Materials Requirements Planning (MRP) and distribution requirements planning (DRP) in relation to the logistics function. 3.2 Explain the role of Direct Product Profitabilty (DPP) in managing logistical costs.
Logistics operations can be improved by optimizing the aspects of the supply chain that include materials management, order fulfillment, and shipping. However, it is important to remember the negative aspects of this technique that could affect the company's operational effectiveness.
Such as the high cost of transportation, the greater length of supply-lead-time, which results in supplies interruption or supply chain disruption, and the effect of political weather or climate change, resulting in the likelihood of setbacks of product delivery.
Materials Requirements Planning (MRP) and Distribution Requirements Planning (DRP) have a strong relationship with the logistics function, and this relationship helps to ensure that materials are available for manufacturing.
MRP is a planning method that is used to calculate materials needs based on sales forecast, which means it is a technique used to determine what material is required for the production of goods and when it is needed. This process uses a computer system to predict material needs and ensures that materials are available to be used when needed.
On the other hand, DRP is a process that is used to manage inventory requirements throughout the supply chain. It helps to ensure that the materials needed are available when they are needed and helps to control the amount of inventory that is held. DRP is particularly useful when trying to balance supply and demand.
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top management’s views about where the company is headed and what its future product-customer-market-technology will be
Top management's views about where the company is headed and its future product-customer-market-technology (PCMT) can vary depending on the specific company and its strategic vision. However, there are some common factors that top management typically considers when shaping their views on the company's direction:
1. Market Analysis: Top management conducts thorough market analysis to identify current and emerging trends, customer preferences, and market opportunities. They assess the competitive landscape and industry dynamics to understand where the company can differentiate itself and capture future market share.
2. Customer Insights: Understanding customer needs, preferences, and behaviors is crucial for determining the future direction of the company. Top management gathers customer insights through market research, customer feedback, and data analysis to identify unmet needs and develop products and services that align with customer expectations.
3. Technological Advancements: Top management monitors technological advancements and assesses their potential impact on the industry and the company's products or services. They stay updated on emerging technologies, digital transformation, and innovation trends to leverage new technologies that can drive future growth and enhance the company's competitive advantage.
4. Strategic Planning: Top management engages in strategic planning processes to define the company's long-term goals and objectives. They consider the organization's strengths, weaknesses, opportunities, and threats (SWOT analysis) to identify areas for improvement and develop strategies that align with the company's capabilities and resources
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Donald E. Petersen, former chairman of the board of Ford Motor Company, remarked, "If we aren’t customer driven, our cars won’t be either."
How do cars add value to people’s lives?
Cars add value to people’s lives by providing convenience, independence, status, employment opportunities, and entertainment. Cars add value to people’s lives in many ways.
Firstly, they provide convenience and mobility to people, allowing them to travel to different places easily and quickly. They also offer a sense of independence and freedom, as people are no longer restricted to public transportation schedules or walking distances.
Secondly, cars provide status and prestige to people who own them. Some people may choose to buy cars that are luxurious or high-end, which can boost their confidence and social status.
Thirdly, cars provide employment opportunities to many people. The automobile industry creates jobs for people in manufacturing, engineering, sales, and many other fields.
Finally, cars can also provide entertainment and recreation to people. Some people enjoy driving for fun, while others may use their cars to go on road trips or explore new places.
In conclusion, cars add value to people’s lives by providing convenience, independence, status, employment opportunities, and entertainment.
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Xion Supply uses a sales journal, a purchases journal, a cash reciepts journal, a cash disbursements journal and a general journal. the following transactions occurred during thr month of march 2020:
Mar. 3 Punchased merchandise for $5,500 on credit from Pace Inc., terms 2/10, n /30. 9. Issued cheque $210 to Narlin Corp. to buy store supplies for $900. 12. Sold merchandise on credit to K. Camp for $1,348, terms n/30. Cost, $609.
17. Issued cheque $211 for $3,000 to repay a note payable to City Bank. 20 Purchased merchandise for $7,000 on credit froe Lebaron, terms 2/19,n/30. 29 Ts5ued cheque #212 to Lebaron to pay the amount due for the purchase of March 20 , less the discount. 31 Paid salary of 53,400 to E. brandon by issuing cheque a213. 31 Issued cheque. M214 to Pace Inc., to pay the amount due for the purchase of March 3.
Journalize the March transactions that should be recorded in the cash disbursements journal assuming the perlstual inventory system.
The transactions recorded in the cash disbursements journal for Xion Supply in March are: March 9 - Cheque #210 to Narlin Corp. for store supplies, March 17 - Cheque #211 to repay note payable to City Bank, March 29 -
In the cash disbursements journal, the transactions recorded are the cash payments made by Xion Supply. Based on the given transactions, on March 9, a cheque is issued to Narlin Corp. for store supplies. On March 17, a cheque is issued to repay a note payable to City Bank. On March 29, a cheque is issued to Lebaron to pay for the purchase made on March 20. On March 31, a cheque is issued to pay salary to E. Brandon and another cheque is issued to Pace Inc. for the purchase made on March 3. These transactions would be recorded in the cash disbursements journal under their respective dates and details.
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ABC is a company with 116,000 outstanding common shares in total, and each share currently is currently traded in the market with a price of $24. ABC also has outstanding bond and preferred shares. The outstanding bond has a total face value of $900,000 and market value of 105% of face value. Its preferred shares has a market price of $38 and total shares outstanding is 51,000. ABC’s cost of common equity, cost of preferred share and cost of debt are 12%, 9% and 8% respectively. What is the cost of capital for ABC? The company’s tax rate is 35%. A. 9.19% B. 12.60% C. 14.94% D. 9.84% E. 10.31%
Therefore, the correct cost of capital for ABC is approximately 12.514%, which corresponds to option B.
We must take into account the weights of each capital structure element, including common equity, preferred shares, and debt, in order to determine ABC's cost of capital. Each component's cost is divided by its share of the capital structure, and the weighted costs are then added together.
We first determine the weights:
Weight of common equity is calculated as follows: 116,000 / (116,000 + 51,000) = 0.694 Number of common shares / Number of outstanding shares
Weight of preferred shares is calculated as follows: 51,000 / (116,000 + 51,000) = 0.306 (Number of preferred shares / Total Shares Outstanding).
Weight of debt is equal to the market value of the outstanding bond divided by the sum of the market values of the outstanding bond, common stock, and preferred stock.
Bond's market value is equal to $900,000 * 1.05, or $945,000.
Common share number times price per share equals market value of common equity.
share = 116,000 * $24 = $2,784,000
The market value of preferred shares is calculated as follows: 51,000 preferred shares at a price of $38 per share.
$945,000 / ($945,000 + $2,784,000 + $1,938,000) = 0.179 is the weight of the debt.
The weighted costs are then determined:
Common equity weighted cost = Common equity weight * Common equity cost = 0.694 * 12% = 8.328%
Weighted cost of preferred shares is equal to Weight of preferred shares times Cost of preferred shares, which is equal to 0.306 times 9%, or 2.754%.
Weighted cost of debt is equal to Weight of debt times Cost of debt (0.179 times 8% equals 1.432%).
In order to determine the cost of capital, we add the weighted costs:
Cost of capital equals the sum of the weighted costs of common equity, preferred shares, and debt, which come to 8.328 percent, 2.75 percent, and 1.43 percent, respectively.
As a result, ABC's cost of capital is roughly 12.514%, which is equivalent to choice B.
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E16-17 Various Unrelated Transactions [LO 16-4]
Following are several unrelated transactions involving a hospital.
1. The hospital has a contractual agreement with a lender requiring that $600,000 in cash be set aside to meet its future debt payment.
2. The hospital accrued $1,600,000 in patient service revenues. Charity services of $465,000 were also provided. Contractual adjustments total $585,000.
3. An increase of $55,000 was recorded for bad debts.
4. General services of $200,000 were donated by technicians. Normally, the hospital would have purchased these specialized services.
5. An endowment contribution of $1,600,000 was received.
6. Investments held by the hospital increased in fair value by $42,000.
7. The hospital purchased $847,000 in equipment with resources that had been contributed in prior years for such a purchase.
Required
a. Prepare journal entries to record the foregoing transactions, assuming the hospital is a not-for-profit facility. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
b. Prepare journal entries to record the foregoing transactions, assuming the hospital is a business-type government facility. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
A journal entry is a way of recording any transaction, whether it is economic or not. An accounting diary that displays the credit and debit positions of a corporation lists transactions. Multiple recordings, every one of which can be a type of debit or credit, may be included in the journal entry.
A journal entry acts as a record of a commercial transaction in your company's books. In double-entry bookkeeping, each transaction necessitates the creation of at least two distinct entries. A bookkeeper tracks all the alterations that a transaction might make to a company by noting them in their diary.
Simply enter one debit along with one credit in your journal. Include more than two accounts, or more than one credit alongside a debit, in your diary entries. At the end of a particular accounting month, adjusting journal entry are made to address problems like unpaid invoices and ensure that the books are in balance.
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You need a new car and the dealer has offered you a price of $20,000, with the following payment options: (a) pay cash and receive a $2000 rebate, or (b) pay a $5000 down payment and finance the rest with a 0% APR loan over 30 months. But having just quit your job and started an MBA program, you are in debt and you expect to be in debt for at least the next 2 1/2 years. You plan to use credit cards to pay your expenses; luckily you have one with a low (fixed) rate of 14.11% APR (monthly). Which payment option is best for you your monthly discount rate is _____%.
A) Your monthly discount rate is?
B) For you, the present value of option B is?
C) Which is the correct decision and why?
A) Monthly Discount Rate:Your annual percentage rate is 14.11%. The monthly percentage rate can be calculated by dividing the annual percentage rate by 12.14.11/12 = 1.175833%monthly discount rate = 0.01175833 = 1.18%,Option A: Paying cash and receiving a $2,000 rebate, will cost $18,000. Option B, on the other hand, necessitates a $5,000 down payment, followed by monthly payments of $7.83 for 30 months, for a total cost of $7.83 * 30 + $5,000 = $7,639. The present value of Option B is $176.52. Option A has a cost of $18,000, whereas Option B has a present value of $176.52. Therefore, Option B is the better option because it has a lower cost.
B) Present Value of Option B:To compute the present value of option B, we must determine the monthly payment for 30 months. Let x be the monthly payment. We know that the amount financed is $20,000 - $5000 = $15,000.
We can then use the present value formula to calculate the present value of option B.PV = x * (1 - (1 + i)^-n)/iwhere i is the monthly interest rate and n is the number of months.PV = x * (1 - (1 + 0.01175833)^-30)/0.01175833PV = x * 22.5308Note that the present value of $1.00 per month for 30 months at an interest rate of 1.175833% per month is 22.5308. Therefore, the present value of the monthly payment x for 30 months is $22.5308x.We can then use the following formula to solve for x:$15,000 = x * (1 - (1 + 0.01175833)^-30)/0.01175833$15,000 * 0.01175833 = x * (1 - (1 + 0.01175833)^-30)$176.37 = x * 22.5308x = $7.83Therefore, the present value of option B is:$7.83 * 22.5308 = $176.52C) Option A: Paying cash and receiving a $2,000 rebate, will cost $18,000. Option B, on the other hand, necessitates a $5,000 down payment, followed by monthly payments of $7.83 for 30 months, for a total cost of $7.83 * 30 + $5,000 = $7,639. The present value of Option B is $176.52. Option A has a cost of $18,000, whereas Option B has a present value of $176.52. Therefore, Option B is the better option because it has a lower cost.
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under the cash method, an item is generally included in gross income for the year in which it is earned, regardless of when the income is collected. a) True b) False
Under the cash method, income is recognized when it is received, irrespective of when it was earned. This approach is straightforward and commonly used by individuals and small businesses. However, larger entities often employ the accrual method for financial reporting. It's advisable to seek guidance from a tax professional or accountant to determine the appropriate accounting method for specific situations.
Under the cash method of accounting, income is recognized and included in gross income for the year in which it is received or collected. This means that income is recognized when actual payment is received, regardless of when the services were provided or when the sales occurred. This method focuses on the actual cash flow and provides a straightforward way of recording income for tax purposes.
In contrast, the accrual method of accounting recognizes income when it is earned, regardless of when the payment is received. This method matches revenue with the corresponding expenses incurred to generate that revenue, providing a more accurate reflection of the financial performance of a business.
The cash method is often used by individuals, small businesses, and certain professional service providers. It offers simplicity and ease of use, as income is recognized when it is actually received. However, for larger businesses and entities that have significant accounts receivable and accounts payable, the accrual method is generally required for financial reporting purposes.
It's important to note that tax regulations and accounting standards may vary across jurisdictions, so it's advisable to consult with a tax professional or accountant to determine the appropriate accounting method to use based on specific circumstances.
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GlobalHead Foundation is a profit-making organization that conducts welfare programs for differently-abled children it strives to keep its pace with its competitors and comes up with equivalent programs that can beneft the children. Recently, the management of GlobalHead had ideas that could put it in the forefront of the healthcare sector. However, the company has been reluctant to take risks and go beyond its usual workflow, In this scenario, GlobalHead is required to. A. have a situational constraint B. set a stretch goal C. have a rotational design D. set a cognitive target
B. Set a stretch goal. GlobalHead Foundation should set a stretch goal to break free from reluctance, inspire innovation, and push for significant achievements.
Setting a stretch goal will help GlobalHead Foundation overcome its reluctance and push itself to go beyond its usual workflow. By aiming for a challenging objective, the organization can inspire its management and employees to think innovatively and come up with ideas that can put them at the forefront of the healthcare sector. This will create a sense of urgency and motivation within the organization, encouraging them to take calculated risks and embrace change.
Setting a stretch goal also fosters a culture of creativity and continuous improvement. It encourages employees to explore new possibilities and push their boundaries to develop equivalent programs that can benefit differently-abled children. By striving for a stretch goal, GlobalHead can differentiate itself from competitors and stay competitive in the sector, ultimately benefiting the children they serve.
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.
arnold industries started the year with $104,800 cash and reported net cash provided by operating activities of $210,000, cash paid for dividends of $42,400, cash received from stock issuance of $34,000, cash paid for equipment purchases of $152,000, cash paid for intangible assets of $106,000, and cash paid on bank loan of $37,000. required: calculate the following: 1. net cash provided by (used in) investing activities. 2. net cash provided by (used in) financing activities. 3. ending cash. 4. free cash flow.
1. Net cash provided by (used in) investing activities: $-258,000
2. Net cash provided by (used in) financing activities: $-3,400
3. Ending cash: $126,400
4. Free cash flow: $58,000
1. Net cash provided by (used in) investing activities: $-258,000
Net cash provided by (used in) investing activities reflects the cash flows associated with the purchase or sale of long-term assets. In this case, Arnold Industries paid $152,000 for equipment purchases and $106,000 for intangible assets. Therefore, the net cash used in investing activities can be calculated as the sum of these two amounts:
Net cash provided by (used in) investing activities = Cash paid for equipment purchases + Cash paid for intangible assets
= $152,000 + $106,000
= $258,000 (negative because it represents cash used)
2. Net cash provided by (used in) financing activities: $-3,400
Net cash provided by (used in) financing activities represents the cash flows associated with obtaining or repaying capital from various financing sources. In this case, Arnold Industries received $34,000 from stock issuance and paid $37,000 on a bank loan. Additionally, $42,400 was paid as dividends. To calculate the net cash provided by (used in) financing activities, we sum up these amounts:
Net cash provided by (used in) financing activities = Cash received from stock issuance + Cash paid on bank loan + Cash paid for dividends
= $34,000 + (-$37,000) + (-$42,400)
= $-3,400 (negative because it represents cash used)
3. Ending cash: $126,400
To calculate the ending cash balance, we need to consider the initial cash balance, net cash provided by operating activities, net cash provided by (used in) investing activities, and net cash provided by (used in) financing activities. We can calculate the ending cash balance using the following formula:
Ending cash = Initial cash + Net cash provided by operating activities + Net cash provided by (used in) investing activities + Net cash provided by (used in) financing activities
= $104,800 + $210,000 + (-$258,000) + (-$3,400)
= $126,400
4. Free cash flow: $58,000
Free cash flow represents the cash generated by a company's operations that is available for discretionary purposes, such as reinvestment in the business, debt repayment, or distribution to shareholders. It is calculated by subtracting capital expenditures (equipment purchases) from net cash provided by operating activities. In this case, the calculation would be as follows:
Free cash flow = Net cash provided by operating activities - Cash paid for equipment purchases
= $210,000 - $152,000
= $58,000
Therefore, Arnold Industries had a free cash flow of $58,000.
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Which of the following statements, regarding notes receivable, is incorrect? O Notes receivable are sometimes called promissory notes O A notes receivable is a written promise that a customer will pay a fixed amount of principal plus interest by a certain date in the future. O All notes receivable are considered long-term assets O Notes receivable usually have longer terms than accounts receivable.
The incorrect statement regarding notes receivable is that all notes receivable are considered long-term assets.
Notes receivable are written promises from customers to pay a fixed amount of principal plus interest by a specific future date. While it is true that notes receivable are sometimes called promissory notes and that they usually have longer terms than accounts receivable, not all notes receivable are considered long-term assets.
Notes receivable can be classified as either short-term or long-term assets depending on their maturity date. Short-term notes receivable are due within one year or the operating cycle of the company, whichever is longer.
These are considered current assets. On the other hand, long-term notes receivable have a maturity date beyond one year or the operating cycle, and these are classified as long-term assets.So, the incorrect statement in this case is that all notes receivable are considered long-term assets. Some notes receivable may have shorter terms and would be classified as short-term assets.
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In January 2006, Los Angeles-based Hilton Hotels Corpration annourwed that ffe company was
introducing a new luxury hotel line named the Waldorf Astoria Collection. Five weeks later, the company
announced that it finalized its acquisition of the lodging assets of British company Hilton Group plc
(Hilton Group) including its operating subsidiary, Hilton Intemational Co. Then in September in Moscow,
Hilton Hotels Corporation signed a long-term franchise agreement with Russian joint stock company
Sadko Hotel as franchisee. Also included in the agreement was the American company Interstate
Management Services, Inc. as the hotel operator for its first hotel, the upscale Hilton Moscow
Leningradskaya.
These and other developments enabled the company's leadership to announce, "In all,
2006 was quite a year, one of the most exciting and productive ever for Hilton Hotels Corporation. We hit
the ground running with the Hilton International acquisition, kept our eye on our strategic and
made significant progress toward all of our strategic goals." I
These events were important not only for Hilton Hotels Corporation, but reflected the expansion processes
in the global hotel industry as a whole. During the rise of in the hotel industry,
companies such as Hilton Hotels Corporation were in of finding new markets and setting
priorities.
In January 2006, Hilton Hotels Corporation announced the introduction of a new luxury hotel line called the Waldorf Astoria Collection. Shortly after, the company finalized the acquisition of the lodging assets.
Hilton Group plc, including Hilton International Co. This acquisition expanded Hilton Hotels Corporation's presence and assets.
In September of the same year, Hilton Hotels Corporation signed a franchise agreement with Sadko Hotel, a Russian joint-stock company, to establish its first hotel in Moscow, the Hilton Moscow Leningradskaya. The agreement also involved Interstate Management Services, Inc., an American company, as the hotel operator.
These developments were significant for Hilton Hotels Corporation and reflected the overall expansion happening in the global hotel industry. Companies like Hilton Hotels Corporation were actively seeking new markets and setting strategic goals to capitalize on the industry's growth. The year 2006 was described as one of the most exciting and productive for Hilton Hotels Corporation, as they made progress towards their strategic objectives.
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QS 14-15 (Algo) Preparing a schedule of cost of goods manufactured LOP2 Prepare the schedule of cost of goods manufactured for Barton Company using the following information for the year ended Decembe
To prepare the schedule of cost of goods manufactured for Barton Company, it is essential to have the necessary information. The cost of goods manufactured is a vital aspect of understanding the financial well-being of a business.
Schedule of cost of goods manufactured is a critical document that shows the cost of the items manufactured. For Barton Company, the cost of goods manufactured can be calculated by using the following details:
Direct materials used - $350,000
Direct labor costs - $200,000
Manufacturing overhead costs incurred - $90,000
Work-in-process inventory, beginning - $40,000
Work-in-process inventory, ending - $30,000
Finished goods inventory, beginning - $60,000
Finished goods inventory, ending - $50,000
By calculating the total manufacturing costs ($640,000) and then adjusting it with the beginning and ending work-in-progress inventory and finished goods inventory, we can derive the cost of goods manufactured.
Hence the cost of goods manufactured for Barton Company is $660,000.
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You are senior on the audit of Rexxon (Pty) Ltd, a medium sized wholesaler of stationery and supplies. All of the company's financial systems are computerized and you have been asked to assist in the
This documentation serves as a record of the work performed and is essential for reporting to the client and management.
As a senior on the audit of Rexxon (Pty) Ltd, a medium-sized wholesaler of stationery and supplies, with all of the company's financial systems computerized.
If you have been asked to assist in the preparation of an audit programme, you should do the following:
Assess the risk: First and foremost, assess the risk associated with the client and the audit, and design audit procedures to address those risks.
Understand the client: Conduct interviews with management to gain a better understanding of the client's processes, internal controls, and how they work.
Create a list of audit procedures: Based on your assessment of the risk and understanding of the client, you should create a list of audit procedures that are tailored to the client's specific circumstances.
Set up a timeline: Establish a schedule for performing the audit procedures, ensuring that they are performed in a timely and efficient manner.
Assign tasks: Assign tasks to team members as needed to ensure that all audit procedures are performed effectively.
Document your work: Document your work in an audit program, including the procedures you performed, the evidence you collected, and any findings or issues that you identified.
This documentation serves as a record of the work performed and is essential for reporting to the client and management.
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Question 10 AEC Company began Year 1 with $50.000 in Cash and Common Stock. On January 1 , Year 1 , ABC Company issued a $250,000. of 20 -year 10 s. bonds. The bonds were issued at face value. Interest is paid on December 31 each year. If this is the only activity in Year 1 which section of the Statement of Cash Flows will display a cash outflow? Financiriz Actities No section of the Statement of Cash Flows will incur an outflow. lnvesting Activities Opcrating Activitics Question 9 On March 1. Year 1. ABC Company received $40,000 cash from the issue of a two-year, 6% note. What is ABC Company's Total Liabilities for Year 1? 542,400 $40.000 $42.000 $40,400 Next
Based on the information provided, the issuance of $250,000 of 20-year 10% bonds on January 1, Year 1, at face value would result in a cash inflow in the financing activities section of the Statement of Cash Flows.
Therefore, the correct answer to Question 10 is: Financing Activities.
Based on the information provided in the question, ABC Company received $40,000 cash from the issue of a two-year, 6% note on March 1, Year 1. This means that ABC Company borrowed money by issuing a note payable. The note payable represents a liability for the company since it owes the principal amount borrowed plus interest.
To calculate the total liabilities for Year 1, we need more information. Specifically, we need to know the amount of the note payable and any other liabilities the company may have incurred throughout the year. Without that information, we cannot determine the exact total liabilities for Year 1. Therefore, none of the provided options ($542,400, $40,000, $42,000, $40,400) can be considered as the correct answer for Question 9.
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An IT firm consisting of several subsidiary units works on the development of software for alloy die casting. The firm conducts regular surveys about their own products already on the market. Recently, the managing body of the firm directed the software architects to evaluate the performance of the software application and decided to initiate a software quality improvement program by which they could enhance the quality attributes of their existing software along with up-gradation of new selling target. Hence the IT firm planned to start multi-site development at various locations for better economic reasons. A. In this context suggest by highlighting one instance that how the potentiality of scalability for this multi-site development approach of the newly developed product can be impacted in a positive and negative manner. (2+2=4) B. In this context suggest by highlighting one instance that how the potentiality of performance for this multi-site development approach of the newly developed product can be impacted in a positive and negative manner.
Scalability is defined as a characteristic of software application or system which allows it to handle an increased amount of work by adding resources.
For this multi-site development approach of the newly developed product, the potentiality of scalability can be impacted in a positive manner because as the product is developed on different locations, there are chances of errors, bugs and lagging, but these issues can be easily identified and resolved on-site basis. On the other hand, the potentiality of scalability can be impacted negatively if the development of software application at various locations does not have a proper communication and collaboration system among them which can lead to inconsistency in product development and finally to production of non-uniform software products which can lead to a negative impact on the scalability of the product.
The potentiality of performance for this multi-site development approach of the newly developed product can be impacted positively because with multi-site development, there is an availability of ample resources for the development team, including enhanced human resources, testing, and feedback cycles that allow the development team to concentrate more on product quality and less on distribution costs. Additionally, multi-site development helps to increase the innovation, speed, and the overall quality of the software product. The downside to this approach is that if the communication and collaboration among the different locations and teams are poor, it could impact the performance negatively. It can lead to conflicts, misunderstandings, duplication of work, and problems with achieving uniformity in the software products. These issues will ultimately result in a negative impact on the product's performance.
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