Answer:
b. amortization of premium on bonds payable
Explanation:
The Indirect method reconciles the Operating Income to the Operating Cash Flow by adjusting the Operating Income for (1) Non-Cash Items previously added or deducted from the Operating Income and (2) Changes in working capital items.
Identify five HRM criteria or components that can be used to measure organizational effectiveness or ineffectiveness. "Grievance rate" is an example.
Answer:
They include;
1. Customer Satisfaction
2. Absenteeism
3. Legal Compliance
4. Performance
5. Training
Explanation:
The Human Resource Management criteria that are used to measure the effectiveness or ineffectiveness of an organization, are a list that gives an idea of how an organization is performing, and this list can serve as a basis of comparison with other organizations. These options include;
1. Satisfaction: If the employees are treated fairly and so, feel satisfied with the organization, then they can be said to be effective.
2. Absenteeism: When workers are always absent from work it does not present the organization as an effective one.
3. Legal Compliance: The organization must be able to comply to government rules and regulations guiding the business to be rated as effective.
4. Performance: High or low-performance which is reflected in the turnover rates would be an indication of how effective or ineffective an organization is.
5. Training: The organization should be able to provide regular standard training for its workers to be rated as effective.
PlZ Help 70 points
Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between the business and factor market. (4 points)
Answer:
Family and government are related to each other in terms of financial unit. Family pay charges to government and after that government utilize that cash for the individuals. Family gain the money by working in firms or by running their possess commerce. Natural issues such as discuss contamination can influence the relationship between family and government. Popleuses their possess transport to go to firms and the number of vehicles are expanding day by day which causes discuss contamination. The government can shape arrangements against personal transport and persuade individuals to utilize open transport which can be advantageous for government as government will straightforwardly get cash from family.
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The operating margin measures tells you that for every dollar of sales XXXX dollars makes it to the net income line on the income statement.
A. True
B. False
Answer:
A. True
Explanation:
The Operating Margin is the profit obtained for every dollar of sale and this is the sames as saying a certain amount of sales makes it to the net income line on the income statement.
"A small business owner of a firm that has 25 employees wants to establish a retirement plan and make contributions for her employees. What type of plan can the employer establish?"
Answer:
SEP IRA
Explanation:
For this type of company, the best type of plan would be a SEP IRA. This refers to a Simplified Employee Pension Plan and is a plan that is set up by an employer, with deductible contributions made by the employer themselves. The employer sets the actual contribution rate when creating the plan, and provides all employees the same contribution rate. The annual contribution of such an account is capped at $56,000 in 2019 and the individuals may withdraw the total amount of the account tax-free when they turn 59 1/2 years old.
Which of the following refers to how companies remain in business? sustainability corporate social responsibility carbon footprint closed-loop supply chains economic sustainability
Answer:
Economic sustainability
Explanation:
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 235,000 September 1, 2021 $ 342,000 December 31, 2021 $ 342,000 March 31, 2022 $ 342,000 September 30, 2022 $ 235,000 Kendall borrowed $764,000 on a construction loan at 7% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,570,000 in 7% bonds payable outstanding in 2021 and 2022. Average accumulated expenditures for 2021 was:
Answer:
Average accumulated expenditures for 2021 was: $349,000.
Explanation:
Note: See the attached excel file for the calculation of the Average accumulated expenditures for 2021.
Average accumulated expenditures is calculated by adding the weighted average amount of each expenditure which is the product of the weight of each expenditure in a year and the amount of each expenditure. That is;
Weight of each expenditure = Number of relevant months the expenditure is used 2021 / 12 months
Weighted average amount of each expenditure = Weight of each expenditure * The amount of the expenditure
Journalize the following, assuming a 360-day year is used for interest calculations: Apr. 30 Issued a $108,000, 30-day, 6% note dated April 30 to Misner Co. on account. May 30 Paid Misner Co. the amount owed on the note dated April 30. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar.
Answer and Explanation:
The journal entries are shown below:
a. Account payable Dr $108,000
To note payable $108,000
(Being the issuance of the note is recorded)
b. Note payable Dr $108,000
Interest expense Dr $540 ($108,000 × 30 days ÷ 360 days × 6%)
To cash $108,540
(being the note payable and the interest expense is recorded)
Other things held constant, if a bond indenture contains a call provision, the yield to maturity that would exist without such a call provision will generally be____ the YTM with a call provision.
Answer:
Other things held constant, if a bond indenture contains a call provision, the yield to maturity that would exist without such a call provision will generally be lower than the YTM with a call provision.
Explanation:
That is the correct answer to the question asked about bond indenture.
On January 1 of the current year, Paisley Company issues a 4-year, non-interest-bearing note with a face value of $7,000 and receives $4,852 in exchange. The recording of the issuance of the note includes a
Answer and Explanation:
The journal entry is shown below:
Cash Dr $4,852
Discount on note payable $2,148
To Note payable $7,000
(Being the issuance of the note is recorded)
Here we debited the cash and discount on note payable as it increased the assets and discount are always debited and credited the note payable as it also increased the liabilities so that the proper posting could be done
Household members tend to have different preferences, but empirical evidence shows that overall, most households are Pareto efficient.
a. True
b. False
As the leader of your newly formed 9-person team, one of your key concerns is that the team performs as a cohesive unit. Which of the following descriptions is most likely to indicate that your team is cohesive?
A. There is very little conflict between team members.
B. Team members prioritize the team’s goals over their own goals.
C. Whenever tackling a new team task, members typically divide into the same 3 subgroups.
D. Team members have no problem working independently or alone.
Answer:
b. Team members prioritize the team’s goals over their own goals.
Explanation:
Team cohesiveness is mostly seen in teams that perform highly. People in such teams are usually more likely to cooperate and they have an effective way of achieving their set objectives.
Team cohesiveness would have members of a team acting together rather than individually. It is an interpersonal relationship that is alive within members of the group and this pushes and motivates them to participate more and do what is necessary to achieve all of their objectives.
Discount stores that try to keep prices as low as possible are more likely to function using ________ operations.
Answer: self service
Explanation:
Discount stores that try to keep prices as low as possible are more likely to function using self service operations.
Self-Service Operations is quite a straightforward concept whereby the individuals will have to serve themselves. An example of such is discount houses that deals with clothing.
9) Selected information regarding a company's most recent quarter follows (all data in thousands). 9) _______ Direct labor $540 Beginning work in process inventory $330 Ending work in process inventory $420 Cost of goods manufactured $1620 Manufacturing overhead $830 What was the cost of direct materials used for the quarter
Answer:
Direct material= $340
Explanation:
Giving the following information:
Direct labor $540
Beginning work in process inventory $330
Ending work in process inventory $420
Cost of goods manufactured $1620
Manufacturing overhead $830
To calculate the direct material used in production, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
1,620= 330 + DM + 540 + 830 - 420
Direct material= $340
Which of the following statements regarding fiscal policy are true according to the macroeconomic consensus in the United States?
a. Congress, not the Federal Reserve, should be in charge of monetary policy.
b. Expansionary monetary policies should be used to keep unemployment below its natural rate.
c. Monetary policy should focus on price stability.
Answer: Monetary policy should focus on price stability.
Explanation:
The statements regarding fiscal policy that is true according to the macroeconomic consensus in the United States is that monetary policy should focus on price stability.
The statements that Congress, not the Federal Reserve, should be in charge of monetary policy and that Expansionary monetary policies should be used to keep unemployment below its natural rate are both wrong.
If network externalities exist in an industry, the ________ firm to enter the market is often the one that succeeds in dominating the industry.
Answer: first
Explanation:
Network externality simply has to with how the demand for a product by other consumers influences ones decision to buy that particular product or service.
When network externalities exist in an industry, it should be noted that the first firm to enter the market is often the one that succeeds in dominating the industry. This is because it is from this particular firm that the consumers will make purchases from .
Torque corporation is expected to pay a dividend of $1 in the upcoming year. dividends are expected to grow at a rate of 6% per year. the risk free rate of return is 5% and the expected return on the market portfolio is 13%. the stock of torque corporation has a beta of 1.2. what is the return you should require on torque stock?a) 12%,
b) 14.6%,
c) 15.6%,
d) 20%
Answer:
The required rate of return on stock is 14.6% and option b is the correct answer.
Explanation:
The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.
The equation is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free rate rM is the return on market
r = 0.05 + 1.2 * (0.13 - 0.05)
r = 0.146 or 14.6%
Lucas Corp. has a debt-equity ratio of .8. The company is considering a new plant that will cost $115 million to build. When the company issues new equity, it incurs a flotation cost of 8.5 percent. The flotation cost on new debt is 4 percent.
A. What is the initial cost of the plant if the company raises all equity externally?
B. What is the initial cost of the plant if the company typically uses 55 percent retained earnings?
C. What is the initial cost of the plant if the company typically uses 100 percent retained earnings?
Answer:
$122,475,000; $119,489,600; $117,047,000
Explanation:
Given the following :
Cost of new plant = $115m
Debt to equity ratio =. 0.8
After issuing new equity:
Floatation cost incurred (equity) = 8.5%
Floatation on new debt = 4%
Calculating weighted return of debt and equity:
Debt: = [0.8/(1 + 0.8)] × 4% = 0.0178
Equity : [1 / (1+ 0.8)] * 8.5% = 0.0472
A) all equity raised externally:
Weighted average Floatation cost:
0.0178 + 0.0472 = 0.065
Initial cash flow will the be :
(1 + 0.065) * cost of new plant
1.065 * $115,000,000 = $122,475,000
B.) company uses 55% Retained earning:
Weighted return on equity will the be :
0.0472 * (1 - 55%) = 0.02124
Weighed Floatation cost = 0.02124 + 0.0178 = 0.03904
(1+0.03904) * $115,000,000 = $119,489,600
C.) Company uses 100% Retained earnings :
Equity return will be 0%
(1 + 0.0178) * 115000000
= $117,047,000
The Chinese government chooses to control the value of its currency so that it is consistently worth some fixed amount of U.S. dollars. Which of the following terms would relate to what the Chinese government would be doing?
a. floating exchange rate
b. flexible exchange rate
c. exchange rate freedom
d. pegged exchange rate
Answer: pegged exchange rate
Explanation:
A pegged exchange rate also referred to as the fixed exchange rate, sometimes is an exchange rate regime type whereby the value of a currency is fixed by the monetary authority of a particular country against the value of the currency of another country.
This is the type of exchange rate used by the Chinese government in the question above.
Q3) Creative Sports Design (CSD) manufactures a standard-size racket and an oversize racket. The firm’s rackets are extremely light due to the use of a magnesium-graphite alloy that was invented by the firm’s founder. Each standard-size racket uses 0.125 kilograms of the alloy and each oversize racket uses 0.4 kilograms; over the next two-week production period only 80 kilograms of the alloy are available. Each standard-size racket uses 10 minutes of manufacturing time and each oversize racket uses 12 minutes. The profit contributions are $10 for each standard-size racket and $15 for each oversize racket, and 40 hours of manufacturing time are available each week. Management specified that at least 20% of the total production must be the standard-size racket. How many rackets of each type should CSD manufacture over the next two weeks to maximize the total profit contribution? Assume that because of the unique nature of their products, CSD can sell as many rackets as they can produce.
Answer:
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total profit contribution = (165 x $15) + (42 x $10) = $2,895
Explanation:
materials machine hours profit
standard size 0.125 kg 1/6 $10
oversize 0.4 kg 1/5 $15
constraints 80 kilograms of materials
40 hours of manufacturing
profit per machine hour:
standard size $10 x 6 = $60 x 40 hours = $2,400 (total possible production = 240 rackets)
oversize $15 x 5 = $75 x 40 hours = $3,000 (total possible production = 200 rackets)
profit per kilogram of alloy:
standard size $10 / 0.125 = $80 x 80 kgs = $6,400 (total possible production = 480 rackets)
oversize $15 / .4 = $37.50 x 80 hours = $3,000 (total possible production = 200 rackets)
since the most important constraint is the manufacturing hours available, the company should try to produce the products that yield the highest contribution margin per machine hour. In this case, at least 20% of total production must be standard size rackets, so the remaining 80% should be oversize rackets that yield a higher profit.
165 oversize rackets = 32 machine hours (79.71% of total production)
42 standard size rackets = 7 machine hours (20.29% of total production)
total manufacturing time = 40 hours
if we produce 166 oversize rackets and 41 standard size rackets, total manufacturing time will exceed 40 hours (40.03 hours exactly).
According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2016. Let's see whether these changes are reflected in the income statement of Computer Tycoon Inc. for the year ended December 31, 2016.
2016 2015
Sales Revenue $ 109,000 $ 133,500
Cost of Goods Sold 64,500 75,100
Gross Profit 44,500 58,400
Selling, General, and Administrative Expenses 36,900 38,800
Interest Expense 590 520
Income before Income Tax Expense 7,010 19,080
Income Tax Expense 1,500 5,900
Net Income $ 5,510 $ 13,180
Required:
1. Compute the times interest earned ratios for 2016 and 2015. (Round your answers to 1 decimal place.) Times Interest Earned 2015 2016
2. Does Computer Tycoon generate sufficient net income in both years before taxes and interest) to cover the cost of debt financing?
a. Yes
b. No
Answer:
A.
2015 37.7
2016 12.9
B. Yes
Explanation:
Computation of the times interest earned ratios for 2016 and 2015
First step is to find the EBIT
EBIT: 2016 $ 2015 $
Gross profit 44,500 58,400
Less Selling, General and Administrative expenses (36,900) (38,800)
EBIT 7,600 19,600
Second step is to compute the times interest earned ratios for 2016 and 2015 using this formula
Time interest earned = EBIT / Interest expense
Let plug in the formula
Time interest earned 2016 2015
EBIT $7,600 $19,600
÷Interest expense $590 $520
=Time interest earned 12.9 37.7
Therefore the Time interest earned will be :
2015 37.7
2016 12.9
2. Yes Computer Tycoon generate sufficient net income in both 2015 and 2016 before taxes and interest in order to cover the cost of debt financing.
On March 15, a fire destroyed Sheridan Company's entire retail inventory. The inventory on hand as of January 1 totaled $5900000. From January 1 through the time of the fire, the company made purchases of $2032000, incurred freight-in of $242000, and had sales of $4140000. Assuming the rate of gross profit to selling price is 20%, what is the approximate value of the inventory that was destroyed
Answer:
the approximate value of the inventory that was destroyed is $4,862,000.
Explanation:
Use the Gross Profit percentage to find the value of the inventory that was destroyed.
Sales $4,140,000
Less Cost of Goods Sold
Opening Inventory $5,900,000
Add Purchases $2,032,000
Add Freight In $242,000
Available $8,174,000
Less Inventory Lost ($4,862,000)
Cost of Sales (3,312,000)
Gross Profit at 20% $828,000
Conclusion :
The Value of inventory that was destroyed is $4,862,000.
A perpetual bond with a par value of $1,000 and a coupon rate of 8.25% (semiannual coupon) has a current market price of $935. What is its yield to maturity?
Answer:
8.88%
Explanation:
Price of the perpetual bond = Interest / Cost of debt
$935 = 82.50 / Cost of debt
Cost of debt = 82.50 / 935
Cost of debt = 0.08824
Cost of debt = 8.88%
A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a(n) ________ structure.
On July 1, 20Y7, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:
A. Opened a business bank account with a deposit of $25,000 from personal funds.
B. Purchased office supplies on account, $1,850.
C. Paid creditor on account, $1,200.
D. Earned sales commissions, receiving cash, $41,500.
E. Paid rent on office and equipment for the month, $3,600.
F. Withdrew cash for personal use, $4,000.
G. Paid automobile expenses (including rental charge) for the month, $3,050, and miscellaneous expenses, $1,600.
H. Paid office salaries, $5,000.
I. Determined that the cost of supplies on hand was $950; therefore, the cost of supplies used was $900.
What would the Financial Statement look like?
Answer:
Explanation:
A) Debit cash 25,000 , credit capital 25,000
B)Credit Payable 1850 , Debit supplies 1850
C) Credit cash (1200), Debit payable (1200)
D) Debit cash 41,500 , credit sales commission 41,500
E)Credit cash (3600). debit rent 3,600
F)Credit cash ( 4000), debit drawings 4000
G)credit cash (4,650), debit automobile 3,050,miscellaneous 1600
H) Credit cash (5,000), debit salaries 5000
i)Credit supplies (900) debit supplies expense 900
Overall total
Cash = 25000-1200+41500-3600-4000=4650-5000 48,050
Supplies = 1850 -900 =950
Account payable = 1850-1200 =650
Capital = 25,000
Drawing =4000
Sales commission = 41,500
Salaries = 5,000
Rent = 3,600
Automobile expenses =3050
Miscellaneous expenses =1600
Supplies expenses = 900
Income statement
Revenue ( sales commission ) 41,500
Expenses
salaries 5,000
Rent 3,600
Supplies 900
Automobile 3,050
Miscellaneous 1,600
Total expenses 14,150
Gross profit 27,350
Statement of financial position
Assets
Cash 48,050
Supplies 950
Total 49,000
Liabilities
Account payable 650
Capital 25,000
Drawing (4000)
Total 21,650
Owners equity 27,350
Total liabilities and equities 49,000
Owners equity = ( sales commission - salaries - rent -supplies - automobile -miscellaneous )
Turnbull Co. has a target capital structure of 58% debt, 6% preferred stock, and 36% common equity. It has a before-tax cost of debt of 8.2%, and its cost of preferred stock is 9.3%. If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be 12.4%. However, if it is necessary to raise new common equity, it will carry a cost of 14.2%. If its current tax rate is 40%, how much higher will Turnbull’s weighted average cost of capital (WACC) be if it has to raise additional common equity capital by issuing new common stock instead of raising the funds through retained earnings? (Note: Round your intermediate calculations to two decimal places.)
Answer:
Turnbull's weighted average cost of capital will be higher by 0.65% if it has to raise additional common equity capital.
Explanation:
By combining the WACC formula and retained earnings cost of capital,we will arrive at;
WACC = Debt W × after tax cost of debt + Preferred stock weight × cost of capital + Equity W × Cost of capital
= 58% × 4.92% + 6% × 9.3% + 36% × 12.4%
= 2.85% + 0.56% + 4.46%
= 7.87%
Also, using the same WACC formula and using common equity cost of capital, , we will arrive at the below;
WACC = Debt W × after tax cost of debt + preferred stock weight × cost of capital + Equity W × cost of capital
= 58% × 4.92% + 6% × 9.3% + 36% × 14.2%
= 2.85% + 0.56% + 5.11%
= 8.52%
Therefore, increase cost using common equity over retained earnings is [ 8.52% - 7.87%]
= 0.65%
N.B we arrived at 4.92% for after tax by;
Pre tax 8.2%
Current tax rate 40%
= Pre tax × ( 1 - cost of debt)
= 8.2% × ( 1 - 40%)
= 8.2% × 0.6%
= 4.92%
There is strong evidence that many investors suffer from familiarity bias and overconfidence bias. Can you explain why these biases might exist
Answer:
The bias of most investors suffering from familiarity or overconfidence bias can be attributed to human factor of being comfortable with what the person knows. For example, Investor A knows the owner of Company B, he or she would be comfortable to invest in Company B because he or she is familiarize with the owner or the company.
On the other-hand, when an investor reviews the businesses that he or she has invested in that are doing well, the individual will become overconfident in his or her ability to know and find good prospects to invest. The investor will become laid back in doing his investigation before investing in subsequent businesses.
Explanation:
Delta Distributors has accounts receivable of $2,750,000 and average daily credit sales of $118,280. The firm offers credit terms of 2/10, net 30. On average, what is the firm's accounts receivable period?
Answer:
The firm's accounts receivable period is 23.25 days
Explanation:
Accounts receivable period = 365 / Account receivable turnover ratio
When Account receivable turnover ratio = Net sales / Account receivables
Account receivable turnover ratio = 118,280 * 365 days/ 2,750,000
Account receivable turnover ratio = 15.698
Hence, Account receivable period = 365 / 15.698
Account receivable period = 23.25 days
Consider a project with a first cost (investment) of $250,000, an annual O&M cost of $50,000, annual revenue of $160,000, and a salvage value of $40,000 after a 10-year life. Find the annual worth of the project assuming an interest of 12% per year.
Answer:
$68,030
Explanation:
According to the given situation, the computation of annual worth is shown below:-
Annual worth = -250,000 (A/P, 12%, 10) - $50,000 + $160,000 + $40,000 (A/F, 12%, 10)
= -$250,000 × 0.1770 - $50,000 + $160,000 + $40,000 × 0.0570
= -$44,250 - $50,000 + $160,000 + $2,280
= $68,030
So, the right answer is $68,030
The shareholders' equity of Green Corporation includes $376,000 of $1 par common stock and $560,000 par of 7% cumulative preferred stock. The board of directors of Green declared cash dividends of $66,000 in 2021 after paying $36,000 cash dividends in each of 2020 and 2019. What is the amount of dividends common shareholders will receive in 2021
Answer:
The amount of dividends common shareholders will receive in 2021 is $20,400
Explanation:
Arrears in Preferred Stock Dividend = (560,000*7%*2 - 36,000 - 36000)
Arrears in Preferred Stock Dividend = 78,400 - 36,000 - 36,000
Arrears in Preferred Stock Dividend = $6,400
Current Preferred Stock Dividend = 560,000 * 7%
Current Preferred Stock Dividend = $39,200
The amount of dividends common shareholders = $66,000 - $39,200 - $6,400
The amount of dividends common shareholders = $20,400
5. Suppose that a firm is in an industry which has a very rapid rate of growth (in sales and output), and is characterized by technological change and innovation. Firms attempt to maximize profits causing new firms to enter the industry attracted by profit potential. The result is that profits are competed away, leading to even greater innovation and change. Is there a limit to this continuous change
Answer:
If we use high tech industry as our subject here, I would say that there is no limit to continuous change. We can look at he last 45 years and ever since Steve Jobs developed the Apple I, PCs have continuously evolved into different products and their rate of technological evolution has currently increased. Any modern smartphone is hundreds of times more powerful than the first PCs, they are even more powerful than huge computers that existed back then. Currently high tech companies are trying to develop AI, and who knows what after. The only problem is that project lives tend to be very short, but that is part of the game. The profit margins of the firms that are successful are huge, just look at how Apple became the first company to be worth more than 2 trillions.