Answer:
functional.
Explanation:
The functional value can be perceived by the customer as a type of value that is related to the benefits and utility that a good or service will bring to satisfy his needs.
Therefore, improving the quality of the goods and services produced will increase their functional value.
Increasing the quality of goods and services may be a relevant competitive strategy for a company to achieve market advantages, since in the purchase decision process, the consumer will analyze the options on the market and choose the one that best satisfies their needs in relation to functional value of the product or service.
10. Why is it important to include a cover message with all résumés you send, even if you send them by e-mail? (L.O. 6) g
Answer:
When sending a resume even if by e-mail, there are reasons why one should always include a cover letter with some of them being;
Introduction - This is the most important. You need to introduce yourself in the cover letter so that the recruiter may know more about the person sending the resume and have an extra interest in reading the it. To assess your writing skills - This is also important even if it will simply be a byproduct of you sending the email. Your letter writing skills will be on full display in the cover letter which will help the recruiter better ascertain your skill in that area.The Porters’ food, clothing, and medical expenses are not fixed expenses. Explain what type of expense they are, and why.
Answer:
They are not fixed, because they can change depending on the living situation.
Answer:
Food, clothing, and medical are variable expenses because they occur regularly but can change from month to month.
Explanation:
sample ans
Ray Steen recently started a business. During the first few days of operation, Mr. Steen transferred $100,000 from his personal account into a business account for a company he named Steen Enterprises. Steen Enterprises borrowed $60,000 from First Bank. Mr. Steen's father-in- law, Stan Rhoades, invested $75,000 into the business for which he received a 25 percent owner- ship interest. Steen Enterprises purchased a building from Zoro Realty Company. The building cost $150,000 cash. Steen Enterprises earned $56,000 in revenue from the company's customers and paid its employees $31,000 for salaries expense. Required Identify the entities that were mentioned in the scenario and explain what happened to the cash accounts of each entity that you identify. g
Answer:
1. Identification of mentioned entities:
a. Ray Steen and Steen Enterprises
b. Steen Enterprises and Ray Steen
c. First Bank and Steen Enterprises
d. Stan Rhoades and Steen Enterprises
e. Zoro Realty Company and Steen Enterprises
f. Steen Enterprises, Customers, and Employees
2. Effects on Entities' Cash Accounts:
a. Ray Steen's personal Cash Account decreased and Steen Enterprises' increased by $100,000
b. Steen Enterprises' Cash Account increased as above.
c. First Bank's Cash Account decreased and Steen Enterprises' increased by $60,000 respectively.
d. Stan Rhoades' Cash Account decreased and Steen Enterprises' increased by $75,000
e. Zoro Realty Company's Cash Account increased while Steen Enterprises' decreased by $150,000.
f. Steen Enterprises, Customers, and Employees: Cash Account of Steen Enterprises increased and Customers' decreased by $56,000 respectively. Also the cash account of Steen Enterprises decreased and Employees' cash accounts increased by $31,000 respectively.
Explanation:
A legal entity is a person (like Ray Steen, Stan Rhoades, Employees, and Customers, etc), department, team, corporation (First Bank, Zoro Realty Company, and Steen Enterprises), cooperative, partnership, or other groups with whom it is possible to conduct business where economic resources are exchanged between economic agents (entities) undertaking economic events. This shows that in every business transaction, three important things are involved. They are resources, events, and agents. The resources describe the monetary value of assets (economic resources) that are exchanged between the agents. The events are the transactions while the agents are the entities (different personalities) that are involved in the exchange. This is fully developed in the REA model of accounting system.
If a bank is forced to write off bad loans, what item on a bank's balance sheet act as a safety net to prevent bank failure should reserves run low
Answer:
Bank capital
Explanation:
Banks keep reserves that are used to serve customers. In the case where the bank reserves run low as a result of loan write off the next balance sheet item that the bank can fall back on is capital.
Banks are required to keep a particular level of net worth or capital in case of insolvency these can be sold to finance the bank's activities.
Having large capital means the bank can get high income to cover emergencies like bank runs.
Assets are expected to exceed liabilities. When liabilities exceed assets the bank is sadi to have negative net worth and the FDIC has the right to close such banks
In its 2016 income statement, Tow Inc. reported proceeds from an officer's life insurance policy of $90,000 and depreciation of $250,000. Tow was the owner and beneficiary of the life insurance on its officer. Tow deducted depreciation of $370,000 in its 2016 income tax return when the tax rate was 25%. Data related to the reversal of the excess tax deduction for depreciation follow:_______. Year Reversal of excess tax deduction Enacted tax rates2017 $10,000 30%2018 20,000 30%2019 40,000 35%2020 50,000 35% There are no other temporary differences. Taxable income in 2016 is $68,000. Tow expects to report profits (rather than losses) for tax purposes for all future years. What is 2016 Income Tax Expense? a. $57,500 b. $47,000 c. $84,500 d. $53,000 e. $80,000
Answer:
A.. $57,500
Explanation:
Calculation for 2016 Income Tax Expense?
First step is to calculate the deferred tax liability
Year Reversal Tax rates Deferred Tax Liability
2017 $10,000 30% $3,000
2018 $20,000 30% $6,000
2019 $40,000 35% $14,000
2020 $50,000 35% $17,500
TOTAL Deferred tax liability $40,500
Second step is to find the Income tax on current year taxable income
Income tax= 68,000 * 25%
Income tax = 17,000
Last step is to find the total income tax expense to be recorded in the year 2016
Using this formula
Income tax expense= Deferred tax liability +Income tax
Let plug in the formula
Income tax expense=$40,500+$17,000
Income tax expense= $57,500
Therefore the Income Tax Expense for the year 2016 will be $57,500
A marketing mix that is ________ to provide a good, service, or idea to prospective buyers is known as a marketing program.
Explanation:
the answer is manufacturer because it is the person that distribute the good to the wholesalers
Welcome to the last week of your course. In this discussion question you have the opportunity to be creative and to relate what you have learned to your professional lives. Please explore and critically think about some of the learning objectives and concepts presented in this course. Please effectively communicate how you would lead an organization (or a group of people within the organization) by applying the knowledge you have learned ethically and responsibly. Your discussion should also include innovative thinking, and information-technology aspects (such as the Internet, social-media, computers, and so forth) that may assist you in decision-making. You may frame your discussion around any functional component of business, and in any context; problem-solving, management, leadership, organizational behavior, and so forth.
Explanation:
The business market is constantly changing, currently we are dealing with a technological revolution that directly affects the lives of people and companies. The market is increasingly competitive and globalized, so adapting to new processes and innovations with regard to technology, administrative practices and communication are essential when it comes to managing companies.
A good leader must understand that currently companies are increasingly responsible for their micro and macro environment, which configures them as active agents for positive change in the world. Therefore, the ideal is that managers consider adopting current practices that use modern communication and intelligence systems to make work easier and more agile, in addition to promoting continuous improvement in all organizational processes, avoiding waste and negative impacts on the environment, establishing social programs and environmental protection practices, in order to attest its value to stakeholders.
It is also necessary that the company be ethical with its employees, respect the individual values of each with regard to culture, gender, etc., promoting an environment and organizational culture focused on inclusion and respect for differences.
The ideal is also to have an assertive leadership, where the leader is the personal incentive agent, adopting positive attitudes about its collaborators and helping in the personal and professional development, generating an innovative, ethical and positive environment.
What kinds of business transactions are NOT summarized in a sole proprietor's books? A. Credits. B. Expenses or deductions. C. Gross income. D. Sole proprietor's wages.
Answer:
D. Sole proprietor's wages.
Explanation:
The owner of the business is the sole proprietor on the other hand sole proprietor is not an employee. Therefore he receives no salaries as he is the person who is an owner of any company or an organization. Any sum he takes from the company is considered to be withdrawn amount.
Hence, Sole Proprietor's wages are not listed in the ledger of the sole proprietor. So, the correct answer is D.
Use the neoclassical theory of distribution to predict the impact on the real wage and the real rental price of capital of each of the following events:A. A (one-time) wave of immigration increases the labor force.
B. An earthquake destroys part of the capital stock.
C. A technological advance improves production.
D. High inflation doubles the price of all factors of production and output.
Answer:
a. A (one-time) wave of immigration increases the labor force.
According to neoclassical economists, real wage = marginal product of labor. As more labor is available, the marginal product of labor will decrease (law of diminishing marginal returns). Therefore, since the marginal product of labor decreases, the real wages will also decrease.
Since there is more labor available, even though the capital stock remains the same, total output should increase. As total output increases, the real rental price of capital (interest) will increase.
b. An earthquake destroys part of the capital stock.
According to neoclassical economists, real rental price of capital = marginal product of capital. A decrease in the capital stock will result in an increase in the marginal product of capital. This will increase the real rental price of capital.
Since the capital stock decreases, additional labor will produce less additional output, reducing the marginal product of labor. Since the marginal product of labor decreases, the real wage will decrease also.
c. A technological advance improves the production.
Technological improvements generally increase both marginal product of labor and marginal product of capital, therefore, real wages will increase and real rental price of capital will also increase.
d. High inflation doubles the price of all factors of production and output.
Inflation rate has no effect on real wages and real rental price of capital. The effects are only on nominal wages and nominal rental price of capital.
To qualify for the quantity discount, which of the following may not be joined together under the definition of any person?
A. Husband and wife investing in a joint account.
B. Father and son in an UTMA account.
C. Father and his 35-year-old son investing in seperate account.
Answer:
C. Father and his 35-year-old son investing in separate account.
Explanation:
Quantity discount when offered relates to one particular account, and not multiple accounts at a time.
In a transaction joint accounts are called as single person where there is only one main account in consideration and no secondary account exists for the same.
As in the given options,
Option A of husband and wife investing in a joint account means a single account is made of which both the husband and wife are controllers.
Option B is of UTMA account which is made for the benefit of the minor child, although involves two people that is parent and child, but is run individually by the parent and is a single account.
Further Option C provides for separate investment accounts , which means two different accounts and therefore are completely different one of father and another of son, thus do not qualify of quantity discount jointly, either of the one account can claim the quantity discount as a person.
The income statement of Dolan Corporation for 2012 included the following items:
Interest revenue $131,000
Salaries and wages expense 170,000
Insurance expense 15,200
The following balances have been excerpted from Dolan Corporation's balance sheets:
December 31, 2012 December 31, 2011
Interest receivable $18,200 $15,000
Salaries and wages payable 17,800 8,400
Prepaid insurance 2,200 3,000
The cash paid for insurance premiums during 2012 was:______
A) $13,000.
B) $12,200.
C) $16,000.
D) $14,400.
Answer:
C) $16,000.
Explanation:
cash paid for insurance premiums = total insurance expense + ending balance of prepaid insurance - beginning balance of prepaid insurance
cash paid for insurance premiums = $15,200 + $3,000 - $2,200 = $16,000
Generally when you purchase an insurance policy you can either pay every month or pay for several months in advance and get a discount. When you pay for several months in advance, you must debit prepaid insurance. Then as time passes, you must accrue insurance expense. For e.g. you pay $2,400 today for a 1 year insurance premium, and at the end of the month you will accrue $200 of insurance expense. But your cash payment was made today.
You are writing the financial analysis for a snowboarding apparel business you are hoping to open in Topeka. Which tips should you follow?
a. Discuss market characteristics.
b. Describe how your service will benefit customers.
c. Outline a realistic start-up budget.
d. Present an operating budget that projects costs.
Answer: c. Outline a realistic start-up budget.
d. Present an operating budget that projects costs.
Explanation:
If one is writing the financial analysis for a snowboarding apparel business that one is hoping to open in Topeka, tye tios to follow include outlining a realistic start-up budget and presenting an operating budget that projects costs.
This will help the individual to know how much will be needed to fund the business and find means to get the fund to meet the requred costs.
If Congress cuts spending to balance the federal budget, the Fed can act to prevent unemployment and recession by
Answer: C. Reduce interest rates by increasing the money supply
Explanation:
If the Fed hopes to prevent unemployment and recession it needs to stimulate the economy to produce more goods and services as this will stave off recession while reducing unemployment as people will be needed to produce those goods and services.
The Fed can increase money supply which will lead to interest rates decreasing. When this happens more companies and individuals will be able to borrow funds as the cost of borrowing is low. These funds can then be invested in projects to increase production in the economy.
Assume the real rate was 9.5% and the inflation rate was 4%. Using the Fisher Effect, what was the nominal rate?
Answer:
13.88%
Explanation:
According to the fisher effect
(1 + nominal rate) = (1 + real rate) x (1+ inflation rate)
= (1.095) x (1.04) = 1.1388
(1 + nominal rate) = 1.1388
Nominal rate = 1.1388 - 1 = 0.1388 = 13.88%
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal office salaries $60,600 Apparel Department cost of sales—Evenda1e Store 116,100Corporate headquarters building lease 56,400Store manager' s salary—Evenda1e Store 18,300Apparel Department sales commission—Evenda1e Store 7,950Store utilities—Evenda1e Store 17,800Apparel manager' s salary—EvendaIe Store 9,950Central warehouse lease cost 24,000Janitorial costs—EvendaIe Store 13,700 The Evendale Store is just one Of many stores owned and operated by the company. The Apparel Department is one of many departments at the Evendale Store. The central warehouse serves all of the company's stores. Required: a. What is the total amount of the costs listed above that are direct costs of the Apparel Department? b. What is the total amount of the costs listed above that are direct costs of the Evendale Store? c. What is the total amount of the Apparel Department's direct costs that are also variable costs with respect to total departmental sales?
Answer:
1.$134,000
2.$183,800
3.$124,050
Explanation:
1. Computation for the total amount of the costs that are direct costs of the Apparel Department
Apparel Department cost of sales - Evendale store $116,100
Apparel Department sales commission-Evendale store $7,950
Apparel Department manager's salary-Evendale store $9,950
Total direct costs for the Apparel Department
$134,000
2. Computation for the total amount of the costs that are direct costs of the Evendale Store
Apparel Department cost of sales - Evendale store $116,100
Store managers salary - Evendale store $18,300
Apparel Department sales commission-Evendale store $7,950
Store utilities - Evendale store $17,800
Janitorial costs - Evendale store $13,700
Apparel Department manager's salary-Evendale store $9,950
Total direct cost for the Evendale store $183,800
3. Computation for the total amount of the Apparel Department's direct costs that are variable costs with respect to total departmental sales
Apparel Department cost of sales - Evendale store $116,100
Apparel Department sales commission-Evendale store $7,950
Total variable cost-Apparel department $124,050
What is customer-engagement marketing, and how is it related to the surge in digital and social media technologies
Answer:
The answer is below
Explanation:
Customer engagement marketing is a form of marketing style, which involves the company being in constant interaction with the customers to shape and reshape the customers' experiences, brand outlook, and environmental perception.
The main purpose of Customer engagement Marketing is to let the brand be part of customers' consumption lives and at the same time improve the quality of customers' brand experiences.
The linear programming model for crashing presented in the textbook assumes that any portion of the activity crash time can be achieved for a corresponding portion of the activity crashing cost. True False
Answer: True
Explanation:
Linear programming is a mathematical programming method to get the best solution to a problem when we are given certain constraints.
The linear programming model for crashing presented in the textbook assumes that any portion of the activity crash time can be achieved for a corresponding portion of the activity crashing cost is true.
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 30,000 Indirect materials included in manufacturing overhead $ 5,000 Direct labor $ 58,000 Manufacturing overhead applied to work in process $ 87,000 Underapplied overhead $ 4,000 Inventories Beginning Ending Raw materials $ 12,000 $ 18,000 Work in process $ 56,000 $ 65,000 Finished goods $ 35,000 $ 42,000 Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.
Answer:
Primare Corporation
Cost of Goods Sold:
Raw materials:
Beginning Inventory $12,000
Purchase 30,000
Ending Inventory (18,000)
Cost of raw materials $24,000
Direct labor 58,000
Beginning Work in process 56,000
Ending Work in process (65,000)
Manufacturing overhead 87,000
Cost of goods produced $160,000
Beginning Finished goods 35,000
Ending Finished goods (42,000)
Underapplied overhead 4,000
Cost of goods sold $157,000
Explanation:
a) Data and Calculations:
Raw materials purchase $ 30,000
Direct labor $ 58,000
Manufacturing overhead $ 87,000
Underapplied overhead $ 4,000
Inventories Beginning Ending
Raw materials $ 12,000 $ 18,000
Work in process 56,000 65,000
Finished goods 35,000 42,000
b) The cost of goods sold is the addition of the cost of production with the beginning inventory of finished goods and the ending inventory of finished goods. The underapplied overhead is added to the cost of goods sold.
The following financial information was obtained from the year ended 2018 income statements for Kringle Automotive and Leihman Automotive (Click the icon to view the financial information.)
Requirements 1. Compute the times-interest-earned ratio for each company. Round to two decimals
2. Which company was better able to cover its interest expense?
Requirement 1. Compute the times-interest-earned ratio for each company. Round to two decimals. Begin by showing the formula for the times-interest-earned ratio. Times-interest-earned ratio Now calculate the times-interest-earned ratio for each company. (Round the ratios to two decimal places, X.XX.) - X Data Table Leihman Kringle Times-interest-eamed ratio Kringle Leihman
Requirement 2. Which company was better able to cover its interest expense? 46.320 S Net income 40.870 S Automotive was better able cover its interest expense. 10,300 12,080 Income tax expense 350 2,000 Interest expense
Answer:
times interest ratio = EBIT / interest expense
1)
Kringle: TIE ratio = ($40,870 - $10,300 - $350) / $350 = 86.34
Leihman: TIE ratio = ($46,320 - $12,080 - $2,000) / $2,000 = 16.12
2)
Kringle was better able to cover its interest expenses since its TIE ratio is much higher than Leihman's (more than 5 times higher). This means that it is much easier for Kringle to pay off the interests on its debt.
Hielta Oy, a Finnish company, processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp process during June are provided below: Percent Completed Tons of Pulp Materials Labor and OverheadWork in process, June 1 80,400 81% 24%Work in process, June 30 51,200 43% 17%Started into production during June 301,400 Required:1. Compute the number of tons of pulp completed and transferred out during June.Units completed and transferred out: 2. Compute the equivalent units of production for materials and for labor and overhead for June.Materials Labor and OverheadEquivalent units of production
Answer:
the equivalent units of production for materials = 352,616 units,
the equivalent units of production for for labor and overhead (conversion) = 339,304 units
Explanation:
First Determine the physical units that were Completed and Transferred out
Units Completed and Transferred = Units in Opening Work In Process + Units Started During the Year - Units in Closing Work In Process
= 80,400 + 301,400 - 51,200
= 330,600
Calculation of Equivalent Units of Production for
1. Materials
Units Completed and Transferred ( 330,600 × 100%) = 330,600
Units in Closing Work In Process ( 51,200 × 43%) = 22,016
Total Equivalent Units of Production for Materials = 352,616
2. Labor and Overhead
Units Completed and Transferred ( 330,600 × 100%) = 330,600
Units in Closing Work In Process ( 51,200 × 17%) = 8,704
Total Equivalent Units of Production for Conversion = 339,304
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $127,000. The machine's useful life is estimated to be 4 years, or 380.000 units of product, with a $3,000 salvage value During its second year, the machine produces 76,000 units of product. Determine the machines' second year depreciation under the straight-line method. a. $24, 800. b. $31,000.c. $31, 750.d. $25, 400. e. $32, 500.
Answer:
b. $31,000
Explanation:
The computation of the depreciation expense using the straight-line method for the second year is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($127,000- $3,000) ÷ (4 years)
= ($124,000) ÷ (4 years)
= $31,000
Hence, the correct option is b. $31,000
The units are to be ignored as the method i.e used is straight line so the same is to be considered
Evaluating the competitive value of cross-business strategic fits in a company pursuing related diversification does not involve which one of the following?
a) Determining whether the strategic fits present sizable opportunities to reduce costs by combining the performance of certain related activities (and thereby capture economies of scope) and whether these cost-savings might be big enough to give one or more of the company's businesses a cost-based competitive advantage over rivals
b) Evaluating whether the fits among the strategies of each business unit are sufficiently compatible to produce strong resource fit and generate the financial resources needed for each business to aggressively competitive advantage in their respective industries
c) Evaluating whether there is much competitive value to be gained from cross-bu collaboration to create valuable new resources or capabilities that could driv gains in performance
d) Determining whether there is much competitive value to be gained from cross-business transfer of technology, skills, or know-how to correct the resource/capability deficiencies of the diversified company's weaker businesses and thereby boost their performance
e) Determining whether there is much competitive benefit to be gained from cross-business sharing of either the well-respected brand name of a sister business or the corporate parent's umbrella brand name pursue and have success in achieving a sustainable e significant
Answer: evaluating whether there is much competitive value to be gained from cross-business collaboration to create valuable new resources or capabilities that could drive significant gains in performance.
Explanation:
Related Diversification is a situation whereby a company expands its production line or markets bu producing a new product or in a case whereby a company has to penetrates a new market that is related to the business activity of the company.
It should be noted that the evaluation of the competitive value of cross-business strategic fits in a company pursuing related diversification does not involve evaluating whether there is much competitive value to be gained from cross-business collaboration to create valuable new resources or capabilities that could drive significant gains in performance
Which Act can be used to coordinate a securities registration filing under the provisions of the Uniform Securities Act
Answer: Securities Act of 1933
Explanation:
The Act of 1933 is the Act that can be used to coordinate a securities registration filing under the provisions of the Uniform Securities.
The Securities Act of 1933 consists of two main aims which are that the investors should get financial and necessary information with regards to the securities that are offered for public sale and also that fraud, deceit, and misrepresentations should be prohibited when selling securities.
When a monopolist increases output, total revenue will: Multiple Choice increase if the price effect outweighs the quantity effect. decrease if the quantity effect outweighs the price effect. increase if the quantity effect outweighs the price effect. increase but it will have no price effect.
Answer: will increase if the quantity effect outweighs the price effect
Explanation:
A monopolist is an individual or a firm that controls all the market for a certain good or service in the market. A monopolist has so much power and usually doesn't improve their product as there are no alternatives.
An increase in output by monopolist will increase if the quantity effect outweighs the price effect.
Sheltie Company sells lamps and clocks. Consider the following per unit data: At the break-even point, what is the sales revenue for lamps when fixed costs are $149,952 for Sheltie Company?
Answer:
$351,450
Explanation:
some information was missing, so I looked it up:
lamps clocks
selling price 75 45
variable costs 48 30
contribution margin 27 15
sales mix 3 1
contribution margin per bundle = (3 x $27) + (1 x $15) = $96 per bundle
break even point (in bundles) = $149,952 / $96 = 1,562 bundles which represents 4,686 lamps and 1,562 clocks
sales revenue for lamps at break even point = 4,686 lamps x $75 per lamp = $351,450
An example of a good that is nonexclusive but rival is A. national defense. B. public radio. C. hunting in a public game area. D. a pay-TV channel.
Answer:
C. hunting in a public game area
Explanation:
A good is nonexclusive if it is accessible to all.
a rival good is something that can only be possessed or consumed by a single user.
If someone hunts at a public game area, and kills an animal, the person that kills it , possesses the animal.
Answer:
C. hunting in a public game area.
Explanation:
A nonexclusive good is one that cannot be possessed Soley by one person, but is used by many people. While exclusive goods are used only by one person. For example if a person buys a car he can restrict it's use to only himself so it is an exclusive good.
A rival good is one whose use affects the rate of use by others. For example at a gas station the petrol bought by one person reduces the amount another can buy.
Hunting in a public game arena is an example of a nonexclusive but rival good.
The game arena is open to everyone, but when a hunter kills game it reduces the number of game other hunters can kill.
Match the financial institution to its role. take deposits and make loans manage a pool of money that is designated to be paid out to beneficiaries when they are in retirement
1. Commercial banks
2. Mutual funds help businesses, governments, and institutions to raise funds to
3. Pension funds finance their activities by issuing securities
4. Investment banks purchase a portfolio of assets for a group of investors
Answer:
1. Commercial banks - take deposits and make loans
Commercial banks create loans from the money deposited with them. They then earn interest on these loans and give the depositors some of the interest revenue depending on the type of account opened.
2. Mutual funds - purchase a portfolio of assets for a group of investors
Mutual funds pool money from multiple investors and then purchase a portfolio of assets. Profits made are divided amongst its investors.
3. Pension funds - manage a pool of money that is designated to be paid out to beneficiaries when they are in retirement.
Pension funds are meant to provide money to beneficiaries in retirement so they manage a pool of money that beneficiaries had invested into before they retired.
4. Investment banks - help businesses, governments, and institutions to raise funds to finance their activities by issuing securities.
Investment firms are mostly underwriters who help businesses, governments and other institutions raise funds to finance their activities.
American Builders, Inc. has just completed construction of the Freedom Tower - a 250 floor skyscraper located in California, which is now the world’s largest building. This massive tower cost $50 billion to build, and its replacement cost is estimated at $65 Billion. Given its location, there is always the possibility that an earthquake may cause damage to the tower. Gubenator Insurance Company is the primary property-casualty insurance company in California, and is used to dealing with the risk of earth movement. The company has a capital base of $45 Billion, with net surplus of $4 billion. Gubenator has been asked to insure the Freedom tower. Which of the following statements concerning this situation is correct? Group of answer choices
Question Completion:
Group of answer choices:
a. Due to the possibility of earthquake damage, Gubenator should decline coverage for the Freedom Tower.
b. Given the notoriety of the tower and the likelihood of positive press for providing coverage, Gubenator should insure the Freedom Tower.
c. Gubenator has the financial capacity to issue the policy.
d. Gubenator should insure the Freedom Tower only if it can obtain reinsurance for part of the risk from other insurance companies, since a total loss could be catastrophic to Gubenator.
Answer:
American Builders, Inc (Freedom Tower) and Gubenator Insurance Company
d. Gubenator should insure the Freedom Tower only if it can obtain reinsurance for part of the risk from other insurance companies, since a total loss could be catastrophic to Gubenator.
Explanation:
Option A establishes that the earthquake occurrence is a possibility and not a probability. That means it cannot be reasonably estimated that an earthquake may occur. Gubernator exists to insure property against the occurrence of risky events. It should go ahead and do its business. And it can spread the risk with other insurance companies through Reinsurance. Gubernator is not in the business of looking for cheap publicity, so option B is ruled out. Given that the Freedom Tower will only be one of the many properties insured by Gubernator, we cannot use its current capital to judge its capacity to handle the Freedom Tower; thus ruling out option C.
Kensington had this info at the end of 2015, its first year of operations:Pretax book income $800.000Prepaid expense 300,000Excess of tax over book depreciation 200,000 Interest Income on municipal bonds 100.000No other permanent or temporary differences exist. The prepaid expense will be expensed in 2018; the depreciation will reverse evenly over the next three years. Tax rate is 30%. Future net income is probable. The 12/31/15 Income Tax Payable is:______.a. $60,000.b. $240,000.c. $210,000.d. $180,000.e. $360,000.
Answer:
D. $180,000
Explanation:
Calculation for the 12/31/15 Income Tax Payable
Using this formula
Income tax payable =(Pretax book income-Excess of tax over book depreciation)× Tax rate
Let plug in the formula
Income tax payable=($800,000-$200,000)×30%
Income tax payable=$600,000×30%
Income tax payable=$180,000
Therefore the 12/31/15 Income Tax Payable is $180,000
Inflation is 14 percent. Debt is $4 trillion. The nominal deficit is $360 billion. What is the real deficit or surplus
Answer:
Real Surplus is $200 billion
Explanation:
Inflation = 14%
Debt = $4 trillion = $4,000 billion
Nominal deficit = $360 billion
Real Deficit = Nominal deficit - (Inflation*Debt)
= $360 - 14% * 4,000
= $360 - 560
= -$200
Hence, the answer is Real Surplus of $200 billion