Answer:
the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water.
Explanation:
The paradox of value also known as the diamond–water paradox stares that although water is more useful than diamond because it is needed for survival, diamonds are more expensive than water. This is so because the marginal value of a diamond is higher than the marginal value of water.
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Required informationUse the following information for the Exercises below.[The following information applies to the questions displayed below.]
Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2015, its Cash account shows an $11,589 debit balance. Del Gato Clinic's June 30 bank statement shows $10,555 on deposit in the bank.
a. Outstanding checks as of June 30 total $1,829.
b. The June 30 bank statement included a $16 debit memorandum for bank services.
c. Check No. 919, listed with the canceled checks, was correctly drawn for $467 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $476.
d. The June 30 cash receipts of $2,856 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.
1. Prepare the adjusting journal entries that Del Gato Clinic must record as a result of preparing the bank reconciliation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Prepare a bank reconciliation for Del Gato Clinic using the above information:
Answer:
a. No journal entry required
b. Miscellaneous expense A/c Dr $16
To Cash A/c $16
(service charge)
c. Cash A/c Dr $9 ($476 - $467)
To Utilities expense A/c $9
4. No journal entry required
2.) Kindly check attached picture
Explanation:
Kindly check attached picture
Elegant Limited sells restored classic cars. Most of its customers are private buyers who buy cars for themselves. However, some of them are investors who buy multiple cars and hold them for resale. All sales of Elegant Limited are for cash. Depict the association and cardinality for the sales of cars at Elegant Limited based on REA model.
Answer:
Elegant Limited
Depiction of the Association and Cardinality for the Sales of Cars based on the REA Model:
1. Association: This is about the relationships that exist among the economic elements involved in the REA model. They are Economic Resources, Economic Events, and Economic Agents. These elements interact during each business transaction in such interconnected processes that business transactions cannot be complete without any element.
For example, the economic resources during the sale of a car at Elegant Limited are 1) a car and 2) money. These are exchanged between Elegant Limited and the customer and vice versa. In the same light, an economic event takes place during the exchange of either a car or money. While a car is a physical resource (asset), money is a financial resource (asset). For each of these two events, the economic agents who must interact are the workers at Elegant Limited and the customer whether private buyers or investors.
2. Cardinality: This refers to the elements that are involved in the REA model. They are three as already described. They are Economic Resources, Economic Events, and Economic Agents. No business transaction is complete where any element is not present. So, these elements are cardinal in the relationship.
Explanation:
The REA model is an accounting system re-engineering model originally proposed by William E. McCarthy as a generalized accounting model. It contains the concepts of resources, events and agents (McCarthy 1982).
The model views accounting data collection as a system to collect data about the resources, events, and agents within business processes, thereby suggesting that the basic data collected should be about the resources, events, and agents involved in an exchange.
On October 1, Black Company receives a 10% interest bearing note from Reese Company to settle an $21,800 account receivable. The note is due in six months. At December 31, Black should record interest revenue of:
a. $0
b. $450
c. $900
d. $1,800
Answer:
At December 31, Black should record interest revenue of: $545
Explanation:
Black Company receives a 10% interest bearing note from Reese Company to settle an $21,800 account receivable.
The amount of the interest per year = 10% x $21,800 = $2,180
At December 31, following 3 months, the interest accrual = $2,180/12 x 3 = $545
Journal entries to record the interest accrual:
Debit Interest receivable $545
Credit Interest revenue $545
When firms in a perfectly competitive market face the same costs, in the long run they must be operating a. under diseconomies of scale. b. with small, but positive, levels of profit. c. at their efficient scale. d. where price is equal to average fixed cost.
Answer:
d. where price is equal to average fixed cost.
Explanation:
Firms involved in a perfectly competitive market face the same cost, they will theoretically make zero profit on the long run. This happen at the point where price is equal to average fixed cost.
ive years ago, NorthWest Water (NWW) issued $50,000,000 face value of 30-year bonds carrying a 14% (annual payment) coupon. NWW is now considering refunding these bonds. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NWW's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called. Refer to the data for NorthWest Water (NWW). What is the required after-tax refunding investment outlay, i.e., the cash outlay at the time of the refunding?
Answer:
the required after-tax refunding investment Outlay is $6,200,000
Explanation:
Given that:
NorthWest Water (NWW) issued $50,000,000 face value
Time of issuance = 5 years ago
Bond = 30
Annual coupon payment = 14%
Amortizing amount of floating costs on these bonds over the 30 - year life is $3 million
Also;The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market.
Call premium = 14%
NWW's marginal tax rate is 40%
The objective from the given data set is to find the required after-tax refunding investment outlay, i.e., the cash outlay at the time of the refunding.
Initial Outlay = After tax call premium + Floatation cost - Unexpensed float cost
Initial Outlay = [tex](0.14 *50,000,000) + (1 - 0.40)+ $3,000,000 - ($3,000,000)*(\dfrac{25}{30})*0.40[/tex]
Initial Outlay [tex]=4,200,000+ 3,000,000-1,000,000[/tex]
Initial Outlay = $6,200,000
Therefore ; the required after-tax refunding investment Outlay is $6,200,000
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 22% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?
a. $32.69
b. $26.57
c. $27.37
d. $28.97
e. $23.39
Answer:
Option B ,$26.57 is correct
Explanation:
The cost of equity =Rf+Beta*Mrp
Rf is the risk free rate of 3.00%
Beta of equity is 1.20
Mrp is the market risk premium which is 5.50%
Cost of equity=3.00%+(1.20*5.50%)=9.60%
Stock price =present value of dividends+present value of terminal value
D1=$1.25*(1+22%)/(1+9.6%)^1=$ 1.39
D2=$1.25*(1+22%)^2/(1+9.6%)^2=$ 1.55
D3=$1.25*(1+22%)^3/(1+9.6%)^3=$ 1.72
D4=$1.25*(1+22%)^4/(1+9.6%)^4=$ 1.92
terminal value=year 4 dividend/(r-g)
year 4 dividend=$1.25*(1+22%)^4= 2.77
r is the cost of equity of 9.6%
g is the dividend afer year 4 which is 0%
terminal value= 2.77/(9.6%-0%)=$ 28.85
present value of terminal value= 28.85/(1+9.6%)^4=$ 19.99
Total present values=$ 1.39+$ 1.72+$ 1.92 +$ 1.92 +$ 19.99 =$26.58
According to the question Option B ,$26.57 is correct
How to calculate of common stock?When The cost of equity = [tex]Rf+Beta "/times" Mrp[/tex]
After that, Rf is the risk free rate of 3.00%
then Beta of equity is[tex]1.20[/tex]
After that Mrp is the market risk premium which is 5.50%
So that, Cost of equity 3.00%+(1.20*5.50%)=9.60% = 9.60%
Then The Stock price is = present value of dividends + present value of terminal value
Now, D1 is = $[tex]1.25 "/times" (1+22[/tex]%[tex])/(1+9.6[/tex]%)^[tex]1=$ 1.39[/tex]
Then, D2 is = $[tex]1.25 "/times" (1+22[/tex]%[tex])^2/(1+9.6[/tex]%)^[tex]2=$ 1.55[/tex]
Then D3 is = $1.25 "/times" (1+22%)^3/(1+9.6%)^3=$ 1.72
After that D4 is = $[tex]1.25*(1+22[/tex]%[tex])^4/(1+9.6[/tex]%)^[tex]4=$ 1.92[/tex]
Then the terminal value is = year 4 dividend/(r-g)
Then year 4 dividend is = $[tex]1.25×(1+22[/tex]%)^4= 2.77
Then r is the cost of equity of 9.6%
Now, g is the dividend after year 4 which is 0%
After that terminal value is = 2.77/(9.6%-0%)=$ 28.85
Then present value of terminal value is = [tex]28.85/(1+9.6[/tex]%)^4=$ 19.99
Thus, The Total present values is =$ [tex]1.39+$ 1.72+$ 1.92 +$ 1.92 +$ 19.99[/tex] =$26.57
Therefore Option B is $26.57
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Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $254,800, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $40 $30 Gloves 100 60 a. Compute the break-even sales (units) for the overall enterprise product, E. units b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point
Answer:
a)Break-even sales in units= 9,100 units
b)The number of units of each products:
Bat= 3,640 units
Gloves= 5,460 units
Explanation:
The break-even sales in unit = total general fixed cost/Average contribution per unit
Average contribution per unit = (40%× (40-30) )+ (60%×(100-60) )=28
Break-even Sales = $254,800/$28=9100 units
Break-even sales in units= 9,100 units
The number of units of each products:
Bat = 40%×9100 =3,640 units
Gloves = 60%× 9,100 =5,460 units
Bat= 3,640 units
Gloves= 5,460 units
=
On September 1, 2021, Daylight Donuts signed a $188,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)
Answer:$3,760--- Interest payable at December 31, 2021.
Explanation:
Interest payable is current liability recorded on a firm's balance sheet that shows the amount of interest which a firm owes currently but has not yet paid as of the date recorded on the of the balance sheet.
For daylight donuts
September --- December = 4 months
interest payable within the four months= $188,000 X 6% X 4/12= $3,760
Daylight Donuts should report interest payable at December 31, 2021, in the amount of $3,760
Certain balance sheet accounts of a foreign subsidiary of the Rose Co. had been stated in U.S. dollars as follows: Stated at Current Rates Historical Rates Accounts receivable—current $ 280,000 $ 308,000 Accounts receivable—long term 140,000 154,000 Prepaid insurance 70,000 77,000 Goodwill 112,000 119,000 Totals $ 602,000 $ 658,000 If the subsidiary's local currency is its functional currency, what total amount should be included in Tulip's balance sheet in U.S. dollars? $658,000. $609,000. $616,000. $602,000.
Answer:
$602,000
Explanation:
Since the foreign currency is the functional currency in this case, what is required to be done is the translation of the balance sheet accounts, not a remeasurement of the accounts.
The guiding principle is that when the financial statement of subsidiary is prepared using functional currency, assets and liabilities should be translated using the current rates.
Since $602,000 is the total using the current in the question, the total amount that should be included in Tulip's balance sheet in U.S. dollars is therefore $602,000.
Computing materials variances:
D-List Calendar Company specializes in manufacturing calendars that depict obscure comedians. The company uses a standard cost system to control its costs. During one month of operations, the direct materials costs and the quantities of paper used showed the following:
Actual purchase price
$0175 per page
Standard quantity allowed for production
170,000 pages
Actual quantity purchased during month
200,000 pages
Actual quantity used during month
185,000 pages
Standard price per page
$0.17 per page
1. Total cost of purchases for the month
2. Materials price variance
3. Materials quantity variance
4. Net materials variance
Answer:
1. Total cost of purchases for the month
= actual purchases x actual price = 200,000 pages x $0.175 per page = $35,0002. Materials price variance
= (actual unit cost - standard unit cost) x actual quantity used = ($0.175 - $0.17) x 185,000 = $925 unfavorable3. Materials quantity variance
= (actual quantity used - standard quantity allowed) x standard price = (185,000 - 170,000) x $0.17 = $2,550 unfavorable
4. Net materials variance
= materials price variance + materials quantity variance = $925 + $2,550 = $3,475 unfavorableExplanation:
Actual purchase price $0.175 per page
Standard quantity allowed for production 170,000 pages
Actual quantity purchased during month 200,000 pages
Actual quantity used during month 185,000 pages
Standard price per page $0.17 per page
Which of the following is false?
a) Mail surveys are cheap but have low response rates.
b) Coverage error is when respondents give untruthful answers.
c) Focus groups are nonrandom but can probe issues more deeply.
d) Surveys posted on popular websites suffer from selection bias.
Answer:
b) Coverage error is when respondents give untruthful answers
Explanation:
Coverage error occurs when the target population isn't the population actually sampled.
Coverage error could be undercoverage or over coverage.
undercoverage is when the sampling population doesn't include all of the target population.
Over coverage is when some of the target population is over represented in the sample population.
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Answer:
b) Coverage error is when respondents give untruthful answers.
Explanation:
Coverage error is a form of bias in experiments, where the selected sample does not match with the population for whom the experiment is actually meant for. This problem could arise as a result of undercoverage or overcoverage of samples.
Undercoverage is a situation wherein the members of the earmarked population are not included in the sample. Overcoverage occurs when samples that are not from the intended population, are included in error or even included more than once.
Which is not an example of an intangible asset?
1_A trademark
2_A computer
3_A patent
4_A copyright
An intangible asset excludes a computer. Thus the correct answer is (2).
What is an intangible asset?An intangible asset is referred to as a thing that an individual is unable to see or touch. An intangible asset is a lack of physical appearance. One can not transfer them from one location to another.
One can able touch or see a personal computer so it is not an intangible asset. Therefore, option (2) is appropriate.
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Culture and Ethical Business PracticesThe business world is becoming increasingly global due to advances in technology and travel. This means that businesspeople must know how to navigate intercultural ethics, not just the ethics of their particular country. To better prepare for the ethical challenges of a global marketplace, you should broaden your cultural awareness and familiarize yourself with strategies that help you adhere to legal and ethical guidelines.Read the following passages.1. You have recently been told you are going on a business trip to Thailand. You want to schedule a meeting with your supervisor to discuss how she conducts business in an ethical manner while in Thailand. In order to prepare for the meeting, you make a list of questions you would like to ask.A. What is an example of a good question to ask in this meeting?B. What are the company policies when it comes to handling bribery?C. Is it customary in this country to take off your shoes before entering a home?D. What are the top three sights I should see?2. After solidifying an overseas deal with a large bottling company, the executive informs you that in order to expedite the signing of the materials, he will need an extra $10,000. How should you react to his request?A. Immediately judge the man as immoral and corrupt and end the business deal.B. Inform the executive that this extra $10,000 wasn’t in the original contract. Avoid assuming unethical behavior until you clarify what he is asking for in relation to the agreed-upon contract.C. Negotiate his request and offer $5,000.3. Rather than determining whether a culture has good or bad ethics, it is best to look for practical solutions to the cultural challenges of doing global business. Which of the following suggestions acknowledge different values and respect the need for moral initiative?
A. Find alternatives.B. Don’t rationalize shady decisions.C. Avoid transparency.D. Refuse business if it violates you basic values.E. Workforce Diversity: Benefits and Challenges4. As diversity in the workplace increases, interacting and communicating with your coworkers will present specific challenges and rewards. In order do successfully navigate today’s workplace, be sensitive to the diverse backgrounds of your coworkers.Read the following scenarios.5. In a company meeting on diversity in the workplace, the HR representative starts a discussion on how to be more sensitive toward the diverse backgrounds of the company’s employees. After the informative discussion, you want to know from the HR representative’s perspective why your company values diversity in its work environment. What would be the best response from the HR representative?A. Team members with different backgrounds come up with more effective problem-solving techniques, providing your company with a competitive advantage over other companies.B. Even though it is more expensive for the company to hire a diverse workforce, the people are worth it.C. The company doesn’t want to hear employees gripe about discrimination, so they hire workers with diverse backgrounds.6. As the leader of your workgroup, you want to encourage a positive working environment. You decide to make posters for the hallway with tips for improving communication between the diverse members of your group. How to always win an argument.
Answer: Please refer to Explanation
Explanation:
B. What are the company policies when it comes to handling bribery?
This is a good question to ask because it aims to find out how the company deals with a very important ethical issue which is that of bribery. Your supervisor needs to tell you how the company normally deals with bribery so that you can act appropriately and abide by the ethics of the company.
B. Inform the executive that this extra $10,000 wasn’t in the original contract. Avoid assuming unethical behavior until you clarify what he is asking for in relation to the agreed-upon contract.
You should tell the Executive that the sum of money he is requesting for was not in the original budget and inquire to know why he needs it so that you may know if it is something you can acquire. It is sometimes best to wait for an explanation first before rushing to conclusions and this is one of those times.
A. Find alternatives.
B. Don’t rationalize shady decisions.
D. Refuse business if it violates you basic values.
When dealing with other culture and you see that there are different values from the ones you are used to and therefore different ways of doing things, it is imperative that you find alternatives to your course if action that can still serve your purpose while not antagonizing the people.
Also very important to to avoid rationalizing shady deals because once you start you will find that UNETHICAL decisions are easy to engage in.
Also as much as you are in a different cultures, some behaviours will always be unethical, refusing business that violates your basic values shoeshowss Moral Initiative.
A. Team members with different backgrounds come up with more effective problem-solving techniques, providing your company with a competitive advantage over other companies.
As the saying goes, "two heads are better than one". This is very important in teams with diversity because different cultures and backgrounds have evolved differently and found out different ways to come up with solutions to problems with some being better than others. Having team members from various backgrounds brings that information together to chart a better path forward which can then give a Competitive Advantage.
Build on Similarities. Coexist Peacefully.
By posting this tip, you encourage team members to communicate well with each other by first finding similarities. Human beings regardless of culture can have similarities and from these we can see that we are not all that different. Once that is found out, it is easier to coexist peacefully.
Samantha, who is single and has MAGI of $28,000, was recently employed by an accounting firm. During the year, she spends $2,500 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,200 for tuition and $450 for books (which are not a requirement for enrollment in the course).
Assuming no reimbursement, how much can Samantha deduct for the:
a. CPA exam review course? $X
b. Law school expenses? $X
Answer:
a. CPA exam review course $0
b. Law school expenses $4,000
Explanation:
1a. CPA exam review course will be $0 because the IRS has disallowed any costs that will lead to qualifying for a different trade .
1b. The Law School expenses will be $4,000 . Based on section 222, Samantha is been limited to $4,000 of the tuition paid.
Therefore the balance of $650 is excess tuition $200 + $450 books which will not qualify under the regular education expense deduction due to the negative position of the IRS on law school costs.
________ can track customer satisfaction directly, measure repurchase intention and also gauge a consumer's willingness to recommend the company and brand to others.
A) Periodic surveys
B) Mystery shoppers
C) Customer loss rates
D) Customer focus statements
E) Sales summary reports
Answer:
A) Periodic surveys
Explanation:
The periodic survey is the survey which takes place after delivering the product and services to the customer. It can be in the form of customer feedback with respect to the satisfaction level, repurchase intention, worth of mouth, etc
By maximizing the customer satisfaction the company can able to achieve their sales targets that results into capture a maximum share in the market
Hence, the first option is correct
Perhaps the most significant federal statute specifically addressing cyber crime is the:________.
a. Uniform Trade Secrets Act.
b. Anticybersquatting Espionage Act.
c. Computer Fraud and Abuse Act.
d. Berne Convention.
Answer:
c. Computer Fraud and Abuse Act.
Explanation:
Computer Fraud and Abuse Act (CFAA) is a cyber security bill that was enacted in 1986 and is an amendment of of Comprehensive Crime Control Act of 1984.
The acts forbids a person to access a computer without proper authorisation or an excess of required authority.
Before this time cybercrime was prosecuted as mail and wire fraud. This was often inadequate.
Other provisions the act addresses are distribution of malicious code, denial of service attacks, and trafficking in passwords
Marshall Grocery Delivery Service reports the following information: Rate per hour of direct labor is: Labor rate per hour $ 20 Rate per hour of direct labor $ 25.80 Materials markup 23 % Target profit margin 20 % The materials markup for a job that will use 100 labor hours and $2,000 of materials is:
Answer:
$460
Explanation:
The following information was reported from Marshall Grocery delivery service report
Labor rate per hour= $20
Rate per hour= $25.80
Materials markup= 23%
Target profit margin= 20%
The material markup for a job that will use 100 labor hours and $2,000 of materials is calculated as follows
Materials markup= Materials × percentage
= $2,000×23/100
= $2,000×0.23
= $460
Hence the materials markup is $460
Elisha Levi believes that a flexible, customized approach to selling is best when dealing with highly complex products or services. She typically performs an in-depth study of a prospect's needs before developing a well-planned presentation. Levi obviously favors the
Answer: problem-solution
Explanation:
Here is the complete question:
Elisha Levi believes that a flexible, customized approach to selling is best when dealing with highly complex products or services. She typically performs an in-depth study of a prospect's needs before developing a well-planned presentation. Levi obviously favors the ___________ presentation method.
a. Memorized
b. Stimulus response
c. Problem-solution
d. Need satisfaction
e. Formula
The problem-solution presentation is a form of presentation that is flexible and also a customized approach whereby the presenter will give an in-depth analysis of the needs of the prospect. It should also be noted that the problem solution presentation requires a presentation that has been well-planned. This method is good for negotiations and complex products.
Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $12 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds. a Determine the shipping and handling activity cost to be allocated to each unit of product. Glasses $ Fine China $ Everyday dinnerware $ b Determine the total shipping and receiving costs to be allocated to the fine china if 3,100 boxes are shipped.
Answer:
a) Shipping and handling cost of each product:
Glasses = $ 24, China = $ 48, Everyday dinnerware = $ 72
b) Total shipping and receiving costs of 3,500 boxes of fine China is $148,800
Explanation:
a) Shipping and handling cost of each product:
Glasses = Weighs × Activity rate per lbs = 2 lbs × $ 12 = $ 24
China = Weighs × Activity rate per lbs = 4 lbs × $ 12 = $ 48
Everyday dinnerware = Weighs × Activity rate per lbs = 6 lbs × $ 12 = $ 72
b) Total shipping and receiving costs of 3,100 boxes of fine China
= 3100 boxes × Shipping and receiving cost each product
= 3100 × 48
= $ 148,800
Nate is a partner in a partnership that received $5,000 of interest income this year. Nate's share of the interest is $1,000, and he should report this income on his individual return as:
Answer:
Interest Income
Explanation:
Based on the described scenario it can be said that Nate should report this income on his individual return as Interest Income. This is the amount of interest that the individual has earned in a specific period of time. This is what Nate has made by collecting his share of the interest and should be reported as such since Income from flow-through entities retains its character when reported on individual returns.
The selection process for a school teacher's job requires the applicant to keep a class of thirty students engaged in a classroom activity for an hour. The candidate is evaluated by the interviewers during this period, and the activity plays a vital role in the selection process. This is an example of which of the following types of tests?A. Physical ability test
B. Personality test
C. Ability test
D. Paper-and-pencil test
E. Performance Test
Answer:
E. Performance Test
Explanation:
Based on the scenario being described in the question it can be said that this is an example of a performance test. These are simply tests in which an individual is observed performing the tasks/actions that are required of them. Their performance is evaluated based on a predefined guideline in order to rate their efficiency. Which is what the interviewer is doing to the candidates in order to find the best individual to hire as a teacher.
Fox Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,150 2 1,030 3 1,520 4 1,880 a. If the discount rate is 11 percent, what is the present value of these cash flows
Answer:
The answer is $4,221.77
Explanation:
Present value = Cash flow/(1+r)^n
where n is the number of years
Cash flow 1:
$1,150/1.11^1
=$1,036
Cash flow 2:
$1,030/1.11^2
=$835.97
Cash flow 3:
$1,520/1.11^3
=$1,111.41
Cash flow 4::
$1,880/1.11^4
=$1,238.39
Present Value of all the cash flows is
$1,036 + $835.97 + $1,111.41 + $1,238.39
=$4,221.77
Between 2015 and 2016, the country of North Grogolia experienced a growth rate of -1.4%. If nominal GDP had increased by 3.1% and the population growth was recorded at 0.7%, then calculate the annual inflation rate in North Grogolia. Give your answer to one decimal.
Answer: 3.8%
Explanation:
To calculate this you can use the Economic Growth Formula because price change is one of the components of the equation and as you may know, inflation is the change in Prices from one period to the next.
The Equation is,
Economic Growth = % Δ Nominal GDP – % Δ Prices – % Δ Population.
Making % Δ Prices the subject gives,
% Δ Prices = - Economic growth + % Δ Nominal GDP - % Δ Population
= - (- 1.4%) + 3.1% - 0.7%
= 1.4% + 3.1% - 0.7%
= 3.8%
The inflation rate is therefore 3.8%
City Foods, is a firm that is experiencing rapid growth. The firm just paid a dividend of $2.00 yesterday. They expect to see their dividend grow at a twenty percent rate for the next two years and then level out at a continuous six percent growth rate. City Food's required rate of return is twelve percent. What is the most you would pay for City Foods' common stock now
Answer:
The maximum that should be paid for the stock today is $45 per share.
Explanation:
To calculate the current share price or the maximum that should be paid for the stock today, we will use the dividend discount model approach.
The dividend discount model (DDM) estimates the value of a share/stock based on the present value of the expected future dividends from the stock. We will use the two stage growth model of DDM here as the growth in dividends of the stock is divided into two stages.
The formula for current price under two stage growth model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n +
[( D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n
Where,
g1 is initial growth rate
g2 is the constant growth rate
r is the required rate of return
So, the price of the stock today will be,
P0 = 2 * (1+0.20) / (1+0.12) + 2 * (1+0.20)^2 / (1+0.12)^2 +
[( 2 * (1+0.20)^2 * (1+0.06)) / (0.12 - 0.06)] / (1+0.12)^2
P0 = $45
Changes in reserve requirements to conduct monetary policy is generally not a good idea for the United States because:
A)it requires approval of Congress and this can take too long.
B)it takes a long time to work whereas other tools are much quicker.
C)this tool is powerful and makes it difficult for bank managers to plan for the future and manage funds as they like.
D)the United States is too large of a country to use this tool.
Answer: this tool is powerful and makes it difficult for bank managers to plan for the future and manage funds as they like.
Explanation:
Reserve requirements are the amount of money that a bank holds in its reserve to ensure that it can meet liabilities in the case of sudden withdrawals. The reserve requirement is a tool that is used by the central bank of a country to either increase or decrease the money supply in the economy and also influence interest rates.
The changes in reserve requirements to conduct monetary policy is not a good idea for the United States because it is a powerful tool which makes it hard for bank managers to make future plans and manage funds as they want. In a situation whereby small variation in the reserve ratio brings about huge changes in an economy, the changes are positive and okay but in a situation whereby they bring about negative effect, it will be hard to face such scenarios.
A firm has issued 40,000 shares of stock whose current price is $81 per share. Shareholders expect an annual return of 15%. The firm also has a two-year loan of $1,800,000 at 6.4% annual interest. It has also issued 8,500 bonds with a face value of $1,000 each, with 15 years left to maturity, semi-annual compounding, and a coupon interest rate of 5%. The bonds are currently worth (have a current market price of) $1,100 each on the market.(a) Using market values for its debt and equity, calculate the firm's weighted-average cost of capital (WACC) before taxes. Round to tenths place (e.g., 12.8%) (b) Assume a tax rate of 38% applies. Calculated the WACC after accounting for the impact taxes have with same rounding)
Answer:
(a) WACC before tax is 7.43%
(b) WACC after tax is 5.89%
Explanation:
WACC = Value of equity * cost of equity/ (Value of equity & debt) + Value of debt * cost of debt/ (Value of equity & debt)
Value of equity = number of share * current price = 40,000 * $81 = $3,240,000
Market value of bond = $1,100 * 8,500 = $9,350,000
Market value of equity & debt = $3,240,000 + $1,800,000 + $9,350,000 = $14,390,000
(a) WACC before tax = 3,240,000 * 15%/ 14,390,000 +1,800,000 * 6.4%/ 14,390,000 + 9,350,000 * 5%/ 14,390,000 = 7.43%
(b) If tax rate is 38%, then cost of debt is changed as below:
Cost of two-year loan = 6.4%* (1-38%) = 3.97%
Cost of bond = 5% * (1-38%) = 3.1%
WACC after tax = 3,240,000 * 15%/ 14,390,000 +1,800,000 * 3.97%/ 14,390,000 + 9,350,000 * 3.1%/ 14,390,000 = 5.89%
Ans:
5. Abena travelled 40% of the distance of her trip alone, went another 35 miles with Saralyn,
and then finished the last half of the journey alone. How many miles long was the journey?
Ans:
miles
6. The mean of the data set (9,5,7, 2, x} is twice the data set (8,x, 4,1,3}. What is (y - x)2?
Ans:
UGRC 120: Numeracy Skills
Page 5 of 8
Answer:
5) 350 miles
Explanation:
5)
40% + 35 miles = 50%
=> 50% - 40% = 35 miles = 10%
=> 100% = 35 * (100% / 10%) = 35 * 10 = 350 miles
Godcare, an insurance firm based in California, had difficulties expanding their operations to Asian markets as most of their target countries had strict regulations on transferring the details of the customers among the different branches of the firm. The company had to obtain an approval from its customers before sharing their personal information with its branches in other countries. Which of the following barriers is most likely to have affected the services of Godcare in the given scenario?a. Protectionismb. Control on transborder data flowsc. Protection of intellectual propertyd. Cultural requirements for adaptatione. Language translation barriers
Answer:
The correct answer is: b. Control on transborder data flows.
Explanation:
Control on transborder data flows was the barrier that probably affected Godcare services in the scenario above.
The insurance company had this barrier of control of transborder data when expanding its business to Asian countries with stricter regulations on the transfer of customer data.
Generally, these government restrictions arise to protect against possible abuses and invasions of privacy, which meant that the company needed the approval of each customer to share their personal information with its branches in other countries.
Coronado Company's record of transactions concerning part X for the month of April was as follows.
Purchases Sales
April 1 (balance on hand) 420 0 $7.30 April 5 620
4 720 7.45 12 520
11 620 7.74 27 1,440
26 520 8.18
30 520 8.47
Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost. (Round final answers to 0 decimal places, e.g. 6,548.)
Answer:
1.FIFO 5,631.4
2.LIFO 7,685
3.8.8542 per unit
Explanation:
Coronado Company's
1)First-in, first-out (FIFO)
(520×8.47+ 150×8.18)
= 4,404.4+1,227
= 5,631.4
2)Last-in, first-out (LIFO)
(420×7.30+ 620×7.45)
= 3,066+4,619
= 7,685
3.Cost of goods available for sale
Date Transactions Units ×Rate =Total
Apr-01 Beginning inventory 420 ×$7.30 =$3,066
Apr-04 Purchase 720×$7.45 =$5,363
11-Apr Purchase 620 ×$7.74 =$4,798.8
18-Apr Purchase 520×$7.81 =$4,061.2
26-Apr Purchase 920 ×$8.18= $7,525.6
30-Apr Purchase 520 ×$8.47 $4,404.4
Total: 3,300 $29,219
720+620+520+920+520=3,300
$3,066+5,363+4,798.8+4,061.2+7,525.6+4,404.4 =29,219
Average cost per unit =
Total cost of goods available for sale / Units available for sale
Hence:
$29,219 / 3,300
=8.8542 per unit
4. You may think of your college or university as an organization that offers a line of different educational products. Assume that you have been hired as a marketing consultant by your university to examine and make recommendations for extending its product line. Develop alternatives that the university might consider: a. Upward line stretch b. Downward line stretch c. Two-way stretch d. Filling-out strategy
Answer:
c. Two-way stretch
Explanation:
For the extension of the product line, the marketing consultant will consider the upwards line stretch as to being In the new products and raise the competition. The two-way stretch can be considered as it allows for the price flexibility to meet both the lower and higher ends customers. A product line extension is a process by which the companies can go beyond their lengths to satisfy the refined segment of the market. It may be done horizontally and vertically.