Here's how to calculate which option is better and by how much if interest is 10% simple: Option 1: $40,000 at the end of the first year and $55,000 at the end of the second year
Present value of the payments: PV = $40,000/(1+0.1) + $55,000/(1+0.1)²
PV = $36,363.64 + $45,454.55
PV = $81,818.18
Option 2: $32,000 now, $30,000 at the end of the first year and $30,000 at the end of the second year
Present value of the payments: PV = $32,000 + $30,000/(1+0.1) + $30,000/(1+0.1)²
PV = $32,000 + $27,272.73 + $24,793.39
PV = $84,066.12
The better option is the one with the lower present value, which is Option 1. Option 1 is better by:
Option 2 - Option 1 = $84,066.12 - $81,818.18 = $2,247.94
Therefore, Dawn should choose option 1, since it has a lower present value and is better by $2,247.94.
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kriselle is a security guard for an apartment complex. she drives her own car to work but drives a complex golf cart when on duty. she is paid by the hour, receives benefits, and has flexibility to sign up for different shifts though she is required to maintain at least 28 hours a week to keep receiving benefits. while on the job, she is required to wear a uniform and to patrol the entire complex, but can choose what route to drive or walk. kriselle most likely is
Based on the context of the information, it can be concluded that Kriselle is either a Part-Time or Full-time security guard employed by the apartment complex.
What is Full time job?Full time job is a term that is used to describe
an employee employed on average at least 30 hours of service per week, or 130 hours of service per month.
On the hand, Part time job is a term that used to describe a form of employment that carries fewer hours per week than a full-time job usually with fewer than 30 hours per week.
In this case, since Kriselle is classified as an hourly employee, responsible for maintaining the safety and security of the apartment complex and its residents but is not provided with a company vehicle for commute, but flexible to sign up for different shifts, with the ability to choose preferred trolling routes suggests some level of autonomy.
Also, receiving benefits implies that Kriselle is likely a full-time employee and meets the eligibility criteria for benefits such as health insurance, retirement plans, and possibly paid time off.
Hence, in this case, it is concluded that considering all these factors, it can be concluded that Kriselle is most likely a part-time or full-time security guard with an hourly basis, benefits, flexibility in shifts, and some autonomy in performing her job duties.
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13.On the Predictions worksheet, in cell B5, calculate the 2019 sales goal amount for women’s activeware based on the 2018 amount on the Retail worksheet and the percent in cell B1 on the Predictions worksheet. Copy this formula to the range B5:E16.
15. In cell B21 calculate the 2019 sales goal amount for men’s activeware based on the 2018 amount on the Retail worksheet and the percent in cell B1 on the Predictions worksheet. Copy this formula to the range B21:E32.
Can you please tell me the formulas for womens clothing in cell B5 and the mens formula in b21 (for the womens the formula i used was +(Retail!B5*predictions!$B$1)+Retail!B5.........but it didnt work bc for quarter 1 i had got 771,503
The formula for women's clothing in cell B5 is:=(Retail!B5 * Predictions!$B$1) + Retail!B5
The formula for men's clothing in cell B21 is the same as the women's formula:=(Retail!B21 * Predictions!$B$1) + Retail!B21
These formulas calculate the 2019 sales goal amount by adding the product of the 2018 sales amount (from the Retail worksheet) and the percentage (from cell B1 on the Predictions worksheet) to the 2018 sales amount. By copying these formulas to the specified ranges, the calculations will be applied to the corresponding cells.
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The following is the Statement of Financial Position and the
Statement of Income for Markus Limited:
Markus Limited
Statement of Financial Position
As at December 31, 2021
2021
2020
Assets
C
Markus Limited’s Statement of Financial Position and Statement of Income is given for the year ended December 31, 2021. In this statement, the Assets and Liabilities of Markus Limited are compared with those of the previous year.
In the given Statement of Financial Position, the assets and liabilities of Markus Limited are presented for the years 2020 and 2021. In 2021, the company's non-current assets were C500,000, which is C25,000 more than in 2020.
The firm's inventory has increased by C70,000 to reach C205,000 in 2021.
Furthermore, cash and cash equivalents also increased to C115,000 in 2021, compared to C100,000 in 2020.
When we look at the liability section, Markus Limited’s accounts payable increased by C50,000 to C270,000 in 2021. The company also took out a loan of C80,000 in 2021, compared to none in 2020.
In terms of Equity, Markus Limited’s retained earnings increased by C35,000 in 2021, while common shares remained unchanged.
Overall, Markus Limited has seen a growth in assets and liabilities in 2021 compared to 2020. This growth can be seen in the increase of non-current assets, inventory and cash, which all increased during the year.
While there was an increase in accounts payable and loan, there was no change in the number of common shares, and retained earnings increased by C35,000. This indicates that the company has been profitable and has retained a portion of the profit in the business.
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Refer to the T account for an imaginary bank
Assets Liabilities
Reserve $3,000 Deposits $25,000
Loan $22,000
Based on the information given in the table calculate the following:
1. If the reserve ratio is 10% then calculate any excess reserve.
2. If the bank decides to loan out the excess reserve then how much money supply that excess reserve can create?
If the reserve ratio is 10% then calculate any excess reserve.The reserve ratio is the portion of the deposit that banks must hold in reserve.
Reserve ratio is expressed as a percentage of a bank's total deposits. Excess reserves refer to the amount of funds banks keep as cash, either in their vaults or on deposit with the Federal Reserve. Reserve = 10% of 25,000Reserve = 10/100 × 25,000Reserve = 2,500Excess Reserve = Reserve - Required Reserve Excess Reserve = 3,000 - 2,500Excess Reserve = 5002.
Money Multiplier = 1/RR Where RR = Reserve Ratio Money Multiplier = 1/10%Money Multiplier = 10Change in money supply = Excess Reserve x Money Multiplier Change in money supply = 500 x 10Change in money supply = 5,000.
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A stock had returns of 11 percent, 17 percent, 15 percent, 17 percent, 16 percent, and -4 percent over the last six years. What is the arithmetic return for the stock? Arithmetic return What is the geometric return for the stock?
Given that a stock had returns of 11 percent, 17 percent, 15 percent, 17 percent, 16 percent, and -4 percent over the last six years. The arithmetic and geometric returns for the stock are to be calculated below.
Arithmetic Return: The Arithmetic return is defined as the average of the total returns earned by an asset over a period of time. It is also known as the simple return or average annual return.
The formula to calculate the arithmetic return is shown below;
Arithmetic Return = (Σ Return for each period) / n
Where n is the number of periods considered. Let us calculate the Arithmetic return for the stock given above.
Average Return = (11 + 17 + 15 + 17 + 16 + (-4)) / 6= 72 / 6= 12%
Therefore, the Arithmetic Return for the stock is 12%.
Geometric Return: The Geometric return is the average rate of return earned by an asset over a period of time. It is calculated using the formula shown below;
Geometric Return = (1 + r1) (1 + r2) ... (1 + rn)^1/n - 1
Where ri is the return earned in the ith year, and n is the number of years considered. Let us calculate the Geometric return for the stock given above.Geometric Return = (1.11 × 1.17 × 1.15 × 1.17 × 1.16 × 0.96)^(1/6) - 1= 1.10^(1/6) - 1= 0.0188 or 1.88%
Therefore, the Geometric Return for the stock is 1.88%.
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WeBuild Ltd has traditionally constructed small scale student apartment buildings. Management was concerned about rising costs whilst building its first large scale student accommodation and responded by using cheaper imported window frames and sealants. These materials proved to be highly flammable, and a fire occurred shortly after the building was occupied by students. The fire nearly proved fatal and caused significant reputational issues for WeBuild, casting public doubt about the safety of all WeBuild’s buildings.
Following an initial investigation, the responsible senior manager believes that the problem can only be resolved if all window frames and sealants are replaced. The CEO considered this request but has yet to approve the funding for the replacement program.
According to Augustine (2000) Six Stages of Crisis Management, what is the current crisis stage for WeBuild?
a.Containing the crisis.
b.Preparation.
c.Avoiding the crisis.
d.Profiting from the crisis.
e.Resolving the crisis.
The current crisis stage for WeBuild is "Containing the crisis". Crisis management is the act of managing an unpredictable event, or crisis, that threatens to harm an organization's personnel, assets, or reputation. It is the process of preparing for and responding to such crises with the aim of minimizing their negative impacts. Augustine's Six Stages of Crisis Management are a widely accepted and utilized model for understanding and responding to crises.
According to Augustine's Six Stages of Crisis Management, the current crisis stage for WeBuild is "Containing the crisis." This stage involves responding to the crisis immediately by implementing strategies to limit the damage and restore operations. In this case, WeBuild must focus on containing the fire and ensuring the safety of the students, as well as minimizing the reputational damage caused by the incident. The senior manager's proposal to replace the window frames and sealants is part of this stage, as it would help prevent future incidents and address the root cause of the crisis. However, the CEO has yet to approve the funding for this proposal, which may delay the containment efforts and prolong the crisis. Therefore, WeBuild must prioritize containing the crisis by taking swift and effective action to address the current situation.
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Timothy wants to accumulate $44,000 in a fund with payments of $2,200 made at the end of every quarter. The interest rate is 5.83% compounded quarterly.
a. How many payments (rounded up to the next payment) will it take to accumulate this amount?
23 payments
14 payments
17 payments
18 payments
b. How long will it take to accumulate this amount?
6 years and 6 months
7 years and 4 months
7 years and 6 months
4 years and 6 months
a. The 18 payments. By using the future value of an annuity formula, it takes 18 payments (rounded up) to accumulate $44,000.
b. The 7 years and 6 months. By dividing the number of payments (18) by the number of payments per year (4), it takes 4.5 years or 7 years and 6 months to accumulate $44,000.
a. 18 payments. To calculate the number of payments required to accumulate the desired amount, we can use the formula for the future value of an ordinary annuity:
n = (log(PV * r / PMT + 1) / log(1 + r))
Where:
PV = Present value or initial amount ($0 in this case)
r = Interest rate per period (5.83% or 0.0583 divided by 4 for quarterly compounding)
PMT = Payment amount ($2,200)
Using the given values, the calculation yields:
n = (log(44,000 * (0.0583/4) / 2,200 + 1) / log(1 + (0.0583/4)))
n ≈ 17.23
Since we need to round up to the next payment, it will take 18 payments to accumulate the desired amount.
b. The correct answer is 7 years and 6 months. To calculate the time it takes to accumulate the desired amount, we can use the formula for the number of periods:
t = n / q
Where:
t = time in years
n = Number of payments (18 from the previous calculation)
q = Number of payments per year (4 since payments are made quarterly)
Using the given values, the calculation yields:
t = 18 / 4
t = 4.5 years
Since we're dealing with quarterly payments, we convert the 0.5 years to months:
0.5 years * 12 months = 6 months
Therefore, it will take 7 years and 6 months to accumulate the desired amount.
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the difference between the profit maximizing level of output a firm in a monopolistic competitive market produces and the minimum cost output is known as
The difference between the profit maximizing level of output a firm in a monopolistic competitive market produces and the minimum cost output is known as the markup.
On the other hand, the minimum cost output refers to the level of output where the firm's average total cost is minimized. This is the level of output at which the firm achieves the lowest possible cost per unit of output.The difference between the profit maximizing level of output and the minimum cost output is called the markup. The markup represents the extent to which the firm can set its price above the minimum cost level in order to maximize its profits.
For example, let's say a firm in a monopolistic competitive market determines that the profit maximizing level of output is 100 units. At this level, the firm sets its price and produces in a way that maximizes its profit. However, the minimum cost output for the firm is determined to be 80 units. This means that the firm has a markup of 20 units (100 - 80) between its profit maximizing level of output and the minimum cost output.
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A. A cash receipts clerk is responsible for recering cash uhtena awortin General Accounting is responsible for preparig the bakk amvitaton B. Prior to issuing payment, employes in Accourts Parborcompetient? price of items ordered on the Purchse Order to the untpreed itas received on the Vendor lnvoice to ensure that fit and finish meet company giverios EXAMINING [Choose] SUPERVISING [Choose] CALCULATING [Chose] SEGREGATING DOCUMENING REE RR T
N
A cash receipts clerk is responsible for receiving cash while General Accounting is responsible for preparing the bank's reconciliation.
Meanwhile, employees in Accounts Payable are responsible for examining the price of items ordered on the Purchase Order to the unpriced items received on the Vendor Invoice to ensure that fit and finish meet the company's criteria. They are also responsible for supervising, calculating, segregating, and documenting. In general, the primary responsibility of the cash receipts clerk is to collect and document payments from customers.
Accounts Payable is responsible for ensuring that all vendors and suppliers are paid in a timely and accurate manner. This department is responsible for examining vendor invoices, ensuring that the price of items ordered on the Purchase Order matches the unpriced items received on the Vendor Invoice, and resolving any discrepancies or errors that are identified. Accounts Payable is also responsible for supervising, calculating, segregating, and documenting invoices to ensure that they are properly processed and recorded.
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lease answer all questions
Question 1_
A 5-year bond pays interest annually. Its par value is $1,000 and its coupon rate equals 9%. If the market’s required return on the bond is 8 per cent, what is the bond’s market price?
Question 2
SydMel Ltd has issued 6-year bonds that pay $35 in interest twice each year. The face value of these bonds is $1,000 and they offer a yield to maturityof 5.5 %. How much are the bonds worth?
Question 3
Investors face a tax rate of 30% on interest paid by corporate bonds. If tax-free bonds currently offer yields of 6 %, what yield would equally risky corporate bonds need to offer to be competitive?
Question 4
S Ltd has outstanding an issue of preferred equity with a par value of $100. It pays an annual dividend equal to 9% of par value. If the required return on S Ltd’s preferred equity is 7 %, and if S Ltd pays its next dividend in one year, what is the market price of the preferred equity today?
Question 5
AMC’s preferred equity pays a dividend of $10 each year. If the shares sell for $60 each and the next dividend will be paid in one year, what return do investors require on AMC preferred equity?
Question 6
SydMel Ltd has issued preferred equity that offers investors a 10 % annual return. A share currently sells for $80, and the next dividend will be paid in one year. How much is the dividend?
Question 7
Gail Dribble is analysing the shares of Petscan Radiology. Petscan’s equity pays a dividend once each year, and it just distributed this year’s $0.85 dividend. The market price of the share is $12.14. Gail estimates that Petscan will increase its dividends by 7 % per year forever. After contemplating the risk of Petscan equity, Gail is willing to hold the shares only if they provide an annual expected return of at least 13 %. Should she buy Petscan shares or not?
Question 8
Sydney-Melbourne (SydMel) operates a chain of weight-loss centres for carb lovers. Its services have been in great demand in recent years and its profits have soared. Sydmel recently paid an annual dividend of $2.70 per share. Investors expect that the company will increase the dividend by 25% in each of the next three years, and after that they anticipate that dividends will grow by about 6% per year. If the market requires an 11% return on SydMel equity, what should the share sell for today?
Question 1The bond's market price can be calculated by using the formula given below:
Market price = PV(Coupon payments) + PV(Face value)
PV is the Present Value of the payments. Coupon payment = Par value x Coupon rate = 1000 x 9% = $90 per year
PV(Coupon payments) = Coupon payment x [1 - 1/(1 + r)ⁿ]/rwhere r is the required rate of return and n is the number of years.PV(Coupon payments) = 90 x [1 - 1/(1 + 0.08)⁵]/0.08 = $382.20Face value = $1,000PV(Face value) = Face value/(1 + r)ⁿ = 1000/(1 + 0.08)⁵ = $680.58Therefore,Market price = PV(Coupon payments) + PV(Face value) = $382.20 + $680.58 = $1,062.78
Question 2The bond's worth can be calculated by using the formula given below:
Bond's worth = PV(Coupon payments) + PV(Face value)PV is the Present Value of the payments.Coupon payment = $35 per half year.FV = $1,000Yield to maturity = 5.5%Yearly coupon payment = 2 x $35 = $70PV(Coupon payments) = $70 x [1 - 1/(1 + 0.055/2)¹²]/(0.055/2) = $1157.31PV(Face value) = $1000/(1 + 0.055/2)¹² = $751.32Therefore,Bond's worth = PV(Coupon payments) + PV(Face value) = $1,157.31 + $751.32 = $1,908.63
Question 3Yield on corporate bonds that would be required to be competitive can be calculated as shown below:
Tax-free bonds yield = 6%Investors face a tax rate = 30%After-tax yield on tax-free bonds = 6% x (1 - 30%) = 4.20%After-tax yield on corporate bonds = 4.20%Tax-adjusted yield on corporate bonds = 4.20%/(1 - 30%) = 6%Therefore, Yield on corporate bonds that would be required to be competitive is 6%.
Question 4The market price of the preferred equity today can be calculated as shown below:
Annual dividend = Par value x Dividend rate = $100 x 9% = $9Next year dividend = $9Required rate of return = 7%Price of preferred equity = Next year's dividend/ (required rate of return - dividend rate)= $9/(7% - 9%) = $(-450) which is not possible, this means that the calculation is wrong. Hence the market price of the preferred equity today is not possible.
Question 5Return required on AMC preferred equity can be calculated as shown below:
Annual dividend = $10Market price = $60Next year dividend = $10Required rate of return =
Dividend growth rate = (10/60) x 100 = 16.67%Dividend growth rate (g) = Retention ratio (b) x Return on equity (ROE)b = (ROE-g)/ROEThe average ROE of S&P 500 companies is 15%.b = (15% - 16.67%)/15% = -0.1111
Dividend growth model can be used to calculate the required rate of return as shown below:r = (D₁/P₀) + gwhere,r = Required rate of returnD₁ = Next year's dividendP₀ = Current market priceg = Dividend growth rater = (10/60) + 16.67% = 33.33%Therefore, return required on AMC preferred equity is 33.33%.
Question 6Dividend on preferred equity can be calculated as shown below:
Annual return = 10%Current share price = $80
The dividend is annual.
Dividend = Share price x Annual return = $80 x 10% = $8Therefore, the dividend on preferred equity is $8.
Question 7
The dividend is expected to increase by 7% per year forever.
The market price of the share is $12.14 and the annual expected return is at least 13%.
The required rate of return on Petscan equity can be calculated using the Gordon Growth Model as shown below:
r = D₁/P₀ + g where, D₁ = Expected dividend next year P₀ = Current market price g = Dividend growth rate = 7%r =
Required rate of return = 13%D₁ = $0.85 x 1.07 = $0.9095r = $0.9095/$12.14 + 0.07 = 0.1459 or 14.59%
Required rate of return (r) is greater than the expected rate of return (13%).
Therefore, Gail should buy the Petscan shares.Question 8The present value of the dividend payments during the first three years can be calculated using the formula given below:Present value of the first three years of dividends = D₁/(1 + r) + D₂/(1 + r)² + D₃/(1 + r)³where,r = Required rate of return
D₁ = dividend payment in year 1D₂ = dividend payment in year 2D₃ = dividend payment in year 3Dividend payment in year 1 = $2.70 x 1.25 = $3.38
Dividend payment in year 2 = $3.38 x 1.25 = $4.22
Dividend payment in year 3 = $4.22 x 1.25 = $5.28
Present value of the first three years of dividends = $3.38/(1 + 0.11) + $4.22/(1 + 0.11)² + $5.28/(1 + 0.11)³ = $10.02
The present value of the dividend payments after year 3 can be calculated using the formula given below:Present value of all subsequent dividend payments = D₄/(r - g) x [1/(1 + r)³]
where,g = Dividend growth rate = 6%Dividend payment in year 4 = $5.28 x 1.06 = $5.60
Present value of all subsequent dividend payments = $5.60/(0.11 - 0.06) x [1/(1 + 0.11)³] = $66.62
The current market price of the stock can be calculated by adding the present value of the dividends for the first three years to the present value of all subsequent dividend payments as shown below:
Current market price of the stock = Present value of the first three years of dividends + Present value of all subsequent dividend payments = $10.02 + $66.62 = $76.64Therefore, the share should sell for $76.64 today.
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. The municipality hires an expert to analyze the market and finds out that riders of fixed gear bikes do not stop at traffic lights and generate many traffic accidents. The external cost on the city increases with the number fixed gear bikes: external cost =2/3Q. a. Draw a graph showing the marginal benefit (MB), marginal private cost (MPC) and marginal social cost (MSC). Find the socially optimal output. Answer: b. What impact would the tax described in part 3 have on the market with the externality? Find the deadweight loss with and without the tax. Show them on the graph. Answer:
a. Graph showing marginal benefit, marginal private cost, and marginal social cost, with socially optimal output: The external cost incurred by the city with the number of fixed gear bikes can be expressed as external cost = 2/3Q.The graph below shows the marginal benefit (MB),
marginal private cost (MPC), and marginal social cost (MSC). The intersection point of the MPC and the MSC curves represents the socially optimal output, Q*.
The marginal social cost (MSC) curve is above the marginal private cost (MPC) curve since the external cost of the externality is not reflected in the private cost. The socially optimal output (Q*) is less than the market equilibrium output (Q0).
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a new 2017 honda civic produced in 2017 and purchased in 2018 is
A new 2017 Honda Civic produced in 2017 but purchased in 2018 is considered a new car despite the time difference.
The classification of a car as "new" is determined by its previous ownership and registration status, rather than the production and purchase year discrepancy. In this case, even though the Honda Civic was produced in 2017 if it was purchased in 2018 and has never been previously owned or registered, it is still regarded as a new car. The year of production represents the model year and indicates the specifications and features of the vehicle, while the year of purchase reflects when the transaction and legal ownership began. This distinction is important for factors such as warranty coverage, resale value, and the overall condition of the vehicle. Therefore, despite the time difference between production and purchase, the car is considered new as long as it has not been previously owned or registered.
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product differentiation: group of answer choices refers to the attempt of firms to make their products look like those of the other firms in the industry. refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers. refers to the advantage big firms have in research and development. is a common characteristic of a perfectly competitive market structure. is only employed in a monopoly market structure.
Product differentiation refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers.
Product differentiation is a strategy used by firms to make their products stand out from competitors in the market. It involves creating unique features, characteristics, or brand image for a product that makes it distinct and appealing to consumers.The purpose of product differentiation is to make consumers perceive the product as different or better than similar products offered by competitors.
This differentiation can be achieved through various means such as product design, packaging, branding, advertising, and customer service.By differentiating their products, firms aim to create a competitive advantage and attract customers who value the unique attributes or benefits offered. This strategy allows firms to charge higher prices, gain customer loyalty, and increase market share.
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Which conversion process introduces the system first to a limited portion of the organization?
A) the pilot study strategy
B) the phased approach strategy
C) the limited cutover strategy
D) the parallel strategy
The conversion process introduces the system first to a limited portion of the organization. The correct option is A) The pilot study strategy.
The pilot study strategy is the conversion process that introduces the system first to a limited portion of the organization. In this approach, a small-scale implementation of the system is conducted in a specific department, division, or location within the organization. This allows for testing, evaluation, and fine-tuning of the system before a full-scale implementation is carried out.
By implementing the system in a controlled and limited environment, the pilot study strategy enables organizations to identify and address any issues or challenges that may arise. It provides an opportunity to assess the system's functionality, compatibility with existing processes, and its impact on the specific area of the organization where it is being tested.
Once the pilot study is deemed successful, the organization can then proceed with a wider implementation of the system across the entire organization using a phased approach, limited cutover, or parallel strategy, depending on the specific circumstances and requirements. However, the pilot study strategy is the initial step in introducing the system to a limited portion of the organization for evaluation and testing purposes.
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T/F: one of the key areas where operations research methods can contribute to improving healthcare is in the modeling of patient volumes and flow through organizations and health systems
True. One of the areas where operations research methods can contribute to improving healthcare is in the modelling of patient volumes and flow through organizations and health systems.
Operations research (OR) is an interdisciplinary branch of mathematics that uses analytical and mathematical models, statistical analysis, and optimization to make better decisions about complex problems.
In healthcare, operations research can be applied to the improvement of the efficiency and effectiveness of healthcare systems and processes.
One of the ways that operations research methods can contribute to improving healthcare is through the modelling of patient volumes and flow through organizations and health systems.
By developing models that simulate patient flow, healthcare organizations can optimize their resource allocation, identify areas where improvements can be made, and increase efficiency and patient satisfaction.
Overall, operations research is an important tool for improving healthcare systems and delivering high-quality care to patients.
Hence, the statement is true.
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*****No plagiarism and at least 250 words****
What are some ethical considerations Pfizer uses to develop
human capital?
Pfizer, one of the largest pharmaceutical companies globally, is well aware of its role in society. The organization has, therefore, developed ethical considerations to handle human capital development in the best way possible.
Some of the ethical considerations Pfizer uses to develop human capital are as follows:
Fair pay and benefits
Pfizer offers its employees a fair wage and benefits as part of its ethical human capital development program.
The company takes into account the minimum wage requirements set by the law and goes above and beyond it to offer employees better pay. This policy has helped create a healthy work environment that supports productivity and personal growth.
Job security
Pfizer provides job security to its employees, which means it doesn't lay off workers unnecessarily. By ensuring job security, the company instills a sense of belonging and loyalty in its employees, creating a culture of trust and productivity.
Employee developmentPfizer offers training and career development opportunities to its employees, making it a great place to work. Employees are encouraged to grow and develop professionally, and this has created an excellent human capital pool that contributes to the company's growth and success.
Ethical and transparent policies
Pfizer has well-documented ethical policies that guide its human capital development practices. The company has clear rules against discrimination, harassment, and any other unethical practices in the workplace. It has also established policies and procedures for employee grievances, ensuring that everyone is treated with fairness and respect in the workplace.
In conclusion, Pfizer's ethical considerations to develop human capital are critical in ensuring that employees are treated with respect, dignity, and fairness.
Through these considerations, the company creates an environment that promotes productivity, personal growth, and loyalty among employees.
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Question 2 [24 marks]. An investor is considering investing into the shares of a start-up company. The investor's approach to share valuation is to discount future expected dividends at a rate of 5.0% per annum. The company is an online food delivery service that is expected to start paying annual dividends of 6p per share in 3 years' time. Dividends are expected to remain constant for 5 years and then start increasing at a rate of 10% per year for the next 20 years before the dividend growth rate reverts to 3.5% per annum. (a) Show that a fair price for the company's shares is approximately £16.84 per share. [12] (b) Explain what happens to the share valuation if the discounting rate is changed from 5% to 3% per annum. (c) After 7 years the investor sells the company's shares for £22.50 per share. [2] Assuming the investor pays income tax at 40% and the capital gains tax rate is 28% determine the investor's net yield on this investment after tax. [10]
In order to determine the fair price of the shares, the following steps need to be followed:
Step 1:
Calculation of dividends for the first 5 years:
Year 1 - 3:
No dividends are expected.
Year 4:
Dividend expected = 6p per share
Year 5:
Dividend expected = 6p per share
The present value of the above dividends is as follows:
Year
Present Value 4 5(6/(1+0.05 )^4) = 4.69(6/(1+0.05)^5 ) = 4.45
Step 2:
Calculation of dividends for the next 20 years:
The first year in which dividend growth occurs is in year 6.
Hence, growth occurs from year 6 to year 25.
Dividend in year 6 = 6.6p per share.
Dividend in year 7 = 7.26p per share.
Dividend growth rate = 10%Step 3:
Calculation of terminal value:
The growth rate of dividends after year 25 is 3.5% per annum.
The present value of dividends is calculated till year 25.
After year 25, we need to find the terminal value.
Terminal Value = Dividend at year 26 / (discount rate - growth rate) = 96.5p per share/(0.05 - 0.035) = 579.48p per share
Present value of the terminal value = 579.48/(1+0.05)^25 = 123.91p per share
Total present value of dividends = 4.69 + 4.45 + Σ PV of dividends from year 6 to 25 + 123.91= 145.05p per share
Approximate fair price of the share = Present value of dividends / (1+discount rate)^
n= 145.05p
per share / (1+0.05)^3= £16.84 per shareb)
If the discount rate is reduced from 5% to 3% per annum, the fair price of the shares will increase.
The new fair price of the shares can be calculated using the following formula:
New approximate fair price of the share = Present value of dividends / (1+discount rate)^n= 145.05p per share / (1+0.03)^3= £19.17 per sharec)
The initial investment is £16.84 per share and the selling price is £22.50 per share.
apital gain per share = £22.50 - £16.84 = £5.66 per share.
The investor paid income tax at 40% and capital gains tax at 28%.
Net yield on investment after tax = (capital gain - capital gain tax) * (1 - income tax rate)= (£5.66 - 0.28 * £5.66) * (1 - 0.4) = £1.98 per share.
The net yield on investment after tax is £1.98 per share.
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Suppose a company has 1110 warehouse workers. The company administers a polygraph test that is 87% accurate. Of the 1110 workers, 20 actually lie during the polygraph test.Answer the following questions.How many workers did not lie? How many workers that did not lie, tested positive for lying? How many workers that did lie, tested positive for lying? How many total workers tested positive for lying? What fraction of those workers who tested positive for lying, were not lying? Express your answer as a percent rounded to one decimal place. %
Out of the 1110 warehouse workers, the number of workers who did not lie can be calculated by subtracting the number of workers who actually lied from the total number of workers.
Therefore, the number of workers who did not lie is 1110 - 20 = 1090.
To determine the number of workers who tested positive for lying but were actually telling the truth, we need to consider the accuracy of the polygraph test. Since the test is 87% accurate, it means that 87% of the workers who did not lie would test negative, and 13% of them would test positive incorrectly. Therefore, the number of workers who did not lie but tested positive for lying is 1090 * 0.13 = 141.7, which we can round to 142 workers.
Similarly, for the workers who actually lied, the test would correctly identify them as lying with an accuracy of 87%. Hence, the number of workers who lied and tested positive for lying would be 20 * 0.87 = 17.4, rounded to 17 workers.
The total number of workers who tested positive for lying is the sum of workers who lied and tested positive (17 workers) and workers who did not lie but tested positive (142 workers). Therefore, the total number of workers who tested positive for lying is 17 + 142 = 159.
To find the fraction of workers who tested positive for lying but were not lying, we divide the number of workers who did not lie but tested positive (142 workers) by the total number of workers who tested positive (159 workers). The fraction is 142/159 ≈ 0.892, which, when expressed as a percentage rounded to one decimal place, is 89.2%.
In summary:
- Number of workers who did not lie: 1090
- Number of workers who did not lie but tested positive for lying: 142
- Number of workers who lied but tested positive for lying: 17
- Total number of workers who tested positive for lying: 159
- Fraction of workers who tested positive for lying but were not lying: 89.2%
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In a competitive market, no single producer can influence the market price because many other sellers are offering a product that is essentially identical. consumers have more influence over the market price than producers do. government intervention prevents firms from influencing price. producers agree not to change the price. 8) When price is greater than marginal cost for a firm in a competitive (1pts) market. marginal cost must be falling. the firm must be minimizing its losses. there are opportunities to increase profit by increasing production. the firm should decrease output to maximize profit. 9) Firms in perfect competition are price takers because (ipt) one firm determines price and all other firms accept this price. consumers have market power and can set prices. firms take the price that government determines. each firm is too small relative to the market to be able to influence price.
The firm takes the price determined by market forces and adjusts its production quantity accordingly to maximize its profit within the given price framework.
When price is greater than marginal cost for a firm in a competitive market, there are opportunities to increase profit by increasing production.
In a competitive market, firms aim to maximize their profits by producing at a quantity where marginal cost equals marginal revenue. When the price exceeds the marginal cost, producing additional units will contribute positively to the firm's profit.
Therefore, the firm can increase its production to take advantage of the higher price and potentially earn more profit.
Firms in perfect competition are price takers because each firm is too small relative to the market to be able to influence price. In a perfectly competitive market, there are numerous buyers and sellers offering identical products. As a result, no individual firm has the ability to influence or set the market price.
Each firm has to accept the prevailing market price as determined by the interaction of supply and demand.
The firm takes the price determined by market forces and adjusts its production quantity accordingly to maximize its profit within the given price framework.
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case single with an AGI of 101,000 purchasing new home
in 2011 in 2022 he paid 1,200 and private mortgage insurance how
much of this deduction on his 2022 schedule A 12,000 1,080 or 0
When an individual pays private mortgage insurance (PMI), they may be able to claim a deduction on their tax return. However, the amount of the deduction that can be claimed varies based on the taxpayer's adjusted gross income (AGI) and other factors. In the case of a single individual with an AGI of $101,000 who purchased a new home in 2011 and paid $1,200 in PMI in 2022, the amount of the deduction they can claim on their 2022 Schedule A will be $0.
The deduction for PMI is subject to a phase-out based on the taxpayer's AGI. For a single taxpayer, the phase-out begins at an AGI of $100,000. For each $1,000 of AGI above $100,000, the amount of the deduction is reduced by 10%. At an AGI of $109,000 or higher, no deduction is allowed.
In this case, the taxpayer's AGI is $101,000, which is $1,000 above the threshold for the phase-out. This means that the amount of the PMI deduction they can claim is reduced by 10%. Since they paid $1,200 in PMI, the amount of the deduction is reduced by $120 (10% of $1,200), leaving a deduction of $1,080.
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Which of the following accounts is not normally part of the revenue and collection cycle?
a. Sales.
b. Accounts Receivable.
c. Cash.
d. Purchases Returns and Allowances.
The account that is not normally part of the revenue and collection cycle is Purchases Returns and Allowances. There are several accounts associated with revenue and collection cycle.
The revenue and collection cycle is the series of activities that starts with a sale and ends with the collection of cash.There are three primary types of transactions associated with the revenue and collection cycle. These include:1. Sales2. Accounts Receivable3. Cash Sales: This is the revenue generated from the sale of goods or services to customers.
This account records the sale of goods or services to customers.Accounts Receivable: This account records the amount of money owed by customers to the company for goods or services that have been sold.Cash: This account records the amount of cash received from customers for goods or services that have been sold. Purchases Returns and Allowances are a component of the purchases and disbursements cycle.
Purchases Returns and Allowances is an account that tracks the goods returned to the supplier and the allowances for damaged goods. Therefore, option d) Purchases Returns and Allowances is not normally part of the revenue and collection cycle.
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A Canadian investor is considering the purchase of U.K. securities. The current exchange rate is Can$1.50 per pound. Assume that the price level of a typical consumption basket in Canada is 1.50 times the price level of a typical consumption basket in the United Kingdom. a. Calculate the real exchange rate. b. One year later, price levels in Canada have risen 2 percent, while price levels in the United Kingdom have risen 4 percent. The new exchange rate is Can$1.4708 per pound. What is the new real exchange rate? c. Did the Canadian investor experience a change in the real exchange rate?
a) Real exchange rate can be defined as the rate at which the goods and services of one country can be exchanged for the goods and services of another country. The real exchange rate between two countries equals the nominal exchange rate multiplied by the ratio of the price levels of the two countries in terms of a common currency.
In this case, the nominal exchange rate is Can1.50 per pound. The ratio of the price level of a typical consumption basket in Canada to that in the United Kingdom is 1.50.
The real exchange rate is given by:
Real exchange rate = Nominal exchange rate × (Price level of Canadian consumption basket / Price level of U.K. consumption basket)= Can1.50 per pound × (1.50 / 1)
= Can2.25 per pound
b) In order to calculate the new real exchange rate, we need to find the new nominal exchange rate using the information given. The price levels in Canada and the United Kingdom have risen by 2% and 4% respectively.
This means that the price level of the Canadian consumption basket is now 1.5 × 1.02 = 1.53 times that of the U.K. consumption basket.
Let X be the new nominal exchange rate such that X pounds can be exchanged for 1 Canadian dollar.
Then, we have:
X × (1/1.53) = 1.4708
Or,
X = 1.4708 × 1.53 = 2.2469
The new nominal exchange rate is Can1 = 2.2469.
The new real exchange rate is given by:
Real exchange rate = Nominal exchange rate × (Price level of Canadian consumption basket / Price level of U.K. consumption basket)= Can1
= 2.2469 × (1.53 / 1)
= Can3.4344 per pound
c) Yes, the Canadian investor experienced a change in the real exchange rate.
The real exchange rate has increased from Can 2.25 per pound to Can 3.4344 per pound, which means that the Canadian investor can now purchase more goods and services in the United Kingdom than before for the same amount of Canadian dollars.
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(exhibit: a perfectly competitive firm in the short run) the firm will shut down in the short run if the price falls below:
In a perfectly competitive market, a firm will shut down in the short run if the price falls below the minimum average variable cost (AVC). The minimum AVC represents the point at which the firm is unable to cover its variable costs and would incur greater losses by continuing to operate.
In the short run, a firm has both fixed costs and variable costs. Fixed costs are expenses that do not change with the level of production, such as rent or equipment costs. Variable costs, on the other hand, vary with the level of production, such as labor or raw material costs.
If the price of the product falls below the minimum AVC, it means that the firm cannot cover its variable costs, let alone its fixed costs. In such a situation, the firm would minimize its losses by shutting down and not producing any output. By shutting down, the firm avoids incurring further variable costs and limiting its losses to the amount of its fixed costs.
Therefore, in a perfectly competitive market, a firm will shut down in the short run if the price falls below the minimum AVC.
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Fly High Inc.'s stock return will be 18.4% in economic expansion and −7.5% in economic recession. Assume that the probability of economic expansion and recession is 72% and 28%, respectively. The standard deviation of the stock return is 13.52% 9.69% 11.63% 14.75% 15.89%
Fly High Inc.'s stock return will be 18.4% in economic expansion and −7.5% in economic recession. Assume that the probability of economic expansion and recession is 72% and 28%, respectively.
The standard deviation of the stock return is 13.52%.It is known that Fly High Inc.'s stock return will be 18.4% in economic expansion and -7.5% in economic recession. The probability of economic expansion is 72% and the probability of recession is 28%. The standard deviation of the stock return is 13.52%.The expected rate of return can be calculated using the formula below:
ER = (P1 × R1) + (P2 × R2)
Where,ER is the expected returnP1 is the probability of scenario 1R1 is the return in scenario 1P2 is the probability of scenario 2R2 is the return in scenario 2We are given:
[tex]P1 = 72% and R1 = 18.4%P2 = 28% and R2 = -7.5%ER = (0.72 × 0.184) + (0.28 × -0.075)ER = 0.087 + (-0.021ER = 0.066 or 6.6%[/tex]
The expected rate of return is 6.6%.
To calculate the risk, we use the formula:σ = √(P1 x (R1 - ER)² + P2 x (R2 - ER)²)Where,σ is the standard deviation of the stock return
Therefore, the standard deviation of the stock return is 12.39%.
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Juan Manuel Marquez, who is Manny Pacquiao's guardian, persuades/convinces him to buy some property from Danny Garcia at a very highly inflated price. Juan Manuel Marquez may be liable for
a. undue influence.
b. fraud.
c. duress.
d. mistake
The option (b) is correct. Juan Manuel Marquez, who is Manny Pacquiao's guardian, persuades/convinces him to buy some property from Danny Garcia at a very highly inflated price. Juan Manuel Marquez may be liable for fraud.
What is fraud?
Fraud is defined as the use of deliberate deceit for personal advantage. It's when one individual deceives or tricks another to achieve some personal advantage that they wouldn't have been able to get without the other's help.
Fraud involves the following essential components: false statements, made with an intention to deceive, and inducing reliance on the false statement by the person who hears it. The plaintiff must prove that the defendant intentionally or recklessly made a false statement that led to the plaintiff's injury in a fraud case.In this case, Juan Manuel Marquez, who is Manny Pacquiao's guardian, persuades or convinces him to buy some property from Danny Garcia at a very highly inflated price. Juan Manuel Marquez may be held accountable for fraud because he intentionally deceived Manny Pacquiao by convincing him to buy property at an extremely high price, causing Manny Pacquiao to suffer financial damage. Therefore, option (b) is correct.
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Matt’s Manufacturing & Customs stocks a special switch connector in his central warehouse for the sake of supplying the field service crew when they need them for customer breakdowns. The yearly demand for these connectors is 15000. Matt estimates his holding cost for this item to be $25 per unit. The cost to place and process an order for more of these connectors is $75. Matt’s company operates 300 days per year, and the lead time promised (and observed) from the supplier of the switch connector is 2 days.
a) Determine the economic order quantity.
b) Determine the annual holding cost.
c) Determine the annual ordering cost.
d) What would be the most reasonable reorder point
a) Determine the economic order quantity(E.O.Q)E.O.Q = √((2DS)/(H))Where D = Annual Demand of the product S = Cost per purchase order H = Holding cost per unit per year Now substitute the given values in the formula to calculate E.O.Q:E.O.Q = √((2 × 15000 × 75)/25)E.O.Q = 109.54 ~ 110 units
b) Determine the annual holding cost. Annual holding cost = (Q/2) * H * D/Q
Where Q = order quantity H = Holding cost per unit per year D = Annual demand of the product Now, substitute the given values in the formula to calculate the annual holding cost. Annual holding cost = (110/2) × 25 × 15000/110Annual holding cost = $1714.29
c) Determine the annual ordering cost. Annual ordering cost = (D/Q) * S Where D = Annual demand of the product S = Cost per purchase order Q = Order quantity Now substitute the given values in the formula to calculate the annual ordering cost. Annual ordering cost = (15000/110) × 75Annual ordering cost = $10227.28
d) What would be the most reasonable reorder point The most reasonable reorder point can be calculated as: Reorder Point (R) = Lead time demand + Safety stock R = L × D + Z × (σL × √D)L = Lead time = 2 days D = Annual demand = 15000Z = Z value for safety stock based on the desired service level.
Here, the service level is not given. Therefore, let’s assume the service level as 95% for calculating the Z value. Z value for the 95% service level is 1.645σL = Standard deviation of lead time demand. This value is not given. Therefore, let’s assume this value to be 10% of LDD Now substitute the given values in the formula to calculate the reorder point. R = 2 × 15000 + 1.645 × (0.1 × 2 × 15000)R = 30195.6 ~ 30196 units.
Therefore, the most reasonable reorder point is 30196 units. This problem is related to inventory management. The inventory management problem is to determine the optimal level of inventory to minimize the total inventory cost. The total inventory cost is the sum of the ordering cost and the holding cost.
In this problem, the company Matt’s Manufacturing & Customs stocks a special switch connector in his central warehouse for the sake of supplying the field service crew when they need them for customer breakdowns. The yearly demand for these connectors is 15000. The cost to place and process an order for more of these connectors is $75. Matt estimates his holding cost for this item to be $25 per unit.
Matt’s company operates 300 days per year, and the lead time promised (and observed) from the supplier of the switch connector is 2 days. Using the given data, we have calculated the economic order quantity (E.O.Q), the annual holding cost, the annual ordering cost, and the most reasonable reorder point. The economic order quantity (E.O.Q) is the order quantity that minimizes the total inventory cost. It is calculated using the formula E.O.Q = √((2DS)/(H)). In this problem, the E.O.Q is 110 units. The annual holding cost is the cost of holding inventory for a year. It is calculated using the formula Annual holding cost = (Q/2) * H * D/Q. In this problem, the annual holding cost is $1714.29.
The annual ordering cost is the cost of placing and processing an order. It is calculated using the formula Annual ordering cost = (D/Q) * S. In this problem, the annual ordering cost is $10227.28.The most reasonable reorder point is the inventory level at which the company should place an order for more units. It is calculated using the formula Reorder Point (R) = Lead time demand + Safety stock. In this problem, the most reasonable reorder point is 30196 units.
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1 Purchased Equipment for $300,000. Pay in 30 days. 2 Recorded 1 month of depreciation using SL. Salvage 10,000. Life 60 months. 3 Purchased a compressor (equip) for $100,000. Took out a loan for full amount. 4 Recorded depn, Units of prod. Life 2,000 hrs. $5,000 salvage. Used 300 hrs. 5 Purchased a press for $25,000. Cash 6 Recorded 1 month depn. $7,500 salvage. Used Double Declining Method. 5 yr life 7 Recorded revenue for the month of $120,000. Cash
1. The initial journal entry to record the purchase of equipment will be:
Equipment $300,000
Cash $300,000
2. Straight-line depreciation will be calculated as follows:
Annual Depreciation Expense = (Equipment Cost – Salvage Value) / Useful Life
$300,000 - $10,000 = $290,000
$290,000 ÷ 60 months = $4,833.33 per month
Depreciation Expense $4,833.33
Accumulated Depreciation $4,833.33
3. The initial journal entry to record the purchase of the compressor with a loan will be:
Compressor $100,000
Loan Payable $100,000
4. Units of production depreciation will be calculated as follows:
Depreciation per unit = (Equipment Cost – Salvage Value) / Total Units of Production
Depreciation Expense = Depreciation per unit x Units used
$100,000 - $5,000 = $95,000
$95,000 ÷ 2,000 hours = $47.50 per hour
$47.50 x 300 hours = $14,250
Depreciation Expense $14,250
Accumulated Depreciation $14,250
5. The initial journal entry to record the purchase of the press with cash will be:
Press $25,000
Cash $25,000
Double-declining balance depreciation will be calculated as follows:
Depreciation Rate = 2 ÷ Useful Life
Double-Declining Balance Depreciation Rate = Depreciation Rate x 2
Depreciation Expense for the First Year = (Equipment Cost – Accumulated Depreciation) x Double-Declining Balance Depreciation Rate
$25,000 x 40% = $10,000
Depreciation Expense $10,000
Accumulated Depreciation $10,000
6. Revenue for the month of $120,000 is recorded as follows:
Cash $120,000
Revenue $120,000
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Mary is willing to pay $20 for a hat that is $ 11 . Her consumer
surplus is =
Mary's consumer surplus is $9. This surplus contributes to Mary's overall satisfaction and economic well-being.
Consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the actual price they pay. In this case, Mary is willing to pay $20 for the hat, but it is priced at $11.
Therefore, Mary's consumer surplus is calculated as the difference between the maximum price ($20) and the actual price ($11):
Consumer Surplus = Maximum Price - Actual Price
Consumer Surplus = $20 - $11
Consumer Surplus = $9
Mary's consumer surplus represents the additional value or benefit she receives from purchasing the hat at a price lower than what she was willing to pay. It reflects the economic gain she experiences as a result of the transaction. Consumer surplus is a measure of consumer welfare and indicates the difference between the value a consumer places on a product and the price they actually pay. In this case, Mary's consumer surplus of $9 indicates that she perceives the hat to be worth $20 but is able to purchase it for only $11, resulting in a positive surplus.
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Cullumber Company’s general ledger showed $815 in the Supplies account on January 1, 2021. On May 31, 2021, the company paid $3,170 for additional supplies. A count on December 31, 2021, showed $965 of supplies on hand. Prepare the journal entry to record the purchase of supplies on May 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit May 31 enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Calculate the amount of supplies used in 2021. Supplies used $enter a dollar amount of supplies used Prepare the adjusting entry required at December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an account title for the adjusting entry on December 31 enter a debit amount enter a credit amount enter an account title for the adjusting entry on December 31 enter a debit amount enter a credit amount.
Since the company had supplies on hand at the end of the year, the balance in the Supplies account needs to be reduced to reflect the supplies used.
Journal entry to record the purchase of supplies on May 31, 2021
Date Account Titles and Explanation Debit Credit May 31 Supplies 3,170
Cash 3,170
Adjusting entry required at December 31, 2021
Supplies account balance on January 1, 2021 = $815
Supplies purchased on May 31, 2021 = $3,170
Supplies on hand on December 31, 2021 = $965
Supplies used during the year = Supplies available − Supplies on hand
Supplies available = Supplies on January 1 + Supplies purchased
= $815 + $3,170
= $3,985
Supplies used = Supplies available − Supplies on hand
= $3,985 − $965
= $3,020
To calculate the amount of supplies used in 2021, we first need to find the total supplies available. This is calculated as follows:
Supplies available = Supplies on January 1 + Supplies purchased
= $815 + $3,170
= $3,985
The amount of supplies used in 2021 is calculated by subtracting the supplies on hand at the end of the year from the total supplies available:
Supplies used = Supplies available – Supplies on hand
= $3,985 – $965
= $3,020
The amount of supplies used in 2021 is $3,020.
Adjusting entry on December 31, 2021
Date Account Titles and Explanation Debit Credit Dec. 31
Supplies expense 3,020
Supplies 3,020
The adjusting entry records the supplies used during the year.
This is done by debiting the Supplies expense account and crediting the Supplies account for the amount of supplies used during the year.
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A proposed project has fixed costs of $36,000 per year. The operating cash flow at 11,000 units is $76,000 a. Ignoring the effect of taxes, what is the degree of operating leverage? b. If units sold rise from 11,000 to 11,400 , what will be the increase in operating cash flow? c. What is the new degree of operating leverage?
The degree of operating leverage can be determined by the formula which is the contribution margin divided by the operating income.
Contribution margin = selling price - variable costs per unit Operating income = operating cash flow - fixed costs We can determine the contribution margin by subtracting the variable costs per unit from the selling price. The operating income can be found by subtracting the fixed costs from the operating cash flow.
To find the new degree of operating leverage, we can use the formula: DOL = Contribution Margin / Operating Income. Using the formulas derived from the previous question, we can solve for the contribution margin and operating income for 11,400 units sold. Contribution margin = selling price - variable costs per unit Contribution margin = 81,666.67 - 27,466.67Contribution margin = 54,200
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