Answer:
John as an entrepreneur, and the founder of Johnson Global, requires funding for his new business ventures. He has contacted Paul as an angel investor or the managing director of Paulson Venture Capital Ltd. When Paul invests his money in Johnson Global, he has paid the piper and will invariably dictate the tune. He also decides how the economic value shall be partitioned between the entrepreneur and the investor. Similar scenarios play out with all entrepreneurial financing.
An entrepreneur can fund his or her startup ideas or venture from various sources. She can take bootstrapping, otherwise known as the internal source. She can also take the external financing source. This later source is where business angels, venture capitalists, management buy-outs, and other sources of finance are arranged.
Venture capital and angel investors, suppliers, and employees design various deal structures and financial instruments first to capture where the value lies in a new venture and then decide how the finances are to be raised, when, and from whom. Having assigned an economic valuation to the startup idea, investors also conclude an effective funding contract with the entrepreneur and express their exit strategies.
Putting a value on a new venture is not an easy task. There are many uncertainties concerning development possibilities, and market and industry trends. There are informations gaps to deal with, the presence of soft assets, which are unique and rarely measurable in the marketplace, and associated volatility with market conditions, financial and product markets, and current value and potential profitability issues to be addressed.
Explanation:
Entrepreneurial finance covers the study of value and resource allocation, especially in a new venture. These aspects determine if the entrepreneur will get fresh finances for her ideas. They also determine who gets what from the economic value that will potentially result from the new venture.
6. If the price elasticity of supply is 1.2, and a price increase led to a 5% increase in quantity supplied, then the price increase is about
Answer:
Price increase is about 4.2%
Explanation:
Price Elasticity of Supply (PES) is a measure of the responsiveness of the quantity of a particular good/service supplied to a change in price.
The price elasticity of supply is mathematically the ratio of the percentage change in quantity supplied to the percentage change in price.
[tex]PES = \frac{\%\ change\ in\ quantity}{\%\ change\ in\ price} \\where\\PES= 1.2\\\% change\ in\ quantity = 5\%\\\%\ change\ in\ price = ???\\\therefore 1.2 = \frac{5}{\%\ change\ in\ price}\\ \%\ change\ in\ price = \frac{5}{1.2} \\\%\ change\ in\ price = 4.16\%[/tex]
What was the impact of the near failure of Bear Stearns and the failure of Lehman Brothers on Money Markets
Answer:
See explanation
Explanation:
The impact of the near failure of Bear Stearns resulted in financial crisis which shook global economy. This financial crisis almost brougt recession to Nations. Lehman Brothers on the other hand, crashed the stock market which caused problems on the S$P index.
The Treasury Department pumped more money into the economy in attempt to help Bear and Stearns but the two banks still failed leading to loss of money.
The failure of Lehman Brothers is termed the largest Bankruptcy in the history of U.S. The bankruptcy affected financial markets greatly.
Money Markets can be defined as the market that provides short term funds to the players. it is not regulated like the capital markets but it is also a component of the economy.
The statement of retained earnings or the statement of stockholders' equity reconciles the net income, dividends paid, and the change in retained earnings during a particular year.
Which of the following best describes shareholders' equity?
a. Equity is the difference between the paid-in capital and retained earnings.
b. Equity is the sum of what the initial stockholders paid when they bought company shares and the earnings that the company has retained over the years.
NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today's paper. In its annual report this year, NOW Inc. reported a net income of $160 million. Last year, the company reported a retained earnings balance of $595 million, whereas this year it increased to $700 million. How much was paid out in dividends this year?
a. $265 million
b. $4 million
c. $55 million
d. $280 million
Answer:
1.
Option B is the correct answer.
2.
Dividends Paid = $55 million. Thus, option C is the correct answer.
Explanation:
1.
The statement about shareholders' equity given in option A that it is the difference between the paid-in capital and retained earnings is incorrect as the retained earnings are a part of the equity of shareholders and are included in the calculation of shareholders' equity. Thus, option B is the correct answer.
2.
The Net Income earned by a company is usually treated in two ways. It is either paid out as dividends to the shareholders or is retained in the business and transferred to the retained earnings account or both. Thus, we can calculate the amount of dividends paid by the following equation.
Closing balance of retained earnings = Opening balance of retained earnings + Net Income for the period - Dividends Paid
700 = 595 + 160 - Dividends Paid
700 + Dividends Paid = 755
Dividends Paid = 755 - 700
Dividends Paid = $55 million
If you get 210 utility points from consuming 3 Krystal burgers per week:
A) and receive 250 utility points from consuming 4 Krystal burgers per week, the marginal benefit of the 4th burger was 40 utility points
B) and received 250-utility points from consuming 4 Krystal burgers per week, then the marginal benefit of consuming all 4 burgers must be 460 utility points.
C) and receive 250 utility points from consuming 4 Krystal burgers per week, the marginal benefit of the 4th burger must be higher than the 3rd burger
D) and receive 250 utility points from consuming 4 Krystal burgers per week, you should obviously keep eating more this week since it appears that the total benefit of eating them rises.
Answer:
A
Explanation:
Marginal utility is change in total utility when consumption is increased by 1 unit.
Total utility when 3 burgers were consumed was 210. When consumption was increased to 4 units, total utility rose to 250.
Marginal utility = 250 - 210 = 40 utility points
Care Clinic is preparing a worksheet for their staff. Their average starting salary is $60,000. Benefits are 25% this year. They expect them to go up to 27% next year. They are expecting to give a raise of 5% next year. Care Clinic has 20 employees. Prepare a formatted Excel Spreadsheet for Care Clinic. How much is the Total Staff Expense
Answer:
$1,600,200
Explanation:
The total staff expense can be calculated by using the following formula:
Total Staff Expense = (Salary For coming year with increment (STEP1) + Benefits In-Kind) * Total Employees
Here
Salary for Coming Year with Increment is $63,000 (Step1)
Total employees are 20 in Number
Benefits In-Kind per employee is 27% of salary which is $17,010 ($63,000 * 27%)
By putting values, we have:
Total Staff Expense = ($63,000 + $17,010) * 20 Employees
Total Staff Expense = $1,600,200
STEP 1: Find Salary for Coming Year with Increment
Salary for Coming Year with Increment = Average Salary Now * (1 + Increment)
Here
Average Salary is $60,000
Increment is 5%
Salary for Coming Year with Increment = $60,000 *(1 + 5%) = $63,000
EXCEL Formatted Spreadsheet For Care Clinic
Increment Avg. BIK T. Employees Total
5% Salary at 27%
Total Salary 60000 105% 63000 - 20 1,260,000
Benefits In-Kind 60000 105% 63000 27% 20 340200
1,600,200
According to classical macroeconomic theory, changes in the money supply affect: _________.(i) nominal variables, but not real variables.(ii) nominal variables and real variables. (iii) real variables, but not nominal variables.(iv) neither nominal nor real variables.
Answer: .(i) nominal variables, but not real variables
Explanation:
According to classical macroeconomic theory, changes in the money supply affect the nominal variables but the real variable are not affected.
According to the classical macroeconomic theory, it us believed that an increase in money supply will result into a rise in the availability of money in the market, thereby increasing consumers spending which will also lead to a rise in aggregate demand which in turn, causes inflation.
Thereby the nominal variables will be changed.
Mobile Homes reported the following in its financial statements for the year ended December 31, : 2018 2017 Income Statement Net Sales Revenue $ 25,118 $ 21,893 Cost of Goods Sold 18,074 15,501 Depreciation Expense 271 234Other Operating Expenses 4 4,632 4,277 Income Tax Expense 530 482 Net Income $ 1,611 1,399 Balance Sheet Cash S 21 19 Accounts Receivable 798 615 Merchandise Inventory 3,483 2,832 Property, Plant, and 4,351 3,437Equipment, net Accounts Payable 1,547 1,364 Accrued Liabilities 938 851 Long-term Liabilities 477 461 Common Stock, no par 670 443 Retained Earnings 5,021 3,784 Requirements 1. Compute the collections from customers. 2. Compute payments for merchandise inventory. 3. Compute payments of other operating expenses.4. Compute the acquisition of property plant and equipment.5. Compute the amount of borrowing with A-one paying no long term liabilities.6. Compute the payment of cash dividends.
Answer:
Mobile Homes
Computation of:
1. Collections from customers
Beginning Accounts Receivable $615
Net Sales 25,118
Less ending accounts receivable 798
Collections from customers $24,935
2. Payments for merchandise inventory
Beginning Accounts Payable 1,364
Purchases 18,725
Ending Accounts payable 1,547
Payments $18,542
3. Payments of other operating expenses:
Accrued liabilities:
beginning 851
Operating expenses 4,632
Less ending 938
Cash payments 4,545
4. Acquisition of property plant and equipment:
Beginning cost = $4,622
Ending cost = $3,671
Acquisition = $951
5. Amount of borrowing with:
a) Long-term liabilities:
Ending $477
Beginning $461
Borrowing $16
b) A-one paying no long term liabilities:
Accrued Liabilities:
Ending $938
Beginning $851
Borrowing $87
6. Payment of cash dividends:
Retained Earnings $3,784
Net Income 1,611
Total available $5,395
Retained earnings (5,021)
Dividends paid $374
Explanation:
a) Data and Calculations:
Mobile Homes Financial Statements for the years ended December 31:
2018 2017
Income Statement
Net Sales Revenue $ 25,118 $ 21,893
Cost of Goods Sold 18,074 15,501
Depreciation Expense 271 234
Other Operating Expenses 4,632 4,277
Income Tax Expense 530 482
Net Income $ 1,611 1,399
2018 2017
Balance Sheet
Cash 21 19
Accounts Receivable 798 615
Merchandise Inventory 3,483 2,832
Property, Plant, and
Equipment, net 4,351 3,437
Accounts Payable 1,547 1,364
Accrued Liabilities 938 851
Long-term Liabilities 477 461
Common Stock, no par 670 443
Retained Earnings 5,021 3,784
Property, plant, and equipment:
PPE net 4,351 3,437
Depreciation 271 234
Cost 4,622 3,671
Purchases:
Ending inventory 3,483
Cost of goods sold 18,074
Beginning inventory (2,832)
Purchases 18,725
If a good is subject to a binding price floor and someone purchases it on the black market, what would he or she expect to happen to the price over time
Answer:
The surplus of the goods will rise, meaning that the availability of the such good will increase over time as both the supply and demand curves become more elastic.
Explanation:
Due to the presence of the black market, people are going to buy it from the black market at a lower cost, thus the availability will rise and the total surplus will rise due to market equilibrium.
The next dividend payment by GMR Enterprises will be $1.82 per share with future increases of 2.8 percent annually. The stock currently sells for $38.70 per share. What is the dividend yield
Answer:
4.70%
Explanation:
According to the given situation, the computation of dividend yield is shown below:-
Dividend Yield = Expected dividend ÷ Current price
where,
expected dividend is $1.82
And, the current price is $38.70
Now place the values to the above formula
So, the dividend yield is
= $1.82 ÷ $38.70
= 0.0470
or
= 4.70%
Therefore for computing the dividend yield we simply applied the above formula.
All Japanese beer makers continuing on a predictable straight path producing pilsner-like traditional beer is indicative of what kind of strategy
Answer: emergent strategies
Explanation:
All Japanese beer makers continuing on a predictable straight path producing pilsner-like traditional beer is indicative of the emergent strategies.
It should be noted that emergent strategies are the set of behavior and actions, that are consistent with time, which was not part of the initial planning of the strategy that an organization wants to use.
The Securities Act of 1933 does not apply to the issuance of securities under $5 million. Question 4 options: True False
Answer:
False
Explanation:
The Securities Act of 1933 requires the registration of all the securities issued and sold ob public markets. This act had some exemptions:
private offerings (if the securities were offered to a certain group of persons and/or institutions)offerings of a limited size: a very small issuance would be excluded, but remember that $5 million of 1933 are equivalent to more than $98 million today (average annual inflation of 3.48%)securities issued by government entitiessecurities issued on intrastate offerings (only traded within a given state)The price of printers at the big box tech stores increases as a new type of print tech is rolled out to consumers. which of the follwoing scenario for a complementary printer good would likely take place?
A- the demand for printer ink decreases as less people are buying printers
B- the demand for printer paper rises as pepole stock up
Answer:
A- the demand for printer ink decreases as less people are buying printers
Explanation:
Generally speaking, when the price of a complementary good increases, the quantity demanded for both goods should decrease. If the price decreases, the opposite should happen. Even though the demand for some high tech products behave in strange ways (e.g. first iPhones), usually new products with higher prices will result in a decrease of the demand for that specific product and all complementary products.
An investor's portfolio has a beta coefficient of 0.85. If the overall market declined by 10% over the course of a year, the portfolio's value has likely
Answer: decreased by 8.5%
Explanation:
The beta coefficient of a stock is simply used to measure the volatility of a stock which is relative to the market.
From the question, we are informed that investor's portfolio has a beta coefficient of 0.85 and that the overall market declined by 10% over the course of a year.
Based on the information above, the value of the portfolio would have decreased by:
= 0.85/10
= 0.085
= 8.5%
Which of the following actions should Reece Windows take if it wants to reduce its cash conversion cycle?a. Take steps to reduce the DSO.b. Increase average inventory without increasing sales.c. Sell common stock to retire long-term bonds.d. Start paying its bills sooner, which would reduce the average accounts payable but not affect sales.e. Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock.
Answer: a. Take steps to reduce the DSO
Explanation:
Cash conversion cycle simply measures the length by which there will be deprivation of cash for a firm when the firm increases its investment in its inventory so that customer sales can be expanded
The actions that Reece Windows should take if it wants to reduce its cash conversion cycle is to take steps to reduce the DSO. This will help in reducing cash conversion cycle.
Describe a time when your team or company was undergoing some change. How did that impact you, and how did you adapt?
Answer:
Our company had to undergo many changes during the lock down. We started working from home rather than going to office, not all the employees had computers or internet connection, so the HR department had to send computer to employees and they arranged the internet connection by themselves. It was bit uneasy to work from home in the beginning but we all adapted gradually and everything became normal.
Also, we had acquire new projects as the we were not getting work from some of the old projects.
Sankey Co. has earnings per share of $3.95. The benchmark PE is 18.8 times. What stock price would you consider appropriate
Answer:
Stock price = $74.26
Explanation:
The value of a share can be determined using the price earning ratio model. According to this model, the price of a share is estimated as the EPS of the company multiplied by a representative (benchmark) price- earning (P/E) ratio .
The ratio relates the price of a stock to its earning. A stock with a higher P/R indicates a high potent for growth.
Price of stock =Earnings per share( EPS) × benchmark P/E ratio
The appropriate comparative price earnings ratio in the question has been given as 18.8 times.
DATA-
EPS- 3.95
PE- 18.8
Stock price = 3.95 × 18.8= $74.26
Stock price = $74.26
Mufala, Inc., will issue $10,000,000 of 6% 10-year bonds. The market rate for bonds with similar risk and maturity is 8%. Interest will be paid by Mufala semiannually. What is the issue price of the bonds
Answer:
the issue price of the bond is $8,640,999
Explanation:
The computation of the issue price of the bond is shown below:
Particulars Amount PV factor Present value
Semi-annual Interest $300,000 13.59033 $4,077,099
Principal $10,000,000 0.45639 $4,563,900
Issue price of the bonds $8,640,999
Therefore the issue price of the bond is $8,640,999
The audit expectation gap occurs when there is a difference between the expectations of the ________. a. generally accepted accounting principles and auditors. b. auditors and company under review. c. auditors and financial statement users. d. company under review and financial statement users.
Answer:
c. auditors and financial statement users.
Explanation:
This is because, the auditors and the financial statement users tends to have different views on what their responsibilities are. Since their views differs, their tend to be a gap which occurs. This gap is called audit expectation gap. This could be minimized through self regulating auditing of the financial statement before the final auditing by auditors.
A company borrowed from the bank by signing a longterm note. How does this transaction affect the accounting equation?
Answer:
Balanced
Explanation:
Accounting equation: Assets = Liabilities + Equity
If a company borrows a loan note from the bank this will alternatively increase the assets because the cash received from the bank and liabilities portion will also increase at the opposite side with the same amount the asset is increased therefore the accounting equation will be balanced.
Which of the following types of communication is most likely to be used by employees to provide feedback to higher-ups, inform them of progress toward goals, and relay current problems?
A) lateral communication
B) upward communication
C) downward communication
D) horizontal communication
E) grapevine communication
Answer:
B) upward communication
Explanation:
Upward communication takes place when employees inform or communicate something to their supervisors or managers. This type of communication can be carried out by entry level employees informing their supervisors or low level managers about something, but also takes place when middle managers inform upper management.
The two types of reports that DMARC reporting provides are aggregate reports and_________reports.
Answer:
Forensic Report
Explanation:
The two types of reports that DMARC reporting provides are aggregate reports and Forensic reports.
DMARC (Domain-Based Message Authentication Reporting and Conformance) is set up to help validate emails being sent and received.
Forensic report send emails following ruf tag. It securea information that secures organization's domain. It adds additional information such as subject line and information about attachment.
The Aggregate Report offers great insight into email authentication. It is an XML feedback designed in order to give email visibility.
To determine who would be the best person work on a market analytics project to facilitate a company-wide re-branding initiative, Lauren secretly timed and recorded how long it took three of her staff to complete a mini-analytics project before deciding to whom she would assign the project. What tool was Lauren using?
Answer:
She was using the time and motion study.
Explanation:
The tool Lauren used is the time-and-motion study. This technique was made for business efficiency. It is a set of tools that is useful for increasing efficiency by making work simpler as well as setting standards and combining it with some sort of worker motivation in terms of wages.
It is a combination of time study done by Frederick Taylor and motion study done by Lilian and Frank Gilbreth.
Due to massive customer heterogeneity, Professor Fader would say there’s more opportunity to "move the needle" via ___________ than ___________.
Answer:
acquisition ; development
Explanation:
Heterogeneity refers to the state where the character if different of each and every product.
These days the consumer or the customers have heterogeneity and with basic product development each time you cannot full fill the need of every customer.
For that you need to provide complete other product sometime. Therefore, as per Professor Fader one should seek more opportunity through acquisition, that does not mean that you should stop development. Development is also needed, and shall not be stopped. That is always the icing on the cake.
According to the Coase Theorem, in the absence of bargaining costs, A. property rights are key to determining the final outcome of a dispute. B. regardless of the initial assignment of property rights, the parties will successfully bargain to the efficient outcome. C. whichever party has the larger initial assignment of property rights will control the outcome of a dispute. D. whichever party has more money will determine the outcome of a dispute.
Answer:
B. regardless of the initial assignment of property rights, the parties will successfully bargain to the efficient outcome.
Explanation:
This theorem is easier to explain using an example: you have a neighbor that likes playing drums during your nap time. Since playing drums is not illegal, there is very little that you can do to force your neighbor to stop making noise. You value your nap time at $50, and you neighbor values his drumming time at $35 since he could also purchase a Playstation game and play during that time. According to the Coarse Theorem, the optimal solution would be to give your neighbor $35 so he can play Playstation games, since you would gain $50 - $35 = $15.
Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $27,100 and credit terms of 3/10, n/60 the merchandise had cost Mesa $16,000. Santa Fe paid within the discount period. Assume that both buyer and seller use a perpetual inventory system.Required:a. Prepare entries that the buyer should record for (a) the purchase and (b) the cash paymentb. Prepare entries that the seller should record for (a) the sale and (b) the cash collectionc. Assume that the buyer borrowed enough cash to pay the balance on the last day of the discount period at an annual interest rate of 8% and paid it back on the last day of the credit period. Compute how much the buyer saved by following this strategy. (Assume a 365-day year and round dollar amounts to the nearest cent, including computation of interest per day.)
Answer:
a. Prepare entries that the buyer should record for (a) the purchase and (b) the cash payment
a) date, month, year, merchandise purchased on account from Mesa Company, credit terms 3/10, n/60
Dr Merchandise inventory 27,100
Cr Accounts payable 27,100
b) 10 days later, invoice paid within discount period to Mesa Company
Dr Accounts payable 27,100
Cr Cash 26,287
Cr Purchase discounts 813
b. Prepare entries that the seller should record for (a) the sale and (b) the cash collection
a) date, month, year, merchandise sold on account to Santa Fe Company, credit terms 3/10, n/60
Dr Accounts receivable 27,100
Cr Sales revenue 27,100
Dr Cost of goods sold 16,000
Cr Merchandise inventory 16,000
b) 10 days later, invoice collected from Santa Fe Company
Dr Cash 26,287
Dr Sales discount 813
Cr Accounts receivable 27,100
c. Compute how much the buyer saved by following this strategy.
interest expense = $27,100 x 8% x 50/365 days = $296.99
purchase discount = $813
money saved through borrowing = $813 - $296.99 = $516.01
As the price level declines along the aggregate demand curve, the interest rate is most likely to:___________.
a. Decline
b. Increase
c. Remain unchanged
Answer:
a. Decline
Explanation:
Whenever there is a reduction in the price level, this results in gains in the real money supply which eventually moves the LM curve to the right.
Hence, given that, the IS curve has a downward slope, the IS and LM curves will meet at a higher level of income and a lower interest rate.
Therefore, the correct answer, in this case, is Option A: DECLINE
Note LM means Liquidity and Money
While IS means Investment and Savings.
Business activities on the cash flow statement can be classified into 3 groups:_____.
A) Operating Activities, Investing Activities and Financing Activities.
B) Operating Activities, Investing Activities and Leasing Activities.
C) Operating Activities, Marketing Activities and Financing Activities.
D) Operating Activities, Dividends, and Financing Activities.
Tying sales is a market practice designed to increase sales volume. A "tying sales" situation is said to occur when what happens
Answer: customer is required to buy one product only if the customer also buys a second product
Explanation:
Tying sales is a market practice designed to increase sales volume. A "tying sales" situation is said to occur when a customer is required to buy one product only if the customer also buys a second product.
Tying sales is simply defined as a scenario whereby the purchase of a good or service is compulsory when one buys a different good or service. This meane the individual helps us buying two products.
Which of the following policies should a country implement in an economic downturn to avoid a Paradox of Thrift?
a) Implement policies to encourage saving.
b) Implement policies to encourage greater consumption.
c) Raise taxes to ensure the government stays funded.
d) Reduce overall government spending.
Answer:
B) Implement policies to encourage greater consumption.
Explanation:
The Paradox of thrift says that an increase in autonomous saving leads to a decrease in aggregate demand and thus a decrease in gross output which will, in turn, lower total saving due to that total saving may fall because of individuals' attempts to increase their saving, Therefore, to avoid the paradox of thrift policies to encourage consumption must be implemented.
You find a certain stock that had returns of 16 percent, −9 percent, 23 percent, and 24 percent for four of the last five years. The average return of the stock over this period was 14.4 percent. a. What was the stock’s return for the missing year? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b. What is the standard deviation of the stock’s returns? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
a. 18%
b. 13.50%
Explanation:
The computation of the stock return for the missing year is shown below:
a. Let the fifth year stock return be x
Average rate of return = Total returns ÷ number of years
0.14.4 = (0.16 - 0.09 + 0.23 + 0.24 + x) ÷ 5
So after solving this, the x is 18%
b. Now the standard deviation of the stock return is shown in the excel spreadsheet
The standard deviation is 13.50%