Answer:
a. Assuming a 3% per year real earnings rate for the fixed-income fund and 6% per year for common stocks, what will be George’s expected accumulation in each account at age 65?
Fixed Income Fund:
$100,000 x (1 + 3%)²⁵ = $209,377.79
$1,500 x 36.459 (FV annuity factor, 3%, 25 periods) = $54,688.50
total value = $264,066.29
Common Stock Fund:
$100,000 x (1 + 6%)²⁵ = $429,187.07
$1,500 x 54.865 (FV annuity factor, 6%, 25 periods) = $82,297.50
total value = $511,484.57
b. What will be the expected real retirement annuity from each account, assuming these same real earnings rates?
Contribution from fixed income fund:
$264,066.29 = annual payment x 11.938 (PV annuity factor, 3%, 15 periods) annual payment = $264,066.29 / 11.938 = $22,119.81
Contribution from common stock fund:
$511,484.57 = annual payment x 9.7122 (PV annuity factor, 6%, 15 periods) annual payment = $511,484.57 / 9.7122 = $52,664.13
c. If George wanted a retirement annuity of $30,000 per year from the fixed-income fund, by how much would he have to increase his annual contributions?
total fixed income fund = $30,000 x 11.938 = $358,140
difference in value = $358,140 - $264,066.29 = $94,073.71 / 36.459 = $2,580.26
difference in annual contributions = $94,073.71 /
When a municipal bond has a net revenue pledge, what is the first item that gets paid from the revenue received
Answer: Operations and maintenance
Explanation:
A municipal bond, is simply a bond that is issued by a either a territory, its agency or the local government, to help finance public projects like infrastructure, airports, roads, schools, and seaports.
Therefore, when a municipal bond has a net revenue pledge, the first item that gets paid from the revenue received will be for Operations and maintenance.
Bramble Corp. is planning to sell 1300 boxes of ceramic tile, with production estimated at 1270 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $18 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Bramble has 4600 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
Answer:
Purchases= 55,780 pounds
Explanation:
Giving the following information:
Production= 1270 boxes
Each box of tile requires 44 pounds of clay mix
Bramble has 4,600 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory.
To calculate the purchase required, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 1,270*44 + 4,500 - 4,600
Purchases= 55,780 pounds
What is the effect on the financial statements of recording a $15,000 repair expense as a debit to Machinery and a credit to Cash?
Answer:
The net income and assets for the year will be overstated by $15,000.
Explanation:
A repair expense of $15,000 is a period cost that should be expensed in the period in which it is incurred and not carried forward to the next accounting period or capitalized. By capitalizing this repair expense, the net income and assets for the period are overstated. The concept of accrual is also not followed. Repair expense can only be capitalized when it adds to the value of an asset, which it does not possess before the repair. But ordinarily, repairs restore an asset to its former value and does not add to the value.
World-class businesses attempt to meet the needs of:_________.A) their customers, even if it comes at the expense of employees and other stakeholders in the business.B) their employees, even if it means shortchanging customers by charging higher prices.C) all of their stakeholders.D) exclusively their owners, since they are ultimately the ones who pay the bills.
World-class businesses attempt to meet the needs of all of their stakeholders. The correct option is C.
Why is it important to meet needs?Because not meeting our needs causes our emotional suffering, it is crucial to do so. It's possible that you're in pain without understanding why or what needs aren't being met. We feel content, appreciative, safe, loved, playful, attentive, and calm when our needs are met.
A company can ask customers additional questions to determine what other products might pique their interest once they have a better understanding of their needs and wants. Your business will be able to tell if the customer is interested in exploring more options or if they have exhausted their buying options by listening carefully.
Thus, the ideal selection is option C.
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A stock paying $5 in annual dividends sells now for $80 and has an expected return of 10%. What would be the stock price eight years from now
Answer:
P8 = $105.5994 rounded off to $105.60
Explanation:
The constant growth model of DDM is used to calculate the price of a stock whose dividend growth rate is constant. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for the price of stock today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 * (1+g) is the dividend for the next period of D1r is the required rate of returng is the growth rate in dividends80 = 5 * (1+g) / (0.1 - g)
80 * (0.1 - g) = 5 * (1+g)
8 - 80g = 5 + 5g
8 - 5 = 5g + 80g
3 = 85g
3/85 = g
g = 0.03529 or 3.529% rounded off to 3.53%
To calculate the price today, we use D1. Thus, to calculate the price 8 years from now or P8, we will use D9
P8 = 5 (1+0.0353)^9 / (0.1 - 0.0353)
P8 = $105.5994 rounded off to $105.60
Which one of the following would not be considered an advantage of the corporate form of organization?a. Limited liability of ownersb. Separate legal existencec. Continuous lifed. Government regulation
Answer:
Disadvantage of Corporate Form of Organization:
d. Government regulation
Explanation:
In recent times, government regulation of businesses appears to be regarded as a disadvantage of the corporate form of organizations. Governments intervene and regulate corporate entities whenever they fail to be self-regulatory. But, the regulations may appear to be so much that the corporate form of organization now looks like a disadvantage. Given the many corporate scandals, collapses, and misapplications of resources by corporate entities that have become the order of the day, government regulation is very important. Without government regulation, many corporate bodies will not be acting in the public interest. This is more so with public entity corporate organizations with diverse stakeholders and corporate managers who act as if they were running their own autonomous governments.
_____________ are sunk costs because the company will have to pay the cost no matter production or other variables in operations.
Answer:
E. Fixed Costs
Explanation:
Here are the options to this question :
A. Variable Costs
B. Labor Costs
C. Total Costs
D. Raw material Costs
E. Fixed Costs
Sunk costs are costs that have already been incurred and cannot be recovered. They should not be considered when making future economic decisions.
Fixed cost is cost that do not vary with production. e.g. rent
Most companies pay rent per year. if due to unforeseen contingencies, sales and profit of the company declines and the company decides to shut down production, the company has already paid for rent, this amount cannot be recovered even though the company would not be using the space for sometime. So, rent is an example of sunk cost
On November 1, 2018, Mason Corp. sold $700,000 of its 10% term bonds dated October 1, 2018. The bonds were sold to yield 8%, with total proceeds of $800,000 plus accrued interest. Interest is paid every April 1 and October 1.
What amount should Mason report for interest payable in its December 31, 2018 balance sheet?
Answer:
$16,000
Explanation:
The computation of the amount reported for the interest payable is shown below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $800,000 × 8% × (3 months ÷ 12 months)
= $16,000
The three months should be taken from October 1 To November 1 and November 1 to December 31
We simply applied the above formula so that the interest payable amount could come
A firm sells two products, Regular and Ultra. For every unit of Regular the firm sells, two units of Ultra are sold. The firm's total fixed costs are $2,242,500. Selling prices and cost information for both products follow. What is the firm's break-even point in units of Regular and Ultra?unit sales price variable cost per unitproductregular 27 $8ultra 30 $7a) 34,500 Regular units and 34,500 Ultra units.b) 34,500 Regular units and 69,000 Ultra units.c) 11,500 Regular units and 23,000 Ultra units.d) 40,250 Regular units and 80,500 Ultra units.e) 69,000 Regular units and 34,500 Ultra units.
Answer:
b) 34,500 Regular units and 69,000 Ultra units
Explanation:
The computation of the firm break even point in units for Regular and Ultra is shown below:
Weighted average contribution margin per unit is
= (19 × 1 ÷ 3 + 23 × 2 ÷ 3)
= 21.6666 per unit
Now Break even point unit is
= 2242500 ÷ 21.666
= 103500 unit
Now
Regular = 103500 ÷ 3 = 34500
And Ultra = 103500 - 34500 = 69000
So the correct option is b
44. What's the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%?
Answer:
$5,000
Explanation:
A perpetuity pays $250 every year
The appropriate interest rate is 5%
= 5/100
= 0.05
Therefore the present value of the perpetuity can be calculated as follows
= 250/0.05
= $5,000
Hence the present value of the perpetuity is $5,000
Which of the following is not a recommended guideline for designing an effective incentive compensation system?
a) Making generous across-the-board wage and salary increases for all company personnel the cornerstone of monetary rewards and having a reward system that consists of at least 50 percent non-monetary rewards and incentives
b) Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible
c) Making sure the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect
d) Administering the reward system with scrupulous objectivity and fairness
e) Strictly avoid rewarding people who have tried hard, gone the extra mile, and yet fallen short of achieving their assigned performance targets (even if the shortfall might be due to circumstances beyond their control)
Answer: Strictly avoid rewarding people who have tried hard, gone the extra mile, and yet fallen short of achieving their assigned performance targets (even if the shortfall might be due to circumstances beyond their control
Explanation:
Out of the options given, the one which is not is not a recommended guideline for designing an effective incentive compensation system is strictly avoid rewarding people who have tried hard, gone the extra mile, and yet fallen short of achieving their assigned performance targets (even if the shortfall might be due to circumstances beyond their control).
Bay Company acquires 60, 8%, 5 year, $1,000 Community bonds on January 1, 2014 for $60,000. The journal entry to record this investment includes a debit to
Answer: Interest revenue for $2400
Explanation:
From the question, we are informed that Bay Company acquires 60, 8%, 5 year, $1,000 Community bonds on January 1, 2014 for $60,000. The journal entry to record this investment includes a debit for Interest revenue for $2400.
This was calculated in the following way:
= $60,000 × 8% × 1/2
= $60,000 × 0.08 × 0.5
= $2400 interest revenue
Answer:
The options are missing, so I will just write down the complete journal entry that Bay Company should use to record this investment:
January 1, 2014, investment in Community bonds
Dr Investment in Community bonds 60,000
Cr Cash 60,000
Since no other transaction has taken place, all you need to record is the asset (investment account) and decrease the cash used to purchase the asset.
McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $4.00 per share with the first dividend exactly 10 years from today. If the required return is 3.66 percent, what is the current price of the stock?
Answer: $79.08
Explanation:
From the question, we are informed that McKerley Corp. has preferred stock outstanding that will pay an annual dividend of $4.00 per share with the first dividend exactly 10 years from today and that the required return is 3.66 percent.
The current price of the stock will be calculated thus:
At the end of year 9, the price will be:
= 4/3.66%
= 4/0.0366
= 109.29
The Price Today will be:
= 109.29/1.0366^9
= 79.08
Ben &Jerry's Ice Cream buys keywords for a search marketing campaign such as "Ben &Jerry's Chunky Monkey" and "Ben &Jerry's Cherry Garcia." What type of keywords is the firm buying? Group of answer choices
Complete Question:
Ben & Jerry’s Ice Cream buys keywords for a search marketing campaign such as “Ben & Jerry’s Chunky Monkey” and “Ben & Jerry’s Cherry Garcia.” What type of keywords is the firm buying?
Group of answer choices
A. Negative keywords
B. Organic keywords
C. Native keywords
D. Generic keywords
E. Branded keywords
Answer:
E. Branded keywords.
Explanation:
In this scenario, Ben & Jerry's Ice Cream buys keywords for a search marketing campaign such as "Ben & Jerry's Chunky Monkey" and "Ben & Jerry's Cherry Garcia." The type of keywords that the firm is buying is generally referred to as branded keywords.
A branded keyword can be defined as any query of a database through a search engine such as Google which includes the name of the business firm or company.
This ultimately implies that, a branded keyword is any query or search phrases that combines the name of a firm or brand and other branded terms associated with the firm such as product name, type, motto etc. Branded keywords is a strategic marketing process or approach which helps to make business firms or brands available to online customers and the target market or audience.
According to the technical approach, what matters in exchange rate determination is:____________.
A. the past behavior of exchange rates.
B. the velocity of money.
C. the future behavior of exchange rates.
D. the beta.
Through social media connections, marketers and customers share information by Multiple Choice media buying. connecting customers with ways to buy media time. connecting customers online to share personal information. connecting people to financial advisors. uploading pictures, music, and videos.
Answer: Uploading pictures, music, and videos.
Explanation:
Social Media has made connections between marketers and customers easier and more widespread. They are able to share information amongst themselves through various means such as discussions on products as well as uploading pictures, music and videos.
Through these uploads of pictures, music and videos, marketers and consumers can share information relating to new products, product performance and the like. For instance, in the movie industry, trailers are frequently uploaded on social media sites to enable the movie gain traction before it is released and this method has worked wonders for movie premiers.
The tax basis for an investor in a limited partnership that establishes the maximum loss deduction is:
Answer: . I, II, III, IV
Explanation:
Here is the completed question:
The tax basis for an investor in a limited partnership that establishes the maximum loss deduction includes:
I original investment
II partnership debt assumed
III distributive share of partnership gains
IV distributive share of partnership losses
A. I only
B. I and II only
C. III and IV only
D. I, II, III, IV
It should be noted that an investor that is in a limited partnership will out forward a "tax basis" whereby there's limit limit for tax deductions that are allowed.
Therefore, the tax basis for an investor in a limited partnership that establishes the maximum loss deduction is original investment, partnership debt assumed, distributive share of partnership gains and the distributive share of partnership losses.
The applied overhead is compared to the actual overhead, with any discrepancy going into one of the following three accounts: goods in process inventory, finished goods inventory, or cost of goods sold.
a) true
b) false
Answer:
b) false
Explanation:
There are 2 methods of allocating under-applied / over-applied overheads under of the methods any discrepancy is allocated to all of the three accounts, that is finished goods, work-in-progress and cost of goods sold. Under the other method, all of it is allocated to cost of goods sold. Hence, given statement is false
Which of the following costs are variable? Cost 10,000 Units 30,000 Units 1. $100,000 $300,000 2. 40,000 240,000 3. 90,000 90,000 4. 50,000 150,000
Answer:
Only costs 1 and 4 are variable costs.
Explanation:
Note: The data in this question are merged together. They are therefore sorted before answering the question as follows:
Which of the following costs are variable?
Cost 10,000 Units 30,000 Units
1. $100,000 $300,000
2. 40,000 240,000
3. 90,000 90,000
4. 50,000 150,000
Explanation of the answer are now given as follows:
Variable costs refer to per unit cost that remains the same at every level of activity. Variable cost can be calculated as follows:
Variable cost per unit = Total cost / Number of unit ………… (1)
For this question, the variable costs can be determined using the following rules:
Rule 1. When per unit cost are the same, they are variable cost.
Rule 2. When per unit cost are different, they are not variable cost.
Rule 3. When the total cost is the same, they are fixed costs.
These rules are then applied by using equation (1) as follows:
For Cost 1:
Cost per unit of 10,000 units = $100,000 / 10,000 units = $10
Cost per unit of 30,000 units = $300,000 / 30,000 units = $10
Based on Rule 1, Cost 1 is a variable cost.
For Cost 2:
Cost per unit of 10,000 units = $40,000 / 10,000 units = $4
Cost per unit of 30,000 units = $240,000 / 30,000 units = $8
Based on Rule 2, Cost 2 is not a variable cost.
For Cost 3:
Since the two total costs are $90,000 each, Cost 3 is therefore fixed cost based on Rule 3.
For Cost 4:
Cost per unit of 10,000 units = $50,000 / 10,000 units = $5
Cost per unit of 30,000 units = $150,000 / 30,000 units = $5
Based on Rule 1, Cost 3 is a variable cost.
Based on the calculation above, only costs 1 and 4 are variable costs.
The Estimated Revenues account of a government is debited when:a. The account is closed to fund balance-unassigned at the end of the year.b. Property taxes are recorded.c. Property taxes are collected.d. The budget is recorded at the beginning of the year.
Answer: a. The account is closed to fund balance-unassigned at the end of the year.
Explanation:
The Unassigned fund balance is the amount left in the Government's general fund that was not assigned to any undertaking or funds during the year. This balance is as well not restricted or committed to any undertaking.
It will therefore be debited to close off the account at the end of the period not unlike a balance carried down in a ledger account that is used to close off the account and is then sent forward to the next period.
The relationship between the passage of time and the value of assets is called:_________
Answer:
Depreciation
Explanation:
Depreciation is the decrease in value of an asset as time goes by. Depreciation is a method used in expensing the cost of an asset.
As time goes on, the value of an asset reduces as a result of wear and tear. this is known as depreciation.
What does it mean for a product to have inelastic demand? A small change in the price has very little effect on the quantity of that product demanded. There is particularly high competition with the product, and an increase in price has a big impact on demand. The price for the product will increase as demand for the product increases. More of the product will be demanded at a lower price than for a higher price.
Answer:
I believe your answer will be (A price increase does not have a significant impact on buying habits)
Explanation:
A small change in the price has very little effect on the quantity of that product demanded, is it mean for a product to have inelastic demand. Hence, option A is correct.
What is the effect of a change in price on quantity?When non-price variables are eliminated, it follows that higher prices lead to lower volumes demanded and lower prices lead to higher quantities demanded. As a result, according to the rule of demand, there is an inverse relationship between a product's price and the quantity that is demanded for it.
An increase in price has a relatively slight influence on quantity demanded; the equilibrium quantity percentage growth is less than the price change percentage change, and the resulting price elasticity has an absolute value below 1.
Thus, option A is correct.
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Why is it difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures?
Answer:
1. It is not easy to get funds for a start up, as many banks do not consider it as a successful decision to provide loan to a start up, as the feasibility of recovery of loan cannot be identified and guaranteed.
2. Venture capitalists also faces the same issue as of bank, also they are large equity investors and tend to invest in even larger project.
3. Private investors do not blindly invest and rather are more cautious then banks or venture capitalists, as because they do not huge funds to invest, and with less amount of investment they need even higher assurance.
4. Public stock is never available for a start up as for public stock issue you need great credibility, and good previous record.
The price that the writer of a call option receives for the underlying asset if the buyer executes her option is called the
Answer:
D. strike price or exercise price.
Explanation:
The strike price is the price at which the price is defined at the time when the option holder could purchase in case of the call option and sell in case of put option, also the option is exercised when the security is underlying
Plus, the strike price another name is the exercise price
Therefore the given situation is known as strike price or exercise price.
A _____ is an alternative method to cash dividends that is used to distribute a firm's earnings to shareholders.
Answer:
"Share Repurchase " would be the correct one.
Explanation:
Application whereby a company is buying back one's free-market stock. Typically it occurs whenever the shares are oversold or overvalued. Even though repurchase decreases the number of common shares and therefore also raises the return on equity, it helps in enhancing the equity value of the investment investors and shareholders kept."can charge a different price for each customer based on that buyers willingness to pay, they would:"
Answer: b. Producer surplus is maxmized
Explanation:
As a result of inefficiency in a monopoly market, there exists a deadweight losses that arises because customers lose surplus due to not getting the optimal price. As a result, they are unwilling to spend at a certain amount to buy goods and services which leads to a loss for the monopoly as well.
If a monopoly is able to charge a different price for each customer based on that buyers willingness to pay they would be able to capture all the consumer surplus and make it producer surplus so that the producer surplus is maximized.
According to McGregor which of the following characterizes the assumptions of a Theory X manager?
(a) Workers are lazy.
(b) Workers dislike responsibility.
Answer:
All of the above
Explanation:
This theory is one of the theories of work and motivation as it pertains to certain workers. The theory is by Douglas MacGregor
These are the assumptions
1.that many people hate anything work and would do anything they can to avoid working.
2.people are not ambitious. They would rather avoid responsibility
3. People have to be forced to work, so they must be directed.
The holder of a $1,000 face value bond can exchange the bond any time for 25 shares of stock. Then the conversion ratio:
Answer:
Conversion ratio is 25:1
Explanation:
Conversion ratio explains the number of shares that you can get for one bond. Here the number of shares that you are getting for 1 $1000 face value bond is 25 shares. Therefore, the conversion ratio is 25:1
The conversation ratio can also be calculated by dividing the par value of a bond for a share's price. As we do not have the price of 1 share, we will use the quantity to decide the conversion ratio.
If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in sales dollars?
Answer:
$1,875,000
Explanation:
Break even point in sales = Fixed cost / Contribution margin ratio
When Contribution margin ratio = 100% - Variable cost ratio
Contribution margin ratio = 100% - 60%
Contribution margin ratio = 40%
Break even point in sales = $750,000 / 40%
= $1,875,000
At the start of 2071 Cowboy Corp. purchased 25% of Bebop Tech Inc. for $45 million. At the time of purchase, the carrying value of Bebop Tech's net assets was $75 million. The fair value of Bebop Tech's depreciable assets (5 year useful life remaining) was $25 million in excess of their book value. For this year, Bebop Tech reported a net income of $50 million and declared and paid $25 million in dividends. What amount will Cowboy Corp. recognize as additional depreciation at the end of 2071?
A. $6.25 Million
B. $5 Million
C. $1 Million
D. $125 Million
Answer:
B. $5 Million
Explanation:
The amount of additional depreciation that Cowboy Corp. would recognize in the year 2071 is the excess of Bebop Tech Inc.'s fair value of assets over the book value divided by the useful life remaining which is 5 years
The excess of fair value of assets over book value was $25 million
The remaining useful in respect of the assets was 5 years
The additional depreciation recognizable=$25 milion
The additional depreciation =$25 million/5
The additional depreciation=$5 million