Hotel management is a field of business and study, that tends itself to the operation aspects of a hotel as well as wide range of affiliated topics such as Accounting, administration, finance, information systems, human resources management, public relations and other more.
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A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 21,200 units of output each month. However, it has an absolute maximum output capability of 26,000 units per month, and can produce as little as 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 14,360 units in October, what is the capacity utilization rate in October for this factory
Answer:
Capacity utilization rate in October for this factory is 67.74%
Explanation:
Units produced in October = 14,360 units
Units production in most efficient way = 21,200 units
Capacity utilization rate in October = 14,360 / 21,200
Capacity utilization rate in October = 0.677359
Capacity utilization rate in October = 67.74%.
Indicate the effect of each transaction during the month of October 20Y8 and the balances for the accounting equation after all transactions have been recorded. No beginning balances exist in the accounts. An accounting equation has been provided. Opened a business bank account for Jones, Inc., with an initial deposit of $45,000 in exchange for common stock. Paid rent on the office building for the month, $2,000. Received cash for fees earned of $5,000. Purchased equipment, $7,000. Borrowed $20,000 by issuing a note payable. Paid salaries for the month, $1,000. Received cash for fees earned of $8,000. Paid dividends, $3,000. Paid interest on the note, $100.
Answer:
For better visualization, the answer is presented in a table
[tex]\left[\begin{array}{ccccc}&Assets&=&Liabilities +&Equity\\1&45,000&=&&45,000\\2&-2,000&=&&-2,000\\Bal.&43,000&=&0&43,000\\3&5,000&=&&5,000\\Bal.&48,000&=&0&48,000\\4&&=&&\\Bal.&48,000&=&0&48,000\\5&20,000&=&20,000&\\Bal.&68,000&=&20,000&48,000\\6&-1,000&=&&-1,000\\Bal.&67,000&=&20,000&47,000\\7&8,000&=&&8,000\\Bal.&75,000&=&20,000&55,000\\8&-3,000&=&&-3,000\\Bal.&72,000&=&20,000&52,000\\9&-100&=&&-100\\Bal.&71,900&=&20,000&51,900\\\end{array}\right][/tex]
Procedure details described below:
Explanation:
Opened a business bank account for Jones, Inc., with an initial deposit of $45,000 in exchange for common stock.
The cash is an asset for the company And Jones Is the Owner thus, asset and equity increase by 45,000
Paid rent on the office building for the month, $2,000.
The rent is an expense is an incurred cost to continue the operations of the business It decreases the equity and asset (cash used to pay the rent)
Received cash for fees earned of $5,000.
The fees are revenue from the business operations this is a realized gain, therefore, increases equity. Also, Assets increase as cash is an asset.
Purchased equipment, $7,000.
There is no change in the quantities but, the composition of the asset did change. Cash decrease while equipment increase.
Borrowed $20,000 by issuing a note payable.
The note payable is a future obligation to pay. It is a liability for the company assumed in exchange for an asset (cash)
Paid salaries for the month, $1,000.
Like rent, this is an incurred cost(expense) It decreases Equity also, assets as we use cash to pay it.
Received cash for fees earned of $8,000.
Exactly like the previous time, a realized gain generates an increase in equity and assets.
Paid dividends, $3,000.
The dividends are paid to the company's owners thus, the cash leaves the company into the owner's pocket. Both, assets and equity decrease (as there are fewer assets available for the owners to take)
Paid interest on the note, $100.
The interest also is an incurred cost thus, like salaries and rent expense we decrease equity and assets.
In a simple CAPM world, which of the following statements is/are correct?
I. All investors will choose to hold the market portfolio, which includes all risky assets in the world
II. Investors' complete portfolio will vary depending on their risk aversion
III. The return per unit of risk will be identical for all individual assets
IV. The market portfolio will be on the efficient frontier and it will be the optimal risky portfolio
a. I, II and III only
b. I, II, III and IV
c. II, III and IV only
d. II and IV only
e. I, III and IV only
Answer: I, II, III, IV
Explanation:
CAPM is used for pricing of risky securities and also for the generation of expected returns for an asset given the risk involved with regards the assets and the cost of capital
In a simple CAPM world, the correct statements are:
I. All investors will choose to hold the market portfolio, which includes all risky assets in the world
II. Investors' complete portfolio will vary depending on their risk aversion
III. The return per unit of risk will be identical for all individual assets
IV. The market portfolio will be on the efficient frontier and it will be the optimal risky portfolio
Therefore, I, II, III, IV is the best option.
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Answer:
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The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: Amount Sales $ 150,000 Selling price per pair of skis $ 750 Variable selling expense per pair of skis $ 50 Variable administrative expense per pair of skis $ 10 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 20,000 Beginning merchandise inventory $ 30,000 Ending merchandise inventory $ 40,000 Merchandise purchases $ 100,000 Required: 1. Prepare a traditional income statement for the quarter ended March 31. 2. Prepare a contribution format income statement for the quarter ended March 31. 3. What was the contribution margin per unit?
Answer:
Results are below.
Explanation:
First, we need to calculate the cost of goods sold:
COGS= beginning finished inventory + cost of goods purchased - ending finished inventory
COGS= 30,000 + 100,000 - 40,000
COGS= 90,000
Now, the number of skis sold:
Units sold= 150,000/750= 200 units
Traditional income statement:
Sales= 150,000
COGS= (90,000)
Gross profit= 60,000
Total selling expense= (50*200 + 20,000)= (30,000)
Total administrative expense= (10*200 + 20,000)= (22,000)
Net operating income= 8,000
Contribution format income statement:
Sales= 150,000
Total variable cost= (90,000 + 50*200 + 10*200)= (102,000)
Contribution margin= 48,000
Total fixed selling expense= (20,000)
Total fixed administrative expense= (20,000)
Net operating income= 8,000
1. Traditional income statement for the quarter ended March 31 is $8,000.
2. Contribution format income statement for the quarter ended March 31 is $8,000.
3. The contribution margin per unit is 240.
Income statement:1. Alpine House, Inc., Traditional Income Statement
Sales revenue $150,000
Cost of goods sold $90,000
($30,000 + $100,000 - $40,000)
Gross margin $60,000
Selling and administrative expenses:
Selling expenses $30,000
[(150,000/750×50)+$20,000)]
Administrative expenses $22,000
[(150,000/750×10)+$20,000)]
Total selling and administrative expenses $52,000
Net operating income $8,000
2. Alpine House, Inc., Contribution format Income Statement
Sales revenue $150,000
Variable expenses:
Cost of good sold sold $90,000
Selling expenses $10,000
Administrative expenses $2,000
Total variables expenses $102,000
Contribution margin $48,000
Fixed expenses:
Selling expenses $20,000
Administrative expenses $20,000
Total fixed cost $40,000
Net operating income $8,000
3. Selling price per unit 750
Variable cost per unit 510
(102,000/200)
Contribution margin per units 240
Inconclusion traditional income statement for the quarter ended March 31 is $8,000, contribution format income statement for the quarter ended March 31 is $8,000, and the contribution margin per unit is 240.
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Which of the following would most likely shift the production possibilities curve inward? an increase in the number of hours factories are in use a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time an increase in the production of capital goods technological progress
Answer: a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time.
Explanation:
The production possibilities curve (PPC) is simply a graph that shows every different combinations of output that an economy can produce while using its resources and technology.
An inward shift of the PPC means that there's reduction in the production level. The option that'll most likely shift the production possibilities curve inward us when there's a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time.
Which of the following are examples of positive externalities?
a. You are a bird watcher, and your neighbor puts up birdhouses and gardens to attract birds.
b. Your roommate is a smoker, but you are a nonsmoker.
c. Investments in private education raise your country's standard of living.
Answer:
Option “a” and “c”.
Explanation:
Option “a” and “c” are the positive externalities because the positive externalities are the ones that benefit to others. The activity of one person benefits the other person. So in the option, “A” neighbor put the birdhouses that will attract the birds that means another person who is a bird watcher will be benefited. Secondly, the investment in education will increase the country's GDP and the many people will be benefited from the education.
Maxene Raices discusses how Wilson Learning runs training with virtual teams, where team members may be spread out all over the globe. One way to teach in such a team would be ________, where online technologies and systems are used for training, including tools such as blogs, chat rooms, and 3-D simulations.
Answer:
e. Web 2.0 learning
Explanation:
Since in the question it is mentioned that for teaching a team what technology is required through which online teaching and the system that are used and involved various tools like chat rooms, 3-D simulations should be Web 2.0 learning as it depend on the online software where the user can learn to edit the document, storage of the content. In this, the virtual team is required than can gained from this method
Therefore the same is to be considered
Sexual Violence Awareness (Campus SaVE Act):
Final Assessment
QUESTION 3 OF 15
Which is NOT a strategy for defusing potentially harmful
situations?
1
distract
2
direct
3
deactivate
4.
delegate
Answer: distract
Explanation:
Distraction is not a strategy for defusing potentially harmful situations. Option (a) is correct.
What do you mean by Strategy?Strategy is a plan for achieving a long-term or overall goal.
Hollaback's "5 D's" (Direct, Distract, Delay, Delegate, Document) are different methods that bystanders can use to support someone who is being harassed, emphasize that harassment is not okay, and demonstrate to people in your life that they too have the power to make our communities and workplaces safer.
It teaches students, faculty, and staff how to intervene by employing the three Ds: Direct, Distract, and Delegate. The three D's provide strategies for intervening in potentially dangerous situations.
Therefore, Option (a) is correct.
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Ray Schultz, a highly competent employee, had been overlooked for a promotion twice in the span of six months and he recently filed a claim for discrimination with the EEOC. Ever since he filed the discrimination suit, Ray has been suffering from hostility in the workplace. His schedules were changed without notifying him and he received an unfair performance review from his superiors. This is an example of _______.
Answer: retaliation
Explanation:
Ray Schultz, a highly competent employee, had been overlooked for a promotion twice in the span of six months and he recently filed a claim for discrimination with the EEOC. Ever since he filed the discrimination suit, Ray has been suffering from hostility in the workplace. His schedules were changed without notifying him and he received an unfair performance review from his superiors. This is an example of retaliation.
Retaliation occurs the employer of a particular company takes an adverse action against a worker because the worker file a charge of discrimination with EEOC.
Net cash flow from operating activities for 2021 Altoona Corporation was $300,000. The following items are reported on the financial statements for 2021: Depreciation and amortization $24,000 Cash dividends paid on common stock $10,000 Increase in accounts receivable $20,000 Based only on the information above, Altoona’s Net Income for 2021 was:
Answer:
Altoona’s Net Income for 2021 was: $296,000
Explanation:
The Net Income can be determined by reconciling the Net cash flow from operating activities to Operating Profit as follows :
Net cash flow from operating activities $300,000
Less Depreciation and amortization ($24,000)
Add Increase in accounts receivable $20,000
Operating Profit $296,000
Notes :
Reconcile the non-cash items previously added or deducted from Net cash flow from operating activities and any changes to Working Capital accounted for in determination of Net cash flow from operating activities .
Shire Computer’s predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $728,000 of overhead costs and $560,000 of direct labor cost for the year. During March, Shire began and completed Job 13-56. 1. What is the predetermined overhead rate for the year? 2. Use the information on the following job cost sheet to determine the total cost of the job.
Answer:
Results are below.
Explanation:
We weren't provided with information regarding Job 13-56
To calculate the predetermined overhead rate, we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 728,000 / 560,000
Predetermined manufacturing overhead rate= $1.3 per direct labor dollar
To allocate overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Which of the following theorems explains the relationship between interest rates and bond prices? For a given change in interest rates, the prices of higher-coupon bonds will change more drastically than the prices of lower-coupon bonds. For a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds. Bond prices are directly related to interest rate movements. For a given change in interest rates, the prices of short-term bonds will change more drastically than the prices of long-term bonds.
Answer:
For a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds.
Explanation:
A bond can be defined as a fixed income instrument that firms use as a source of longer-term funding or loans.
The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.
In Economics, bonds could either be issued at discount or premium.
Hence, a bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance. Also, a bond that is being issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.
Generally, bond price is inversely proportional to its interest rate, thus, when interest rates are high, bond prices would be low and when interest rates are low, bond prices are high.
The theorem that best explains the relationship between interest rates and bond prices is that for a given change in interest rates, the prices of long-term bonds will change more drastically than the prices of short-term bonds because long-term bondholders are liable to higher rate of interest rate risks than the short-term bondholders.
Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the following questions. Assume that the base year is 2015. Good 2015 Price 2015 Quantity 2016 Price 2016 Quantity A $2 250 $3 200 B $3 300 $2 400 C $4 400 $5 500 What was the growth rate of real gross domestic product (GDP) between the two years
Answer:
20%
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has
Real GDP in 2015 = ( $2 x 250) + ($3 x 300) + ($4 x 400) = $3000
Real GDP in 2016 = ( $2 x 200) + ($3 x 400) + ($4 x 500) = $3600
Growth rate in real GDP = $3600 / $3000 - 1 = 0.2 = 20%
An inexperienced accountant for Blue Spruce Corp. showed the following in the income statement: income before income taxes $436,000 and unrealized gain on available-for-sale securities (before taxes) $85,500. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 32% tax rate. Prepare a correct statement of comprehensive income.
Answer:
Blue Spruce Corp.
Statement of Comprehensive Income
Income before income taxes $436,000
Less: Income Tax $139,520
($436,000 * 32%)
Net Income $296,480
Other comprehensive income (loss):
Unrealized gain on available-for-sale $58,140
securities, net of tax ($85500*68%)
Total Comprehensive Income $354,620
The agency problem wherein ownership and control of a corporation are separate is associated with:_______
Answer: The shareholder model of corporate governance
Explanation:
The agency problem is typically a conflict of interest in a relationship whereby a party is expected to act in the best interest of the other party. It should be noted that in corporate finance, the agency problem is a conflict of interest that takes place between the management of the company and the stockholders.
The agency problem wherein ownership and control of a corporation are separate is associated with the shareholder model of corporate governance.
Flyaway Travel Company reported net income for 2021 in the amount of $90,000. During 2021, Flyaway declared and paid $2,125 in cash dividends on its nonconvertible preferred stock. Flyaway also paid $10,000 cash dividends on its common stock. Flyaway had 40,000 common shares outstanding from January 1 until 10,000new shares were sold for cash on April 1, 2021. What is 2021 basic earnings per share
Answer:
$1.85
Explanation:
Fyaway travels reported a net income of $90,000 for the year 2021
During 2021 they declared and paid a cash dividend of $2,125
They also paid $10,000 as cash dividend in common stock
Flyway has 40,000 shares outstanding
Therefore the 2021 basic earning per share can be calculated as follows
$90,000-2,125
= $87,875
40,000 shares+(10,000 shares×9/12)
40,000 shares +(10,000×0.75)
40,000+7500
= 47,500
87,875/47,500
= $1.85
Hence the basic earning per share for 2021 is $1.85
Andrew has been asked to estimate future cash flows for his company. He is having a hard time remembering how to estimate future cash flows from his accounting classes. Where should Andrew look to find this information, and which level of the conceptual framework will his new knowledge apply to
Answer: Andrew should look to find the information in SFAC No. 7. The level of the conceptual framework that his new knowledge will apply to is level 3.
Explanation:
From the question, we are informed that Andrew has been asked to estimate future cash flows for his company and that he is having a hard time remembering how to estimate future cash flows from his accounting classes.
Andrew should look to find the information in SFAC No. 7. The level of the conceptual framework that his new knowledge will apply to is level 3.
1. Descriptive statistics ________. quickly describe large amounts of data can predict future stock returns with surprising accuracy help statisticians understand non-numeric information, like colors refer mainly to patterns that can be found in data 2. A 15% return on a stock means that ________. 15% of the original purchase price of the stock returns to the seller at the end of the year 15% of the people who purchased the stock will see a return the stock is worth 15% more at the end of the year than at the beginning the stock has lost 15% of its value since it was originally sold 3. A stock purchased on January 1 cost $4.35 per share. The same stock, sold on December 31 of the same year, brought in $4.75 per share. What was the approximate return on this stock
Answer:
1. quickly describe large amounts of data
2. the stock is worth 15% more at the end of the year than at the beginning
3. 9.2%
Explanation:
Descriptive statistics helps to quickly describe large amounts of data because it simply involves using certain measurement tools to describe the data seen such that patterns emerge that will help in analyzing the data. Examples include, frequency tables and measures of variation like range and standard deviation.
When a stock has a 15% return, it means that the owner is getting 15% more than the amount that the stock cost them therefore showing that the stock is worth 15% more at the end of the year than at the beginning.
The return on the stock is;
= (4.75 - 4.35) / 4.35
= 9.2%
Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to:
Answer:
Predetermined OH rate is $37.09
Explanation:
Firstly, we need to get the value for predetermined Fixed OH rate.
Predetermined Fixed OH rate = Estimated Fixed overhead / Estimated machine hours
= $2,347,090 / 79,000
= $29.71 per machine hour
Predetermined OH rate = Predetermined Fixed OH rate + Predetermined Variable OH rate
= $29.71 + $7.38
= $37.09
Therefore, the predetermined OH rate is $37.09
Martin operates a law practice as a sole proprietorship using the cash method of accounting. Martin incorporates the law practice and transfers the following items to a new, solely owned corporation.Adjusted BasisFMVCashEquipmentAccounts receivableAccounts payable (deductible expenses)Note payable (on equipment)$10,000 80,000 0 0 50,000$ 10,000 100,000 120,000 60,000 50,000Martin must recognize a gain of ________ and has a stock basis of ________:
Answer: $0; $40,000
Explanation:
The accounts payable is the money that a business or company owes its suppliers. It should be noted that on the balance sheet of a company, the accounts payable is a liability.
But under Sec 357(c), accounts payable are regarded as liabilities as the payable payment result in a deduction.
From the information given in the question, the stock basis will be equal to the addition of the cash basis and the equipment basis minus the liability transferred. This will be:
= $10,000 + 80,000 - $50,000
= $40,000
The primary objective of financial reporting is to provide information:___________.
a. About a firm’s management teamb. Useful to capital providersc. Concerning the changes in financial position resulting from he income-producing efforts of the entityd. About a firm’s financial and investing activities
Answer:
b. Useful to capital providers.
Explanation:
Financial reporting can be defined as the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.
The objective of financial reporting include all of the following to provide information that:
1. Is useful to those making investment decisions. This information would help creditors to determine whether they should lend to a client or not; or assist investors in deciding whether they should invest in a business or not.
2. Is useful to those lending out money to business entities. When investors and creditors are well furnished with financial information about an organization, they would be able to assess the amounts of cash, timing, and uncertainty of cash flows from dividends or interest.
3. Is useful to creditors in making decisions about providing resources to business entities.
Hence, the primary objective of financial reporting is to provide information useful to capital providers.
Additionally, financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining financial accounting and reporting standards for general guidance of individuals or capital providers such as investors, issuers and auditors.
Harrison Inc. applies overhead based on machine hours. Harrison reports the following for the year just ended: Budgeted overhead for the year $500,000 Budgeted machine hours 25,000 Actual overhead for the year $505,000 Actual machine hours 24,000 What is the amount of over- or under-applied overhead for the year
Answer:
idfk
Explanation:
Gibson Company makes a product that sells for $33 per unit. The company pays $24 per unit for the variable costs of the product and incurs annual fixed costs of $84,600. Gibson expects to sell 21,600 units of product. Required Determine Gibson’s margin of safety expressed as a percentage.
Answer:
Margin of safety ratio= 0.5648= 56.48%
Explanation:
Giving the following information:
Selling price= $33
Unitary variable cost= $24
Fixed costs= $84,600
Units sold= 21,600
First, we need to calculate the break-even point in units:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 84,600 / (33 - 24)
Break-even point in units= 9,400 units
Now, the margin of safety:
Margin of safety ratio= (current sales level - break-even point)/current sales level
Margin of safety ratio= (21,600 - 9,400)/21,600
Margin of safety ratio= 0.5648= 56.48%
Foreign tourists have been visiting the Dogon for decades. As time goes by more and more Dogon perform with their art in order to earn an income from the tourist trade. This has completely changed the context in which Dogon art is made, used, and understood. What could some of the social, cultural, global, and economic benefits of this change be
Explanation:
There may be several social, cultural, global and economic benefits from tourism.
For the Dogon, the attraction of foreign tourists may imply greater recognition of their art and therefore the benefit of achieving through tourism the benefits of greater appreciation of their cultural heritage, strengthening the Dogon society and preserving their culture, in addition to the tourism encourages income generation for dogon citizens that promotes greater economic development for the country and greater global recognition.
Which is a possible benefit of having a good credit history?
O getting a high interest rate on a credit card offer
O obtaining a low interest rate on a loan
obtaining a savings account
O having a paycheck garnished
Mark this and return
Save and Exit
Answer:
B. obtaining a low interest rate on a loan
Explanation:
Answer:
b
Explanation:
got it right on test
The cash flows have a present value of 0. Compute the value of n, assuming a 10% interest rate compounded annually?Year Cash Flow Amount 0 0 1 1 2 1 --- 1 n-2 1 n-1 1 n 1 n -35.95
Answer:
The value of n is 16
Explanation:
Note: Organized table is as attached
Present Worth of Cash-inflow = Present worth of Cash Outflow
$1 [(1+i)^n -1 / i(1+i)^N] = $35.95[1 / (1+i)^n]
$1 [ (1+0.10)^n - 1/ 0.10(1+0.10)^n] = $35.95[ 1 / (1+0.10)^n]
$1 [ (1.1)^n - 1 / 0.10(1.1)^n] = $35.95 [1/(1.1)^n]
Let (1.1)n be x
[x-1/x] = [$35.95 * 0.10 / $1] * [1/x]
[x-1/x] = 3.595[1/x]
x - 1 = 3.595
x = 3.595 + 1
x = 4.595
(1.1)^n = 4.595
Take log on both side
nlog (1.1) = log (4.595)
n(0.041392685) = 0.662285515
n = 0.662285515 / 0.041392685
n = 16.000062
n = 16
Thus, the value of n is 16
Go to www.federalreserve.gov/releases/h6/Current/ to access the information. 1. Answer these questions about the money supply. a. Differentiate between M1 and M2 b. What has been the growth rate in M1 and M2 over the last twelve months? c. From what you know about the state of the economy, does this seem expansionary or restrictive? Why?
Explanation:
Note, M1 and M2 represents the value of the United States money supply.
According to information found on the Federal Reserve website, the growth rate in M1 and M2 over the last twelve months for
M1= 38.1
M2= 23.3
They are expansionary considering the effect of the pandemic on the economy.
Tasty Ice Cream is a year-round take-out ice cream restaurant that is considering offering an additional product, hot chocolate. Considering the additional machine it would need plus cups and ingredients, it estimates fixed costs to be $204 per year and the variable cost to be $0.26. If it charges $1.01 for each hot chocolate, how many hot chocolates does it need to sell in order to break even
Answer: 272 hot chocolates
Explanation:
Assume the quantity sold is x.
Fixed cost = $204
Variable cost = $0.26x
Sales = $1.01x
Breakeven point is where profits are $0.
1.01x - 0.26x - 204 = 0
0.75x -204 = 0
0.75x = 204
x = 272 hot chocolates
Springfield mogul Montgomery Burns, age 80, wants to retire at age 100 so he can steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw $500 million at the beginning of each year for 10 years from a special off-shore account that will pay 18% annually. In order to fund his retirement, Mr. Burns will make 20 equal end-of-the-year deposits in this same special account that will pay 18% annually. How large of an annual deposit must be made to fund Mr. Burns retirement plans
Answer:
Springfield mogul, Montgomery Burns
How large of an annual deposit must be made to fund Mr. Burns retirement plans:
= $94,644,751.67
Explanation:
a) Data and Calculations:
Age of Mr. Burns now = 80 years
Retirement age = 100 years
Annual withdrawal at the beginning of each year for 10 years = $500 million
Special offshore account pays interest = 18% annually
Investment for funding retirement:
Deposits = 20 equal end-of-the year deposits in the same special offshore account above.
b) Calculation of Future value of annual deposit after 20 years:
FV (Future Value) $13,877,572,093.01
PV (Present Value) $2,651,510,914.01
N (Number of Periods) 10.000
I/Y (Interest Rate) 18.000%
PMT (Periodic Payment) $500,000,000.00
Starting Investment $0.00
Total Principal $5,000,000,000.00
Total Interest $8,877,572,093.01
c) Calculation of Annual Deposit to reach the future value target of $13,833,567,810.87:
FV (Future Value) $13,877,567,810.87
PV (Present Value) $506,609,362.98
N (Number of Periods) 20.000
I/Y (Interest Rate) 18.000%
PMT (Periodic Payment) $94,644,751.67
Starting Investment $0.00
Total Principal $1,892,895,033.42
Total Interest $11,984,672,777.45
d) Mr. Burns will need to contribute $94,644,751.67 at the end of each period to reach the future value of $13,877,572,093.01. Both the future value of deposits of $13,877,567,810.87 and the annual periodic payment of $94,644,751.67 are determined using online financial calculator.
