Answer and Explanation:
a. Investment in bonds Dr, $190 million
To Discount on bond investment $30 million
To Cash $160 million
(Being purchase of investment is recorded)
b. Cash Dr, ($190 × 8% × 6 ÷ 12) $7.6 million
Discount on bond investment Dr, $0.4 million
To Interest revenue ($160 × 10% × 6 ÷ 12) $8 million
(Being interest on bonds is recorded)
c. The computation of investment in the December is shown below:-
Bond investment $190 million
Less: discount on bond investment ($30 - $0.4) -$29.6 million
Amortization cost $160.40 million
As the company reports fair value of $190 million in its balance sheet. Also the timing of selling and purchase the investment is decided by the management as there is a market value, available for sale securities, the market rate of return varies and the short term, as well as the long term securities, are also invested
d. Cash Dr, $190 million
Discount on Bonds investment Dr, $29.6 million ($30 million - $0.4 million )
Loss on sale of bonds Dr, $29.6 million
To Investment in bonds $190 million
(Being sale of bonds is recorded)
Annabelle owns an Italian ice shop. If she decided to expand the size of her shop so that she could sell more Italian ices, how would she know if she is experiencing economies of scale in the long run
Answer:
her long-run average cost of selling each Italian ice decreases.
Explanation:
Economies of scale is when a firm produces more units of goods or services on a much larger scale, with very little input cost(average cost). Invariably, this implies that the production units of a firm increases as it grows while having a decreased input costs.
A firm will experience economies of scale in the long run if it's average total costs(cost per unit required for production which remains the same irrespective of output) decreases as it increases its scale of production.
Consider the relative liquidity of the following assets:
Assets
1. The funds in a money market account
2. A $5 bill
3. A share in a publicly traded company
4. Your house
Select the assets in order of their liquidity, from most liquid to least liquid.
Most Liquid
Second-Most Liquid
Third-Most Liquid
Least Liquid
Answer:
Liquidity of an asset refers to how easily convertible the asset is to cash or so called liquid money.
Most Liquid - A $5 bill
This is already cash so it is the most liquid there is.
Second-Most Liquid - The funds in a money market account
Funds in a money market account are the second most liquid because most often they can simply be withdrawn from the fund. There might be limits on the number of withdrawals allowed though within a period.
Third-Most Liquid - A share in a publicly traded company
A share in a publicly trade company ranks here because to realize the cash, one would need to sell the share first.
Least Liquid - Your house
Your house will be the most difficult of these to liquidate as it will involve a much longer process to eventually get it sold and realize cash. The process will include but will not be limited to, advertising, hiring realtors, inspection etc.
Martin Enterprises needs someone to supply it with 118,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $785,000 to install the equipment necessary to start production costs will be $415,000 per year, and your variable production costs should be $10.05 per carton. You also need an initial investment in net working capitalof $68,000.If your tax rate is 24 percent and you require a return of 12 percent on your investment, whar bid price should you submit?
Answer:
$15.66 per carton
Explanation:
118,000 cartons of machine screws
equipment cost $785,000
depreciation per year = $785,000 / 5 = $157,000
fixed manufacturing costs $415,000 per year
variable costs per carton = $10.05 x 118,000 = $1,185,900
initial investment in net working capital $68,000
tax rate 24%
discount rate 12%
price per carton?
initial investment = -$853,000
CF₁ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320
CF₂ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320
CF₃ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320
CF₄ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320
CF₅ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 + $68,000 = 0.76R + $1,110,320
$853,000 = (0.76R - $1,178,320) / 1.12 + (0.76R - $1,178,320) / 1.12² + (0.76R - $1,178,320) / 1.12³ + (0.76R - $1,178,320) / 1.12⁴ + (0.76R + $1,110,320 ) / 1.12⁵ = 0.6786R - $1,052,071.43 + 0.6059R - $939,349.49 + 0.541R - $838,704.90 + 0.483R - $748,943.66 + 0.4312R + $630,025.39
$853,000 = 2.7397R - $4,209,094.87
$5,062,094.87 = 2.7397R
R = $5,062,094.87 / 2.7397 = $1,847,682.18
total revenue = $1,847,682.18
revenue per carton = $1,847,682.18 / 118,000 = $15.6583 = $15.66
Cara Industries incurred the following costs for 50,000 units:
Variable costs $90,000
Fixed costs 120,000
Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $4,250 for shipping.
If Cara wants to break even on the order, what should the unit sales price be?
A. $4.2
B. $5.05
C.$1.8
D. $2.65
Answer:
Selling price= $2.65
Explanation:
Because it is a special offer, and there is unused capacity, we will take into account only the incremental fixed costs.
First, we need to calculate the unitary variable cost:
Unitary variable cost= 90,000/50,000= $1.8
Now, we can determine the total unitary cost and the selling price per unit:
Total unitary cost= (4,250/5,000) + 1.8= $2.65
Selling price= $2.65
Fed is open to changing bond policy Fed policymakers signaled for the first time that they could increase or decrease stimulation of the economy in the future, but not now. Source: Los Angeles Times, May 1, 2013 What are the ripple effects and time lags that the Fed must consider in deciding when to increase or decrease stimulation of the economy?
Answer:
When the Fed raises the federal funds rate, the inflation rate decreases about two years later.
Explanation:
When trying to stimulate the economy either by increasing or decreasing, policymakers have to take into consideration how it would effect interest rate, amount of money available in the economy, loans that would be acquired by banks and the behavior of interest rate.
Interest rate can be impacted quickly even though the period of time it would take for such action to have a reflection on what quantity of money is available in the economy. Then also a period of 2 years would be taken for this action to take effect on inflation.
Therefore
When the Fed raises the federal funds rate, the inflation rate decreases about two years later.
Prentice Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700, and sales discounts of $3,475. Prentice's net sales for this period equal:________a. $94,275. b. $177,725 c. $174,250. d. $176,025 e. $172,550.
Answer:
Prentice net sales for the period is ;
e. $172,550
Explanation:
The data below were extracted from the information above;
Cash sales = $94,275
Credit sales = $83,450
Sales returns and allowances = $1,700
Sales discount = $3,475
Therefore, Prentice's net sales for the period
= Cash sales + Credit sales - Sales returns and allowances - discounts
= $94,275 + $83,450 - $1700 - $3,475
= $172,550
Which type of disclosure must be signed by the buyer and the seller in a nonresidential transaction?
Answer: Request to use designated sales associate representation.
Explanation:
The options for the question are:
a. Single agent
b. Consent to transition
c. No brokerage relationship
d. Request to use designated sales associate representation
The type of disclosure must be signed by the buyer and the seller in a nonresidential transaction is the request to use designated sales associate representation.
In this disclosure, both the buyer and the seller must sign a disclosure which will state their assets and determine if the threshold is met.
Eric left high school to work in a factory where he has been for the last 9 years. He married at 19 and has two children. He is unhappy and cynical. He doesn't like working hard to make purchase decisions so he waits until a product is easy to find before he buys.
A. EA
B. EM
C. I
D. L
E. LM
Answer: D. L
Explanation:
Eric is a Laggard. A Laggard is one of the 5 Adopter categories when it comes to new products in the market. These categories define people in terms of when they adopt a product as well as why.
Laggards are the last group to adopt a product. They do not like change and as such will only adopt a product when it is forced on them on when they have no choice because the product is so widespread that everyone is using it. Eric prefers to make a purchase only when it is easy to find. That is when the product has become quite widespread which is during the Laggard adoption stage.
Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Harry Basis Fair Market Value Cash $30,000 $30,000 Land 100,000 120,000 Totals $130,000 $150,000 Sally: Equipment used in a business 200,000 150,000 Totals $200,000 $150,000 Required:a. How much gain or loss will Harry recognize on the contribution? b. How much gain or loss will Sally recognize on the contribution? c. How could the transaction be structured a different way to get a better result for Sally? d. What is Harry's tax basis in his partnership interest? e. What is Sally's tax basis in her partnership interest? f. What is Evergreen's tax basis in its assets? e. Prepare a tax basis balance sheet for the Evergreen partnership showing the tax basis capital accounts for the partners.
Answer:
a. Harry will recognize $0.
b. Sally will also recognize $0.
c. By selling the equipment to an unrelated party and by contributing $150,000 to the partnership instead.
d. Harry's tax basis in his partnership interest is $130,000.
e. Sally's tax basis in her partnership interest is $200,000
f. Evergreen's tax basis in its assets is $330,000
g. Total assets = Total Capital = $330,000
Explanation:
Note: The data in the question are merged together and they are first sorted before answering the questions as follows:
Harry: Basis Fair Market Value
Cash $30,000 $30,000
Land 100,000 120,000
Totals $130,000 $150,000
Sally:
Equipment used in a business 200,000 150,000
Totals $200,000 $150,000
The explanations to the answers are now provided as follows:
a. How much gain or loss will Harry recognize on the contribution?
Harry will recognize $0 because he did not have any debt relief.
The reason is that gain on property contributed by a partner to a partnership will be recognized only when the debt relief they seemed to have received is greater than their basis in the partnership before the distribution.
Since Harry did not have any debt relief, he will therefore recognize $0.
b. How much gain or loss will Sally recognize on the contribution?
Sally will also recognize $0.
It is possible that when partners contributes property to a partnership, loss may not be recognized even if they have debt relief. Therefore, it not in all cases that loss are recognized.
c. How could the transaction be structured a different way to get a better result for Sally?
This transaction could be structured differently if Sally decides to sell the equipment to an unrelated party and then make a cash contribution of $150,000 to the partnership instead of contributing the equipment. As a result of this, it will be possible for Sally to recognize the built-in loss on the equipment by selling it.
d. What is Harry's tax basis in his partnership interest?
The basis of Harry in his partnership interest can be obtained by adding his contribution of cash and land to the partnership as follows:
Harry's tax basis = $30,000 + $100,000 = $130,000.
Therefore, Harry's tax basis in his partnership interest is $130,000.
e. What is Sally's tax basis in her partnership interest?
This is simply the amount of her contribution of $200,000 basis in the equipment.
Therefore, Sally's tax basis in her partnership interest is $200,000.
f. What is Evergreen's tax basis in its assets?
This can be calculated by adding the Harry's basis in cash and land of $30,000 and $100,000 respectively together with Sally's basis in equipment of $200,000 as follows:
Evergreen's tax basis in its assets = $30,000 + $100,000 + $200,000 = $330,000
Therefore, Evergreen's tax basis in its assets is $330,000.
e. Prepare a tax basis balance sheet for the Evergreen partnership showing the tax basis capital accounts for the partners.
This can be prepared as follows:
Evergreen partnership
Tax Basis Balance Sheet
Particulars Amount ($)
Assets:
Cash 30,000
Equipment 200,000
Land 100,000
Total Assets 330,000
Capital:
Harry's Capital (w.1) 130,000
Sally's Capital (w.2) 200,000
Total Capital 330,000
Workings:
w.1: Harry's Capital = Cash contributed + Land contributed = $30,000 + $100,000 = $130,000
w.2: Sally's Capital = Equipment contributed = $200,000
Best Deals, Inc. has 10 units in ending merchandise inventory on December 31. The units were purchased in November for $160 each. The price lists from suppliers indicate the current replacement cost of the item to be $162 each. What would be the amount reported as Merchandise Inventory on the balance sheet?
A. $1,600
B. $3,220
C. $322
D. $1,620
Answer:
$1,600
Explanation:
Best deals incorporation has a total of 10 units in the ending merchandise inventory on December 31
The units were bought in the month of November at a price of $160 for each unit
The replacement cost of the item is $162
Inventory is always recorded when the cost is low
Therefore, the amount that is to be reported as the merchandise inventory can be calculated as follows
=10 units × $160
= $1,600
Hence the amount reported as the merchandise inventory on the balance sheet is $1,600
A location decision for a traditional department store (e.g., Macy's) would tend to have what type of focus? revenue focus environmental focus labor focus education focus cost focus
Answer: revenue focus
Explanation:
A location decision for a traditional department store (e.g., Macy's) would tend to have revenue focus. For every organization or company, revenue plays a vital role in the organization.
A traditional department store will shift its focus to a location whereby it can meet the needs of the people daily and generate as much revenue as possible.
Question 4 James Bennett also allocates wealth between youth and old age. He has no cash currently (in his youth), but will inherit $3000 in his old age. He can lend and borrow at the bank at 18% (that is, lending $1 in youth will give him $1.18 in old age). He has an investment opportunity that costs $12,000 now in his youth and has a payoff of $15,000 in his old age. This is the only investment opportunity available to him. What is the most he can consume in his youth
James Bennet needs us to locate investment opportunities for him.
James divides his fortune between youth and old age, as is shown to us. He is currently cashless.
He has access to bank borrowing and lending at 18%.
Some investment opportunities are presented to him.
Investing is the act of placing money into a bank, a piece of property, or a company.
Savings can also take the form of investments.
The most he should spend while still young is $15,254.23.
This calculation is displayed.
The future value is the present value times 1.18.
Future worth = $15,000 + $3,000
= $ 18,000
Therefore, the present value is equal to $18,000 divided by 1.18.
= $ 15, 254.23.
The value that represents today's value is referred to as present value.
Consequently, we might infer that the greatest amount is $15,254.23 that he can spend during his childhood.
Learn more about present value here
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A study of over 12,000 employees found that ________ had engaged in such workplace misbehaviors as goldbricking, sick time abuses, and/or fraud at least once.
Answer:
90%
Explanation:
According to the study of over 12,000 employees, it is found that 90% has engaged in the workplace with respect to the misbehaviors in terms of goldbricking, sick time abuses, or fraud at lease one time
here goldbricking means working less as your capability as they are more focused to do a personal task
So the correct answer is 90%
what are the impacts of political environment on business?
Answer:
as u try to do the benefit of your representative and try to win
Polly Khan is trying to calculate the current market rate given the following information: Investor’s have been requiring a 12% annual return on Builtrite’s stock which has a beta of 2.0 and the current risk-free rate is 4%. What is the current market rate?
Answer:
The current market rate is 8%
Explanation:
The market rate is the return on market or the market portfolio. To calculate the market rate (rM) we will use the CAPM equation which is used to calculate the required rate of return on a stock or portfolio. The formula for required rate of return under CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free raterM is the market rateWe already know the value of r, rRF and Beta. We will input these values in the above equation to calculate the market rate.
0.12 = 0.04 + 2 * (rM - 0.04)
0.12 - 0.04 = 2 * rM - 0.08
0.08 + 0.08 = 2 * rM
0.16 / 2 = rM
rM = 0.08 or 8%
Lakeland Consulting started the year with total assets of $30,000 and total owner's equity of $20,000. During the year a) assets increased by $20,000, b) the business recorded $45,000 in revenues, c) the business recorded $30,000 in expenses, and d) the owner withdrew $5,000 for personal use. Liabilities at the end of the year were:
Answer:
Liabilities at the end of the year were: $15,000.
Explanation:
Using the Accounting Equation : Assets = Equity + Liability
Then we know that,
Liability = Assets - Equity
Opening Balance of Liabilities ( $30,000 - $20,000) = $10,000
Adjustment during the year ($20,000 - ($45,000 - $30,000)) = $5,000
Ending Balance of Liability = $15,000
Conor Airlines Inc. recently issued $50 par value preferred stock that pays a 8.25% dividend rate per year. Yahoo.finance shows that the stock has a beta of 0.97. The current risk-free rate is 2.50% and the market return is 11%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock?
Answer: $38.39
Explanation:
First calculate the required return according to CAPM;
Required return = Risk free rate + beta ( market return - risk free rate)
= 2.50% + 0.97 ( 11% - 2.50%)
= 10.745%
Then using the Dividend discount model and remembering that there is no growth rate;
Value = Next dividend / ( required return - growth rate)
= (50 * 8.25%) / ( 10.745% - 0)
= 4.125/10.745%
= $38.39
Answer:
$38.29
Explanation:
Ke = Rf+Beta*(Rm-Rf)
Ke=0.0250+0.97*(0.11+0.0250)
Ke=0.10745
Ke=10.75 appr.
Po= Dividend / (Ke-g)
Po= 50*0.0825 / (0.10745 - 0)
Po=4.125/0.10745
Po=38.3899
Po=38.29
Thus, the intrinsiv value of this preferred stock is $38.29
Concert Hall sells season tickets for six events at a price of $78. In pricing the tickets, the planners assigned the leadoff event a value of $23 because the program was an expensive symphony orchestra. The last five events were priced equally; 1,470 season tickets were sold for the 2013 season. Required: a. Calculate the theater's earned revenue after the first three events have been presented.
Answer: $66,150
Explanation:
The leadoff event is priced at $23 out of the $78 and the rest of the 5 events will be priced equally.
This means that after the first event, the other 5 will cumulatively be valued at;
= (78 - 23)/5
= $11
The other events are priced at $11 each.
For the first 3 events therefore;
First event = $23 and the other 2 events are $11 each;
= 23 + 11 + 11
= $45
Tickets sold are 1,470;
Revenue from first 3 = 45 * 1,470
= $66,150
Because of higher gasoline prices, firms using gasoline intensively in the production or distribution of their goods have experienced:_______.
Answer:
An upward shift in their MC, AVC, and ATC curves.
Explanation:
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be ______, and the gross profit must be ______. Review Later
Answer:
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be 40%, and the gross profit must be $17,250.
Explanation:
The income statement is missing, so I looked it up and the information given was:
Revenue 100,000 COGS 40,000 Gross Profit 60,000 Salaries Marketing Rent Earnings Before Tax 23,000Income Tax 25% Net Income ?Since COGS are$40,000 and total sales are $100,000, the COGS margin percentage = 40,000 / 100,000 = 40%
Since earnings before taxes are $23,000 and taxes are 25%, then net income = $23,000 x (1 - 25%) = $23,000 x 75% = $17,250
A company has net income of $925,000; its weighted-average common shares outstanding are 185,000. Its dividend per share is $0.70, its market price per share is $93, and its book value per share is $83.50. Its price-earnings ratio equals:
Answer:
$18.60
Explanation:
Calculation for the price-earnings ratio
Using this formula
Price-Earnings Ratio = Market Price per Share/ Earnings per share
The Earnings per share will be Net Income/(Weighted-Average Common Shares Outstanding)
Let plug in the formula
Price-Earnings Ratio = $93 / ($925,000 / 185,000)
Price-Earnings Ratio=$93/5
Price-Earnings Ratio=$18.60
Therefore the price-earnings ratio will be $18.60
The following is a partial trial balance for the Green Star Corporation as of December 31, 2018: Account Title Debits Credits Sales revenue 1,300,000 Interest revenue 30,000 Gain on sale of investments 50,000 Cost of goods sold 720,000 Selling expenses 160,000 General and administrative expenses 75,000 Interest expense 40,000 Income tax expense 130,000 Required: Prepare a multiple-step income statement for 2018.
Answer:
Multiple-step income statement for 2018.
Sales revenue 1,300,000
Cost of goods sold (720,000)
Gross Profit 580,000
Less Operating Expenses :
Gain on sale of investments 50,000
Selling expenses (160,000)
General and administrative expenses (75,000) (185,000)
Operating Profit 395,000
Less Non - Operating Expenses :
Interest revenue 30,000
Interest expense (40,000)
Income tax expense (130,000) (140,000)
Net Income / (Loss) 225,000
Explanation:
The Multi-step Income statement shows separately Profit derived from Primary Activities (Operating Profit) of the company against profit and the profit derived from the Secondary Activities (Net Profit) of the company.
"PowerSurge, a company selling batteries in a monopolistically competitive market, collected the data below of revenues and costs. Assuming the firm is producing at the profit-maximizing level of output, calculate total profit for PowerSurge."
Answer:
Since the firm is maximizing its profit, it is producing and selling 40 units at $30 per unit, resulting in a net profit of $440.
Explanation:
Sine there is no information, I searched for a similar question:
Q Sales revenue Total costs Profit
10 $450 $340 $110
20 $800 $480 $320
30 $1,050 $620 $430
40 $1,200 $760 $440
50 $1,250 $900 $350
60 $1,200 $1,040 $160
70 $1,050 $1,180 -$130
80 $800 $1,320 -$520
90 $450 $1,460 -$1,010
Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara’s home. Is this possible?
Answer: Yes it's possible as long as Tom and Sara gives a written consent to the dual agency arrangement.
Explanation:
From the question, we are informed that Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara’s home.
This is possible as long as Tom and Sara gives a written consent to the dual agency arrangement.
Quality improvement teams are groups of people from various work areas who define, analyze, and solve common production problems.
a. True
b. False
Answer: True
Explanation:
The quality improvement teams are groups of employees that are from various departments who come together and meet regularly in order to define, analyze, and then solve common production problems.
The aim of the quality improvement team is to improve the production process. This is achievable by them working on their methods.
Standard costs are used in companies for a variety of reasons. Which of the following is NOT one of the benefits of using standard costs?
a. to indicate where changes in technology and machinery need to be made
b. to estimate the cost of inventory
c. to plan direct materials, direct labor, and variable factory overhead
d. to control costs
Answer:
a. to indicate where changes in technology and machinery need to be made.
Explanation:
Standard cost in business management refers to the amount of money a product is supposed to cost in manufacturing it. It is a management tool that can be used to measure efficiency in the level of output or production of goods and services at a specific period of time.
In Financial accounting, the difference between the actual cost of each unit of a product and its standard cost is referred to as variance. In order to determine the standard cost of a product, the expected quantity of the product is multiplied by an expected price.
Standard costs are used in companies for a variety of reasons such as;
1. Standard costs are used to estimate the cost of inventory.
2. Standard costs are used to plan direct materials, direct labor, and variable factory overhead.
3. Standard costs are used to control costs.
However, standard costs cannot be used to indicate where changes in technology and machinery need to be made rather an actual cost should be used.
Additionally, the standard cost of each unit of a product manufactured in a business firm is categorized into two (2) and these are;
1. Price standard.
2. Quantity standard.
Joe must pay liabilities of 1,000 due 6 months from now and another 1,000 due one year from now. There are two available investments: \,1. Bond I: a 6-month bond with face amount of 1,000, a 8% nominal annual coupon rate convertible semiannually, and a 6% nominal annual yield rate convertible semiannually; and \,2. Bond II: a one year bond with face amount of 1,000, a 5% nominal annual coupon rate convertible semiannually, and a 7% nominal annual yield rate convertible semiannually Calculate the amount of each bond Joe should purchase in order to exactly match the liabilities.
Answer:
future liabilities:
$1,000 in 6 months
$1,000 in 1 year
Present value of bond I (due in 6 months):
PV = $1,000 / (1 + 3%) = $970.87
Present value of bond II (due in 1 year):
PV = $1,000 / (1 + 3.5%)² = $933.51
The price of the bonds is determined by the annual yield rate (YTM), not the coupon rate. Joe will pay $970.87 for bond I and $933.51 for bond II.
Chuck has $2,500 invested in a bank that pays 4% annually. The length of time it will take for his funds to double is closest to:
Answer:
The answer is 17.67 years.
Explanation:
Present value is $2,500
Future value of the money to be double of the present value. This means the future value will be $5,000($2,500 x 2)
Interest rate is 4%
Number of years or periods to reach this $5,000 is unknown. So we are looking for this.
To compute this number of periods, lets use Financial calculator.
I/Y = 4; PV= -2,500; FV= 5,000; CPT N= 17.67 years.
Therefore, the number of years to accumulate to $5,000 is 17.67 years
A company purchases its inventory from suppliers on account. During the year, its inventory account increased by $17 million and its accounts payable to suppliers decreased by $5 million. If cost of goods sold was $520 million, its cash outflows to inventory suppliers totaled:
Answer: $542 million
Explanation:
The following can be gotten from the question:
The increase in inventory = $17 million
The decrease in the accounts payable = $5 million
The cost of goods sold = $520 million
Inventory Purchased = $520 million + $17 million = $537 million.
The cash outflows to inventory suppliers will be the inventory bought plus the decrease in the accounts payable. This will be:
= $537 million + $5 million
= $542 million
Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to
Complete Question:
Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to
Group of answer choices:
A. increase competition.
B. expand the profit pool.
C. provide better customer service.
D. satisfy regulators
Answer:
B. expand the profit pool.
Explanation:
Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to expand the profit pool.
Generally, all business entities are typically set up to generate revenues by engaging or increasing the number of services being offered to potential customers and as a result of this, make more money or profits.
In this scenario, the airline company has diversified its portfolios through the provision of services centered around the transport or logistics business such as use of credit cards as a means of payment by the customers, use of airport lounges as relaxation spot, waiting area and use of frequent-flyer programs as a form of advert in the airport or on board.