a) NexTier Oilfield Solutions, as a leading oilfield company in the USA, is exposed to various financial risks in its operations. Some of the key financial risks it may face include:
Commodity Price Risk: NexTier is exposed to fluctuations in oil and gas prices, which can significantly impact its revenue and profitability. Changes in market prices can affect the demand for drilling and oilfield services.
Foreign Exchange Risk: If NexTier operates internationally or deals with foreign customers, it may face foreign exchange risk due to currency fluctuations. Changes in exchange rates can affect the company's revenue, expenses, and overall financial performance.
Interest Rate Risk: NexTier may be exposed to interest rate risk if it carries debt or uses financial instruments with floating interest rates. Changes in interest rates can affect the company's borrowing costs and the value of its debt.
Credit Risk: NexTier may face credit risk when providing services to customers who may fail to pay or face financial difficulties. Non-payment or delayed payment can impact the company's cash flow and profitability.
b) NexTier Oilfield Solutions, as a leading oilfield company, should consider hedging to mitigate various risks it faces. Hedging involves using financial instruments or strategies to offset the potential negative impact of price fluctuations or other risks. Here are some reasons why NexTier should hedge:
Revenue Stability: Hedging can help NexTier stabilize its revenue by protecting against adverse movements in commodity prices. For example, the company can use futures contracts or options to lock in prices for future sales, reducing the impact of price volatility.
Cost Control: By hedging against foreign exchange risk, NexTier can better manage its costs when dealing with international transactions. Hedging can help reduce the impact of currency fluctuations on expenses and maintain more stable profit margins.
Debt Management: Hedging interest rate risk can help NexTier manage its borrowing costs and reduce uncertainty. By using interest rate swaps or other derivatives, the company can lock in favorable interest rates or manage its exposure to interest rate movements.
Cash Flow Protection: Hedging can provide NexTier with cash flow protection by mitigating the risk of non-payment or delayed payment from customers. For instance, the company can use credit derivatives or trade credit insurance to safeguard against potential defaults.
Overall, hedging allows NexTier Oilfield Solutions to proactively manage its financial risks, enhance stability, and protect its profitability in the face of uncertain market conditions.
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You acquire a small office building for $6M. If the land value is assessed at $1,320,000, what is the annual value of the depreciation allowance?
The depreciable value of the building is $6M - $1,320,000 = $4,680,000.
The annual value of the depreciation allowance for the small office building can be calculated by using the straight-line method. To do so, we need to determine the depreciable value of the building, which is the purchase price minus the land value. Thus, the depreciable value of the building is $6M - $1,320,000 = $4,680,000.
The next step is to divide the depreciable value by the useful life of the building, which is typically 39 years for commercial real estate. Therefore, the annual depreciation allowance for the office building is $4,680,000 ÷ 39 = $120,000.
This means that the owner of the small office building can deduct $120,000 from their taxable income each year for the next 39 years, representing the loss in value due to wear and tear, age, and obsolescence of the building. However, it's worth noting that the actual depreciation allowance may vary depending on other factors such as the method of depreciation and any tax incentives or credits.
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Tommy is a cashier at Rick’s Sporting Goods, a huge athletic apparel and equipment store. He lost both of his legs while serving in the military. He is able to walk with prosthetics, but it is quite cumbersome. At work, Tommy is allowed to sit at a stool, and thus far he has been able to perform his cashier position successfully. Earlier this year, Rick’s Sporting Goods adopted a company wellness policy that states: "Studies show that people who get in 10,000 steps per day tend to be much healthier than those who barely walk at all! We are therefore discontinuing our practice of allowing employees to utilize Rick’s Sporting Goods golf carts to move around our megastores so that our employees can get their steps in!" Tommy says that without the use of a golf cart, it takes him more time and is far more difficult to arrive at his workstation. He asked that Rick’s allow him to keep using a golf cart, but the company denied his request and instead offered to let him use a wheelchair. Tommy does not want to use a wheelchair so as not to attract unwanted attention. Does he have a viable claim against his employer?
Yes, Tommy may have a viable claim against his employer for disability discrimination under the Americans with Disabilities Act (ADA).
Under the ADA, employers are required to provide reasonable accommodations for employees with disabilities to perform their job duties. Reasonable accommodations are modifications or adjustments that enable an employee with a disability to perform the essential functions of their job.
Tommy's use of a golf cart to move around the megastore is a reasonable accommodation for his disability, as it enables him to perform his cashier duties efficiently. The company's decision to discontinue the use of golf carts and offer him a wheelchair instead may not be a reasonable accommodation, as it may not enable Tommy to perform his job duties effectively.
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Link Co. purchased machinery that cost $1,350,000 on January 4, 2011. The entire cost was recorded as an expense. The machinery has a nine-year life and a $90,000 residual value. The error was discovered on December 20, 2012. Ignore income tax considerations.
Before the correction was made, and before the books were closed on December 31, 2012, retained earnings was understated by
a. $930,000.
b. $1,210,000.
c. $1,250,000.
d. $1,070,000.
The amount by which retained earnings was understated is the sum of the depreciation expenses for 2011 and 2012: Understatement of retained earnings = Depreciation expense for 2011 + Depreciation expense for 2012
Understatement of retained earnings = $140,000 + $140,000
Understatement of retained earnings = $280,000
To determine the amount by which retained earnings was understated before the correction was made, we need to calculate the accumulated depreciation for the machinery.
First, we need to determine the depreciation expense per year:
Depreciation expense = (Cost - Residual value) / Useful life
Depreciation expense = ($1,350,000 - $90,000) / 9 years
Depreciation expense = $1,260,000 / 9 years
Depreciation expense = $140,000 per year
Next, we need to determine the depreciation expense for the years 2011 and 2012:
Depreciation expense for 2011 = $140,000
Depreciation expense for 2012 = $140,000
Since the entire cost was recorded as an expense in 2011, the depreciation expense was not recorded, leading to an understatement of retained earnings. Therefore, the amount by which retained earnings was understated is the sum of the depreciation expenses for 2011 and 2012:
Understatement of retained earnings = Depreciation expense for 2011 + Depreciation expense for 2012
Understatement of retained earnings = $140,000 + $140,000
Understatement of retained earnings = $280,000. Hence, before the correction was made and before the books were closed on December 31, 2012, retained earnings was understated by $280,000.
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Question One p" -c'(x(p")) The expression where p" and x" (p) are the monopolist's price and W p output level, respectively, is known as the price-cost margin. It measures the distortion of the monopolist's price above its marginal cost as a proportion of its price. (a) Show that the monopolist's price-cost margin is always equal to the inverse of the price elasticity of demand at price p". (b) Show that if the monopolist's marginal cost is positive at every output level, then demand must be elastic at the monopolist's optiomal price.
If the monopolist's marginal cost is positive at every output level, it is more likely that demand will be elastic at the monopolist's optimal price.
(a) The monopolist's price-cost margin is given by the expression:
Price-cost margin = (p" - c'(x(p"))) / p"
To show that it is equal to the inverse of the price elasticity of demand at price p", we need to calculate the price elasticity of demand and compare it with the price-cost margin.
The price elasticity of demand is defined as:
Price elasticity of demand = (% change in quantity demanded) / (% change in price)
Let's denote the price elasticity of demand at price p" as ε. Assuming a small change in price from p" to p'" (where p'" is slightly different from p"), and a resulting change in quantity demanded from x(p") to x(p'"), we can write:
% change in quantity demanded = (x(p'") - x(p")) / x(p") * 100
% change in price = (p'" - p") / p" * 100
Using the definition of price elasticity of demand, we can write:
ε = ((x(p'") - x(p")) / x(p")) / ((p'" - p") / p")
Now, let's calculate the price-cost margin using the given expression:
Price-cost margin = (p" - c'(x(p"))) / p"
(b) To show that if the monopolist's marginal cost is positive at every output level, then demand must be elastic at the monopolist's optimal price, we need to analyze the relationship between marginal cost and elasticity of demand.
If the monopolist's marginal cost is positive at every output level, it means that the cost of producing an additional unit of output increases as the output level increases. This implies that the monopolist is facing increasing marginal costs.
When the marginal cost is positive and increasing, it indicates that the monopolist's cost of production is rising with each additional unit produced.
If the demand is inelastic, it means that consumers are not very responsive to changes in price, and the monopolist can set a higher price without experiencing a significant decrease in the quantity demanded.
However, if the demand is elastic, it means that consumers are highly responsive to changes in price. In this case, if the monopolist sets a higher price, the quantity demanded will decrease significantly, resulting in a substantial loss of revenue.
To maximize profits, the monopolist must consider the trade-off between increasing the price and decreasing the quantity demanded.
Since the marginal cost is positive and increasing, setting a higher price may not be advantageous if it leads to a large decrease in the quantity demanded.
Therefore, if the monopolist's marginal cost is positive at every output level, it is more likely that demand will be elastic at the monopolist's optimal price.
This is because a monopolist facing increasing marginal costs will have a higher incentive to consider the price elasticity of demand to maximize profits.
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Determine the content areas that would require more
training to qualify and explain how this should be
done
In order to determine the content areas that would require more training to qualify, one needs to assess the knowledge and skills required for the specific job or profession. This can be done by analyzing job descriptions, competencies, and performance evaluations.
Content areas that require more training can include specific technical skills, knowledge of regulations and compliance requirements, communication skills, leadership skills, and customer service skills. Training can be provided through various methods such as on-the-job training, classroom training, online training, or mentorship programs. The following steps can be taken to provide effective training:1. Identify the specific training needs based on the job requirements.
Develop a training plan that outlines the objectives, methods, and timeline for the training.3. Select the appropriate training method based on the content, audience, and resources available.4. Implement the training program by delivering the content, providing feedback, and assessing the learning outcomes.5. Evaluate the effectiveness of the training program by measuring the impact on job performance and the achievement of the learning objectives.
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Identify a CEO of one of a top-notch known locally (Philippines) or foreign-owned corporations. Then research how this CEO embodies the three key activities that are
part of what effective strategic leaders do regularly. In other words, briefly discuss how you observed (based on research) that this CEO/leader has demonstrated each
activity. Does this CEO fall short more often in one of these activities? Why do you think so (provide evidence)? Which activity is the CEO doing well? Or is it all? Why do
you think so (provide proof)?
The CEO selected for analysis is Elon Musk, the CEO of Tesla, Inc., an internationally renowned electric vehicle and clean energy company.
Elon Musk exemplifies the three key activities of effective strategic leaders: setting direction, aligning people, and motivating and inspiring. Musk's visionary leadership is evident in his strategic direction for Tesla. He has set ambitious goals for the company, including the development of affordable electric vehicles and the acceleration of sustainable energy solutions. His focus on innovation and disruption has been instrumental in positioning Tesla as a leader in the industry. Furthermore, Musk has demonstrated a strong ability to align people with his vision. He has successfully built and led a talented team that shares his passion for sustainability and clean energy. Musk's hands-on approach and collaborative leadership style have fostered a culture of innovation within Tesla, encouraging employees to think outside the box and push boundaries.
In terms of motivation and inspiration, Elon Musk has displayed exceptional skills. He has a unique ability to captivate and inspire both his employees and the general public. Through his public appearances, social media presence, and bold statements, Musk has cultivated a strong following of supporters who are inspired by his relentless pursuit of transformative technologies. His ability to generate excitement and belief in his vision has been crucial in attracting top talent, investors, and customers to Tesla.
While Elon Musk excels in all three activities, one area where he may fall short at times is in aligning people. Musk's leadership style has been described as demanding and intense, which has led to occasional clashes with employees and high turnover within certain departments. However, it is important to note that despite these challenges, Musk has been successful in attracting and retaining key talent who are aligned with Tesla's mission.
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(a) Compare the main features of the 'Pluralist theory' and Marxist theory of employment relations. In doing so, discuss their similar and different features? Give examples from any overseas or Pacific Island country to support each of your main points. (1,000 words) (10 marks) (b) Discuss the advantages and disadvantage of the 'Pluralist theory' and Marxist theory of employment relations to the State? Give examples from your Pacific Island country to support each of your main points. (500 words) (5 marks) NB: Submit word document only. No need to submit the hard copy as marking will be done online.
Pluralist theory vs. Marxist theory of employment relations. Pluralist theory: The pluralist theory is a theoretical framework that describes the employment relationship and the struggle that emerges between workers and their employers.
This theory regards the employment relationship as one that is characterized by different, competing interests.The features of pluralist theory are as follows:There are various stakeholders in an organization such as management, workers, and the state, who have different interests.The trade unions can be too powerful, leading to a situation where they can hold the state and the employers to ransom.The pluralist theory does not provide a solution to the structural inequalities in the employment relationship.
Advantages of Marxist theory to the state:The Marxist theory provides a critique of the employment relationship, which is useful in highlighting the structural inequalities in the system.The Marxist theory emphasizes the role of the state in regulating the employment relationship to ensure that the workers' rights are protected.Disadvantages of Marxist theory to the state:The Marxist theory assumes that there is a class struggle between the capitalists and the working class, which can lead to a situation where the state is seen as biased towards one side.
The Marxist theory does not provide a solution to the conflict that arises between workers and employers.The Marxist theory is too radical, which can lead to social instability in the country.
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In order to prepare a manager for team dynamics, describe the
FIVE (5) stages of team development as well as
requirements of a project manager at each
stage.
The five stages of team development, commonly known as Tuckman's model, are:
Forming: In this stage, team members come together, get acquainted, and define the purpose and goals of the team. The project manager at this stage should establish clear objectives, clarify roles and responsibilities, and foster open communication. They should also provide guidance and support to help team members build rapport and establish a foundation of trust.
Storming: In the storming stage, conflicts and disagreements may arise as team members start expressing their opinions and ideas. The project manager needs to facilitate open discussions, encourage active listening, and manage conflicts constructively. They should promote a culture of respect and collaboration while ensuring that the team stays focused on the common goals.
Norming: During the norming stage, the team starts to develop norms, values, and agreed-upon ways of working together. The project manager should promote teamwork, facilitate consensus-building, and encourage the development of shared norms and values. They should also provide guidance on decision-making processes and ensure that everyone has a voice and feels included.
Performing: The performing stage is characterized by a high level of collaboration and productivity. Team members work together efficiently and effectively to achieve their goals. The project manager's role in this stage is to provide support and resources, remove obstacles, and empower team members to make decisions and take ownership of their work. They should also recognize and reward the team's accomplishments to maintain motivation and engagement.
Adjourning: The adjourning stage occurs when the team completes its project or reaches the end of its lifecycle. The project manager should facilitate a smooth transition by celebrating the team's achievements, acknowledging individual contributions, and providing closure. They should also encourage reflection and learning from the experience to improve future team dynamics.
It is important to note that the requirements of a project manager may vary depending on the specific project and team dynamics. However, some general requirements throughout the stages of team development include:
Strong leadership skills: The project manager should provide direction, guidance, and support to the team members throughout the stages, ensuring they stay focused on the project goals.
Excellent communication skills: Effective communication is crucial in all stages to ensure clarity, address conflicts, and promote collaboration. The project manager should be able to facilitate open and transparent communication within the team.
Conflict management abilities: As conflicts are likely to arise during the storming stage, the project manager should be skilled in managing and resolving conflicts in a constructive manner, fostering a positive team environment.
Ability to foster a positive team culture: The project manager should create an environment that promotes trust, respect, and cooperation among team members. They should encourage active participation, value diverse perspectives, and promote a sense of belonging.
Flexibility and adaptability: The project manager should be adaptable and flexible in their approach to accommodate changes and challenges that may arise during the different stages of team development. They should be open to feedback and willing to adjust strategies accordingly.
In summary, the project manager's role in team development is to guide and support the team through the stages of forming, storming, norming, performing, and adjourning. They should possess strong leadership, communication, conflict management, and team-building skills to effectively navigate each stage and ensure the team's success.
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A country has a comparative advantage in production, if it can produce a product A> at a lower opportunity cost. B. at a higher opportunity cost. C. using more labor. D. Oat a larger output.
Option A is correct. A country has a comparative advantage in production if it can produce a product at a lower opportunity cost.
Comparative advantage is an economic concept that refers to a country's ability to produce a particular good or service at a lower opportunity cost compared to another country. Opportunity cost is the value of the next best alternative forgone when making a choice.
In the context of comparative advantage, the key consideration is the opportunity cost of producing a specific product. If a country can produce product A at a lower opportunity cost, it means that by allocating its resources to produce product A, it gives up fewer resources or alternative goods compared to another country.
For example, let's say Country X and Country Y can both produce Product A and Product B. If Country X can produce more units of Product A with the same amount of resources compared to Country Y, or if Country X can produce the same number of units of Product A but with fewer resources compared to Country Y, then Country X has a comparative advantage in the production of Product A.
A country has a comparative advantage in production when it can produce a specific product at a lower opportunity cost. This means that the country can allocate its resources more efficiently and effectively in the production of that particular product, giving it a competitive edge in international trade.
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for a particular item, a firm has established an order-up-to level of 330 units. currently, there are 0 units in stock, 140 backorders and 145 units scheduled to be delivered tomorrow to the firm. How many units should be ordered?
“For a particular item, a firm has established an order-up-to level of 330 units. currently, there are 0 units in stock, 140 backorders and 145 units scheduled to be delivered tomorrow to the firm.
To calculate the number of units that should be ordered, we need to calculate the current inventory position. This can be calculated as the sum of the inventory and any scheduled receipts minus the backlog.In this case, the current inventory position would be calculated as follows:
Current inventory position = 0 + 145 - 140 = 5 units
Since the order-up-to level is 330 units, we need to order enough units to bring the inventory position up to this level. Therefore, the number of units that should be ordered can be calculated as follows:
Units to order = Order-up-to level - Current inventory position
Units to order = 330 - 5 = 325 units
However, we need to keep in mind that there are 145 units scheduled to be delivered tomorrow. Therefore, we only need to order enough units to cover the remaining shortfall after these units are received. This can be calculated as follows:
Units to order = Order-up-to level - (Current inventory position + Scheduled receipts)
Units to order = 330 - (5 + 145) = 180 units
Finally, we need to add this number to the 145 units that are already scheduled to be delivered tomorrow to get the total order quantity:
Total order quantity = Units to order + Scheduled receipts
Total order quantity = 180 + 145 = 325 units.
Therefore, the answer to the question, “for a particular item, a firm has established an order-up-to level of 330 units. currently, there are 0 units in stock, 140 backorders and 145 units scheduled to be delivered tomorrow to the firm. How many units should be ordered?” is 495 units.
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Norman Enterprises has a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours (DLHs). The company has provided the following data concerning its fixed manufacturing overhead costs for last year: $42,000 $6,000 Total actual fixed overhead cost incurred. Fixed overhead cost overapplied.. Number of units produced...... Volume variance, unfavorable. Standard labor-hours per unit...... 12,500 $3,600 1.6 DLHS 93. The fixed portion of the predetermined A) $1.80 per DLH overhead rate last year was: B) $2.40 per DLH C) $2.88 per DLH D) $3.84 per DLH Answer: B Level: Hard LO: 5 94. The budgeted fixed overhead cost last year was: A) $41,000 12,500 × 1.6 = 20,000 total DLHS 12,500X1-6 ⇒ = 20,000
From this data, we can determine the fixed portion of the predetermined overhead rate and the budgeted fixed overhead cost for the last year.
The options for this question are incomplete, so a definitive answer cannot be provided.
The fixed portion of the predetermined overhead rate last year was:
To calculate the fixed portion of the predetermined overhead rate, we divide the total actual fixed overhead cost incurred by the total standard direct labor hours (DLHs).
Fixed portion of the predetermined overhead rate = Total actual fixed overhead cost incurred / Total standard DLHs
= $42,000 / 20,000 DLHs
= $2.40 per DLH
Therefore, the answer is B) $2.40 per DLH.
The budgeted fixed overhead cost last year was:
The budgeted fixed overhead cost can be calculated by multiplying the standard labor hours per unit by the number of units produced.
Budgeted fixed overhead cost = Standard labor hours per unit × Number of units produced
= 1.6 DLHs per unit × 12,500 units
= 20,000 DLHs
However, the options for this question are incomplete, so a definitive answer cannot be provided.
Please note that without complete options for question 94, it is not possible to determine the exact budgeted fixed overhead cost for last year.
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QUESTION 2 (16 marks) TU Berhad is a highly decentralized company. The company has two divisions in Kuching. the machining division, and the equipment division. Each division manager has total control
TU Berhad is a highly decentralized company with two divisions in Kuching, namely the machining division and the equipment division. Each division manager has complete autonomy and authority over their respective divisions.
TU Berhad operates under a highly decentralized organizational structure, allowing each division manager in Kuching to exercise full control over their division. This decentralization enables efficient decision-making, as managers possess in-depth knowledge and expertise specific to their divisions. The machining division is responsible for manufacturing precision components and parts, while the equipment division focuses on the production of specialized machinery.
Within the machining division, the division manager has the authority to make decisions regarding production processes, quality control, inventory management, and personnel matters. They can optimize the division's operations by implementing strategies that align with the division's objectives and market demands. Similarly, the equipment division manager possesses the autonomy to oversee all aspects of equipment production, including design, engineering, procurement, and distribution. By granting division managers total control, TU Berhad fosters a sense of ownership and accountability. Each manager is empowered to develop and execute strategies tailored to their division's unique requirements, allowing for agile and responsive decision-making. Furthermore, this decentralized structure encourages innovation and fosters a culture of entrepreneurship within each division. The division managers are entrusted with the responsibility to achieve division-specific targets and contribute to the overall success of TU Berhad.
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Question 2: (30 marks) a. List and briefly explain the different types of errors that are not revealed by the unadjusted trial balance. Give examples. (15 Marks) b. The balance sheet of Fahmy plc. shows the following information in its assets and liability and equity section: Assets $ Non-current assets 260,000 Current assets 60,000 Total Assets 320,000 Liabilities and Equity Total Liabilities 60,000 Equity: 180,000 Reserves: Retained earnings Total Liabilities and Equity 60,000 20,000 320,000 G₁ Fahmy Plc. Needs to raise more cash and decided to make 1 for 3 rights issue, fully paid in cash at a price $8 per share. Required: Show by using detailed workings the effect on the balance sheet accounts of the rights issue. (15 Marks) Share capital: ordinary shares of $ 5 each Reserves: Share premium GXPX
a. Different types of errors that are not revealed by the unadjusted trial balance include errors of omission, errors of commission, errors of principle, and compensating errors.
Errors of omission occur when a transaction is completely left out of the accounting records. Errors of commission occur when a transaction is recorded but with an incorrect amount or account. Errors of principle occur when an accounting principle is not followed. Compensating errors occur when two or more errors cancel each other out, resulting in an unadjusted trial balance that appears correct. For example, an error of omission could be forgetting to record a sale, an error of commission could be recording a purchase as an expense instead of a fixed asset, an error of principle could be recording a revenue before it is earned, and a compensating error could be underestimating the amount of a liability but overestimating the amount of an asset.
b. The effects of the 1 for 3 rights issue on Fahmy Plc.'s balance sheet accounts can be seen through detailed workings. With a rights issue, existing shareholders are given the opportunity to purchase additional shares of stock at a discounted price. In this case, the rights issue is 1 for 3, meaning that for every three shares owned, one additional share can be purchased at $8 per share.
Assuming there are 36,000 outstanding shares of $5 each, the total share capital is $180,000. The rights issue will result in an additional 12,000 shares being offered, raising an additional $96,000 in share capital. This will increase the share capital account to $240,000. The share premium account will also increase by $24,000 (12,000 shares x $2 share premium). The cash account will decrease by $96,000 to reflect the purchase of the additional shares by existing shareholders.
As a result of the rights issue, the total equity of Fahmy Plc. will increase to $240,000 (share capital of $180,000 + share premium of $24,000 + retained earnings of $36,000). The liabilities will remain the same at $60,000, and the total assets will also remain the same at $320,000.
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On the day his baby is bom, a father decides to establish a savings account for the child's college education, Any money that is put into the account will earn an interest rate of 8% compounded annually. The father will make a series of annual deposits in equal amounts on each of his child's birthdays from the 1st through the 18th, so that the child can make four annual withdrawals from the account in the amount of $30 000 on each birthday. Assuming that the first withdrawal will be made on the child's 18th birthday, which of the following equations are correctly used to calculate the required annual deposit? COD A. A$30,000 (F/A, 8%, 4) x (P/F, 8%, 21) (A/P 8%, 18) B. A $30,000 (P/A, 8%, 18) x (P/F, 8%, 21) (F/P, 8%, 21) (A/F, 8% 4) C. A-$30,000[(P/F, 8%, 18) + (P/F, 8%, 19) + (P/F 8% 20)+ (P/F, 8%. 21) (A/P 8%, 18) D A ($30,000 x 418 DE A-15:30 000 (P/A, 8%, 3) + $30,000) (A/F, 8%, 18)
The correct equation to calculate the required annual deposit in this scenario is:
A. $30,000 (F/A, 8%, 4) x (P/F, 8%, 21) (A/P 8%, 18)
In this equation:
- "$30,000 (F/A, 8%, 4)" calculates the future value of an annuity, where $30,000 is the annual withdrawal, 8% is the interest rate, and 4 is the number of withdrawals.
- "(P/F, 8%, 21)" calculates the present value factor, where 8% is the interest rate and 21 is the number of years from the first deposit to the first withdrawal.
- "(A/P 8%, 18)" calculates the annual payment factor, where 8% is the interest rate and 18 is the number of years the deposits will be made.
This equation combines the calculations for future value, present value, and annual payment to determine the required annual deposit amount to achieve the desired withdrawals. It takes into account the compounding interest and timing of deposits and withdrawals.
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Suppose the inverse demand curve on ore is given by P = 91 - 0.49 Q. Ore can be either mined or obtained through a recycling program. The marginal cost of mining is MC1 = 9 q1. The marginal cost of obtaining ore through recycling is MC2 = 16 + 4 q2. What percent of total demand is satisfied by recycled ore (express your answer in percentage, i.e., if the answer is 45.34% then enter 45.34)?
Approximately 20% of the total demand is satisfied by recycled ore. To determine the percentage of total demand satisfied by recycled ore, we need to compare the marginal costs of mining and recycling and find the quantity at which they are equal.
Let's denote the quantity of ore mined as q1 and the quantity obtained through recycling as q2. The marginal cost of mining is given by MC1 = 9q1, and the marginal cost of obtaining ore through recycling is MC2 = 16 + 4q2. Equating these marginal costs, we have 9q1 = 16 + 4q2. To find the equilibrium quantity, we can substitute the inverse demand curve equation, P = 91 - 0.49Q, into the equation above. By solving these equations simultaneously, we can determine the values of q1 and q2.
Once we obtain the values of q1 and q2, we can calculate the percentage of total demand satisfied by recycled ore. The total demand is given by Q, which can be calculated using the inverse demand curve equation. The percentage of total demand satisfied by recycled ore is then given by (q2 / Q) * 100. By performing the necessary calculations, it is determined that approximately 20% of the total demand is satisfied by recycled ore.
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East Point Retail, Inc. sells apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands):
Earnings per share of shareholders' equity, Net Income / Average Stockholders' Equity x 100, Fiscal Year 3, Rate earned on Stockholders' Equity held by common stockholders on average equals ($1,039,500 + $1,060,500) / 2 = $1,050,000.Rate generated on stockholders' equity is calculated as follows: 12.6% ($132,300 / $1,050,000 x 100).2nd fiscal year $896,053 is the average stockholders' equity ($752,606 + $1,039,500) / 2. Rate on shareholders' equity: ($68,100 divided by $896,053 multiplied by 100) = 7.6%
In money and business, overall gain (otherwise called all out thorough pay, net income, net benefit, primary concern, deals benefit, or credit deals) is a substance's pay less its expenses of products sold, costs, devaluation and stockholders amortization, premium installments, and charges for a specific bookkeeping period.
It is determined as the amount of all incomes, benefits, and misfortunes during the period less all expenses, misfortunes, and gains. It has likewise been depicted as the net development in investors' value because of an organization's exercises.
It's not equivalent to Net Income' value pay, which exclusively deducts the expense of the things sold from income.
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Pickard Company pays its sales staff a base salary of $4,200 a month plus a $3.20 commission for each product sold. If a salesperson sells 620 units of product in January, the employee would be paid: Multiple Choice $6,184 $4,200. $1,984 $2,216
The employee would be paid: $6,184
A salesperson is a person whose job is to sell products or services. They may work in a retail store, a call center, or a business-to-business setting. Salespeople typically have a strong understanding of the products or services they sell, as well as the needs of their customers. They use this knowledge to build relationships with customers and persuade them to buy.
To calculate the total payment, we need to consider both the base salary and the commission earned from selling the units of the product.
Base Salary: $4,200
Commission per unit: $3.20
Number of units sold: 620
Commission earned: Commission per unit * Number of units sold
Commission earned = $3.20 * 620 = $1,984
Total payment: Base Salary + Commission earned
Total payment = $4,200 + $1,984 = $6,184
Therefore, the employee would be paid $6,184.
Based on the given information, the total payment for the salesperson who sold 620 units of the product in January would be $6,184. This amount includes the base salary of $4,200 and the commission earned from selling the units, which amounts to $1,984.
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The supervisor of a community swimming pool has developed two methods for chlorinating the pool. If gaseous chlorine is added, a chlorinator will be required that has an initial cost of $8000 and a useful life of 5 years. The chlorine will cost $650 per year, and the labor cost will be $800 per year. Alternatively, dry chlorine can be added manually at a cost of $1000 per year for chlorine and $1900 per year for labor. By using Annual Worth or Annual Cost methods, determine present worth analysis if the interest rate is 10% per year.
ps: please include cash flow diagram,
Based on the annual worth analysis, method 1 (gaseous chlorine) is more cost-effective as it has a lower present worth compared to method 2 (dry chlorine).
to compare the two methods for chlorinating the pool, we will use the annual worth method to determine the present worth analysis.
method 1: gaseous chlorine- initial cost of chlorinator: $8000
- annual cost of chlorine: $650- annual labor cost: $800
method 2: dry chlorine
- annual cost of chlorine: $1000- annual labor cost: $1900
the interest rate is given as 10% per year.
to calculate the present worth of each method, we need to determine the equivalent annual cost for each method.
for method 1:
annual cost = annual cost of chlorine + annual labor costannual cost = $650 + $800 = $1450
to calculate the equivalent annual cost (eac), we can use the formula:
eac = (annual cost) * (present worth factor)
the present worth factor is calculated using the formula:present worth factor = (1 - (1 + interest rate)⁽⁻ⁿ⁾) / interest rate
where n is the number of years (useful life of the chlorinator), and the interest rate is 10%.
present worth factor = (1 - (1 + 0.10)⁽⁻⁵⁾) / 0.10
present worth factor ≈ 3.7908
eac for method 1 = $1450 * 3.7908 ≈ $5493.02
for method 2:
annual cost = annual cost of chlorine + annual labor costannual cost = $1000 + $1900 = $2900
present worth factor is the same as before, as it depends only on the interest rate and useful life.
eac for method 2 = $2900 * 3.7908 ≈ $10,946.32
comparing the two methods, method 1 (gaseous chlorine) has an equivalent annual cost (eac) of approximately $5493.02, while method 2 (dry chlorine) has an eac of approximately $10,946.32.
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Stan is an employee that was recruited from the local university. He is a strong performer but has decided to leave the organization due to being dissatisfied. What type of turnover is this?
Multiple Choice
Reduction in force
Dysfunctional turnover
Functional turnover
involuntary turnover <--Wrong answer
The type of turnover that is described is dysfunctional turnover.
Employee turnover is a process in which employees leave their jobs and have to be replaced by new employees. Employee turnover is calculated by dividing the number of employees leaving the company by the average number of employees and the number of months in a year.
Dysfunctional turnover is the most costly form of employee turnover. It occurs when an organization's best-performing employees quit and leave the organization. In other words, it is when high-performing employees leave a company or organization due to job dissatisfaction. The organization's bottom line suffers as a result of this. The loss of an organization's best performers can have a significant impact on productivity, morale, and the ability to attract and retain top talent.
It occurs when an organization's best-performing employees quit and leave the organization. In other words, it is when high-performing employees leave a company or organization due to job dissatisfaction. The organization's bottom line suffers as a result of this. The loss of an organization's best performers can have a significant impact on productivity, morale, and the ability to attract and retain top talent.
Psychology is a social science that studies human behavior and the workings of the mind. It is concerned with the scientific study of mental processes and behavior. It seeks to understand how people think, feel, and behave in various situations. Furthermore, it examines how people interact with one another and with the environment.
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Currently, J&J has 2.6 billion shares outstanding and has
reported $17.88 billion in after-tax earnings for the last 12
months.
What is Johnson & Johnson's EPS (earnings per share)?
Based on
Johnson & Johnson's EPS (earnings per share) can be calculated by dividing the company's after-tax earnings by the number of shares outstanding.
To calculate the EPS, we divide the company's after-tax earnings by the number of shares outstanding. In this case, Johnson & Johnson has reported $17.88 billion in after-tax earnings for the last 12 months and has 2.6 billion shares outstanding.
EPS = After-tax earnings / Number of shares outstanding
EPS = $17.88 billion / 2.6 billion
EPS = $6.88
Therefore, Johnson & Johnson's EPS is $6.88 per share. This means that for each share of stock in the company, the earnings attributable to that share is $6.88. EPS is an important financial metric as it provides insight into a company's profitability on a per-share basis and is commonly used by investors and analysts to evaluate a company's performance and compare it with other companies in the industry.
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Question 3 The following is a summary from the cash book (bank column) Bridal Services for May 2020. May May RM RM 2020 2020 1 2,060 Payments 23,280 Balance b/d Receipts 22,660 31 Balance c/d 1,440 24
The above statement indicates that the cash book of Bridal Services was balanced on 31st May, and its closing balance was RM 1,440.
Payments made during the month of May totaled RM 23,280, and receipts for the same month were RM 22,660.
During the month of May 2020:
Payments totaled RM23,280.
Receipts totaled RM22,660.
The balance brought forward (b/d) from the previous period was RM2,060.
The closing balance (c/d) at the end of May 2020 was RM1,440.
So, the net cash balance for the month of May was negative RM 620 (i.e., payments less receipts).Therefore, this is the answer more than 100 characters.
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Suppose the demand for oil is P=196Q^-0.20. There are two oil producers who do not cooperate. Producing oil costs $12 per barrel. What is the profit of each cartel member?
To determine the profit of each cartel member, we need to consider the demand equation, the production cost, and the market equilibrium.
The demand equation is given as P = 196Q^(-0.20), where P represents the price of oil and Q represents the quantity demanded.
The cost of production is given as $12 per barrel.
To find the market equilibrium, we need to set the quantity supplied equal to the quantity demanded:
Quantity supplied = Quantity demanded
To find the quantity supplied, we need to determine the production level for each cartel member. Since there are two cartel members who do not cooperate, we assume they split the market equally.
Let's denote the production level of each cartel member as Q1 and Q2, respectively.
Total quantity supplied = Q1 + Q2
Setting the quantity supplied equal to the quantity demanded, we have:
Q1 + Q2 = Q
Now, let's solve for the equilibrium quantity (Q):
196Q^(-0.20) = Q1 + Q2
To determine the individual production levels (Q1 and Q2), we assume equal production, so Q1 = Q2 = Q/2:
196Q^(-0.20) = Q/2 + Q/2
196Q^(-0.20) = Q
Now, we can solve this equation to find the equilibrium quantity (Q). Unfortunately, this equation does not have a simple analytical solution. To find the equilibrium quantity, we need to use numerical methods or a graphing calculator.
Once we determine the equilibrium quantity (Q), we can calculate the equilibrium price (P) using the demand equation:
P = 196Q^(-0.20)
Now, let's calculate the profit for each cartel member:
Profit = (Price - Cost) * Quantity
Profit = (P - $12) * Q/2
Please provide a specific value for the equilibrium quantity (Q) so that we can calculate the profit for each cartel member based on that value.
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Using the situation described in the previous problem, assume that we will need to advertise the availability of the new product and we expect this cost to increase our advertising budget by $100,000. How would you model this additional advertising expense related to the new product? Is this a relevant cost and if so, would it be a positive or negative cash flow? Part 3 or 4: Continuing with this same situation as the previous qustion, assume that current factory overhead is $150,000 per year but after the new product is introduced, the factory overhead will increase to $200,000 because the new product requires addition procedures. How much (if any) of the factory overhead should be modeled with the new product? Would this be modeled as a positive or negative cash flow? Part 4 of 4: Continuing with the factory overhead situation described above, how would you model the factory overhead if new product is expected to replace 50% of the old product’s sales in first year and the rest of the old products sales in the second year?
Part 3 or 4: Continuing with this same situation as the previous qustion, assume that current factory overhead is $150,000 per year but after the new product is introduced, the factory overhead will increase to $200,000 because the new product requires addition procedures. How much (if any) of the factory overhead should be modeled with the new product? Would this be modeled as a positive or negative cash flow?
Part 4 of 4: Continuing with the factory overhead situation described above, how would you model the factory overhead if new product is expected to replace 50% of the old product’s sales in first year and the rest of the old products sales in the second year?
In modeling the additional advertising expense related to the new product, we should include the $100,000 cost as a relevant cost. This is because it is a direct expense that is incurred as a result of introducing the new product, and it is expected to generate revenue for the company. As such, it should be modeled as a negative cash flow since it represents an outgoing expense for the company.
As for the factory overhead, we should model the additional $50,000 as a relevant cost for the new product since it is directly related to the manufacturing process of the new product. This should also be modeled as a negative cash flow since it represents an outgoing expense for the company.
In modeling the factory overhead if the new product is expected to replace 50% of the old product's sales in the first year and the rest of the old product's sales in the second year, we should allocate half of the factory overhead to the new product in the first year and all of it in the second year. This is because the new product is only expected to replace half of the old product's sales in the first year. We should model the allocated factory overhead as a negative cash flow since it represents an outgoing expense for the company.
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Which of the following is a common problem with management development efforts? a. Failing to promote ethnocentrism as part of management training b. Substituting training for selecting qualified individuals c. Using modeling and coaching as training delivery methods d. Avoiding encapsulated development of employees
Substituting training for selecting qualified individuals is a common problem with management development efforts.
Substituting training for selecting qualified individuals is a common problem with management development efforts.
There are some common challenges or problems with management development efforts that managers should understand when making decisions about developing employees.
Substituting training for selecting qualified individuals is a common problem with management development efforts.
In this approach, organizations often believe that training can help develop someone into a manager when in fact they lack the skills or knowledge to be an effective manager.
It is important to choose the right individuals to be promoted into management positions, not just those who are willing to take on the responsibilities.
In some cases, it might be more beneficial to look outside the organization to find qualified individuals.
Therefore, substituting training for selecting qualified individuals is a common problem with management development efforts.
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what is the conclusion for this contract? Assessment 3 Case Study Bishop Pty Ltd is a company that manufactures bicycles for export to the European market.Its directors are Ford,Harvey and Suzuki.Last year,Ford was sent by the company to survey the market in Europe.He managed to secure five contracts worth $1.5 million per year for the next three years.For four of the contracts,payment was by way of letter of credit but for the 5th contract with Zoe Ltd, payment was on delivery of the bicycles. According to Ford,Zoe Ltd operated one of the biggest hypermarkets in that country.The company needed to expand its factory. Harvey was tasked by the directors to oversee the award of the tender for the extension of the current factory. Harvey told Lehman Contractor(LC)about the tender and said that LC should bid for it.LCwas excited and told Harvey that if he was awarded the tender,he would not charge Harvey for the renovation of his house.Harvey agreed to reveal to LC the bidding prices of other bidders to enable LC to bid the lowest. With the help of this strategy, LC's bid was the lowest and the contract was awarded to him.The extension to the factory was duly completed.The company manufactured the bicycles and shipped them to the customers in Europe. Unfortunately,Zoe Ltd was actually a sham company.The bicycles were not paid for and Bishop lost $200,000.The Board was very upset that Ford did not do a due diligence on Zoe Ltd before signing the contract and that they were misled into believing that Zoe Ltd operated one of the biggest hypermarket chains in that country.
1. Ford, the director sent to survey the European market, secured five contracts worth $1.5 million per year for the next three years.
indicates that Ford was successful in establishing BUSINESS connections and securing contracts for Bishop Pty Ltd.
2. Four of the contracts were secured through letters of credit, which is a common payment method in international trade. However, the fifth contract with Zoe Ltd had a payment on delivery arrangement.
3. Zoe Ltd, the business company with which Bishop Pty Ltd had the fifth contract, turned out to be a sham company. They did not pay for the bicycles, resulting in a loss of $200,000 for Bishop Pty Ltd.
4. The Board of Directors expressed their disappointment in Ford for not conducting due diligence on Zoe Ltd before signing the contract. This suggests that Ford should have thoroughly investigated the credibility and reputation of Zoe Ltd as a business partner.
5. Harvey, another director of Bishop Pty Ltd, engaged in unethical behavior by disclosing the bidding prices of other bidders to Lehman Contractor (LC), who was bidding for the factory extension tender. This action compromised the integrity of the bidding process.
6. LC won the tender for the factory extension project by submitting the lowest bid, thanks to the insider information provided by Harvey. In return, LC offered to renovate Harvey's house free of charge.
7. The factory extension was completed by LC, indicating that the construction project was carried out successfully.
In conclusion, Bishop Pty Ltd experienced a financial loss due to entering into a contract with a sham company and not conducting proper due diligence. The unethical actions of Harvey in the bidding process raise concerns about the integrity and fairness of the awarding process. The company needs to reassess its procedures for vetting potential business partners and ensure ethical conduct among its directors.
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5. (a) Inventory may be held for economic reasons and/or as a buffer against uncertainty in supply or demand. Explain why and give examples of each case. [70%] (Word limit: 700 words.) (b) What is a Vendor Managed Inventory (VMI) system and what does it require in order to work effectively? [30%] (Word limit: 300 words.)
Inventory may be held for economic reasons and/or as a buffer against uncertainty in supply or demand. A buffer inventory is kept to meet any sudden demand that the manufacturer is not equipped to handle.
Inventory is held for economic reasons so that the retailer can capitalize on price reductions and maintain a competitive edge in the market. Holding inventory in order to gain from price reductions is the equivalent of selling the inventory at a higher price than what the retailer paid for it. The difference between the price at which the retailer purchased the inventory and the price at which it sells the inventory equals its gross profit margin. Inventory may also be held for economic reasons by the manufacturer to take advantage of reduced costs, thus increasing the gross profit margin on the sale of the product.
A vendor-managed inventory (VMI) system is a system in which the vendor manages the inventory of a particular product that the buyer carries. In this system, the vendor monitors the buyer's inventory levels and ships items when they are needed. Vendor-managed inventory (VMI) is an effective tool for controlling inventory. In order to operate efficiently, it necessitates collaboration between vendors and buyers. Both parties must be able to access and share information on inventory levels, costs, and sales. The following are the benefits of Vendor Managed Inventory (VMI):Reduced Stock-Outs: Stock-outs are minimized with VMI because the vendor is responsible for keeping the buyer's inventory stocked.
Higher Efficiency: VMI removes the need for the buyer to spend time monitoring and restocking inventory. This frees up time for other duties and increases efficiency.
Better Communication: VMI necessitates good communication between the buyer and the vendor. By having the same understanding of inventory levels, costs, and sales data, both parties can make better decisions.
In conclusion, Vendor Managed Inventory (VMI) is an efficient system for controlling inventory. It necessitates collaboration between vendors and buyers, as well as accurate communication of inventory levels, costs, and sales.
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Explain how interest rates and bond prices are related to one another. Why is this important for monetary policy?
Interest rates and bond prices are inversely related to one another. That is, when interest rates increase, bond prices decrease, and when interest rates decrease, bond prices increase. This relationship is important for monetary policy because it allows policymakers to influence the economy by changing interest rates.
Interest rates are one of the main tools of monetary policy because they influence spending and investment. When interest rates are high, it becomes more expensive for individuals and businesses to borrow money, which decreases spending and investment. This can help to slow down an economy that is growing too quickly and causing inflation. Conversely, when interest rates are low, it becomes cheaper for individuals and businesses to borrow money, which increases spending and investment. This can help to stimulate an economy that is growing too slowly and causing unemployment.Bond prices are also affected by changes in interest rates.
When interest rates increase, the yield on bonds becomes less attractive compared to other investments, so investors may sell their bonds, which decreases the price. Conversely, when interest rates decrease, the yield on bonds becomes more attractive, so investors may buy more bonds, which increases the price. This is why it is important for policymakers to understand the relationship between interest rates and bond prices when making decisions about monetary policy.
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Al Murabaa Ltd designs and produces vehicle parts. Al Murabaa using a simple normal costing system allocates manufacturing overhead to its three customers based on machine hours.
The controller of Al Murabaa Ltd, Mohamed Mesfer who has recently completed studies from UAE University is unhappy with the simple costing system and decides to implement an Activity Based Costing System. He knows that there are three main activities that consume overhead resources: design, production, and engineering. He collects the following data:
Mohamed Mesfer, the controller of Al Murabaa Ltd, decides to implement an Activity-Based Costing (ABC) system to allocate manufacturing overhead more accurately.
He identifies three main activities - design, production, and engineering - that consume overhead resources. Activity-Based Costing (ABC) is a costing method that assigns costs to products or services based on the activities required to produce them. It provides a more accurate and detailed allocation of overhead costs by identifying specific activities that consume resources.
In the case of Al Murabaa Ltd, Mohamed Mesfer collects data to implement the ABC system. This data includes information on the three main activities: design, production, and engineering. The next step would be to determine the cost drivers or activity drivers for each activity. Cost drivers are the factors that cause or influence the costs of an activity.
For example, in the design activity, the cost driver could be the number of design hours required for each customer's product. In the production activity, the cost driver could be the number of machine hours used by each customer. And in the engineering activity, the cost driver could be the number of engineering change requests received from each customer.
Once the cost drivers are determined, Mohamed Mesfer can allocate the overhead costs to each customer based on the actual consumption of resources associated with the respective activities. This will provide a more accurate picture of the costs incurred by each customer and help in making informed decisions regarding pricing, product profitability, and resource allocation.
By implementing an Activity-Based Costing system, Al Murabaa Ltd can gain better insights into its cost structure and make more informed decisions to improve efficiency and profitability.
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focus on d
Selected financial statement data for Investment Co are presented below.
Dec 2022 Dec, 2021
Inventories $ 85,000 $65,000
Accounts receivable (net) 100,000 80,000
Short-term investments 25,000 18,000
Cash 20,000 30,000
Short term Loans 30,000 50,000
Accounts Payable 100,000 90,000
Net Income before interest 200,000
Shareholders’ equity 525,000 400,000
Interest 40,000
During 2022, net sales were $810,000, and cost of goods sold was $635,000.
Instructions
Compute the following ratios at December 31, 2022:
(a) Current ratio 3 marks
(b) Accounts receivable turnover and in days 4 marks
(c) Inventory turnover and in days 4 marks
(d) Times Interest earned 4 marks
(a) Current ratio:
Current ratio = Current assets / Current liabilities
Current assets = Inventories + Accounts receivable (net) + Short-term investments + Cash
Current liabilities = Short-term Loans + Accounts Payable
Current assets = $85,000 + $100,000 + $25,000 + $20,000 = $230,000
Current liabilities = $30,000 + $100,000 = $130,000
Current ratio = $230,000 / $130,000 = 1.77
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Company Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31.
Company Inc.
Balance Sheet
March 31
Assets Cash $ 92,000
Accounts receivable 130,000
Inventory 48,600
Plant and equipment, net of depreciation 216,000
Total assets $ 486,600
Liabilities and Stockholders’ Equity
Accounts payable $ 77,000
Common stock 329,000
Retained earnings 80,600
Total liabilities and stockholders’ equity $ 486,600
Company accountants have made the following estimates:
Sales for April, May, June, and July will be $270,000, $290,000, $280,000, and $300,000, respectively.
All sales are on credit. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April.
Each month’s ending inventory must equal 30% of next month’s cost of goods sold. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at March 31 are related to previous merchandise purchases and will be paid in April.
Monthly selling and administrative expenses are always $50,000. Each month $5,000 of this total amount is depreciation expense and the remaining $45,000 is spent for expenses that are paid in the month they are incurred.
The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock or repurchase its own stock during the 2nd quarter.
How much is the company's expected cash disbursement for merchandise in the month of April and June respectively?
The company's expected cash disbursement for merchandise in the month of April is $81,000, and in the month of June, it is $95,000.
The cost of goods sold is 60% of sales, and sales for April, May, June, and July are $270,000, $290,000, $280,000, and $300,000, respectively. Therefore, the cost of goods sold for April is $270,000 * 60% = $162,000. Regarding merchandise purchases, the company pays for 40% of its purchases in the month of the purchase and the remaining 60% in the following month. Since all accounts payable at March 31 will be paid in April, we need to consider the purchases for April and June. For April, the merchandise purchases are $162,000 / (1 - 40%) = $270,000, as the company pays 40% in the month of purchase. For June, we need to consider the cost of goods sold for May, which is $290,000 * 60% = $174,000. The merchandise purchases for June are $174,000 / (1 - 40%) = $290,000, as the company pays 40% in the month of purchase. Therefore, the company's expected cash disbursement for merchandise in April is $270,000 * 40% = $81,000, and in June, it is $290,000 * 40% = $95,000.
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