Answer:
This indicates that the manager perceives demand to be:_______.
c. unit elastic.
Explanation:
Unit elastic demand describes a demand curve which is perfectly responsive to changes in price. This implies that the quantity supplied or demanded changes according to the same percentage as the change in price. For example, if the manager raises the price of her famous goods by $2.00, the unit elastic demand for that $2.00 increase would result in a decrease in the quantity demanded by one unit.
In an era of particularly low interest rates, which of the following bonds is most likely to be called? A. zero-coupon bonds B. coupon bonds selling at a discount C. Coupon bonds selling at a premium D. floating-rate bonds
Answer: coupon bonds selling at a premium
Explanation:
A premium bond is simply a bond that is being traded at a higher level than it's par value. A bond will typically trade at a premium when such bond gives an
interest rate which is above the current interest rates that is being offered for new bonds.
Therefore, in an era of particularly low interest rates, coupon bonds selling at a premium is most likely to be called.
Do you believe such tools in the enterprise offer work productivity and efficiency?
Answer:
Yes, I do believe
Explanation:
A tool helps an performer to improve his or her work productivity and efficiency by recording his or her performance history, analyzing and resulting in which skill or feature should become better. However, any improvement in productivity and efficiency requires the performer's both determination and actions towards the designed outcomes.
On September 1, 2021, Blue Co., issued $1,600,000 of its 10% bonds at 98 plus accrued interest. The bonds are dated June 1, 2021 and have an effective interest rate of 11%. Interest is payable semiannually on June 1 and December 1. At the time of issuance, Blue would receive cash of:
Answer:
$1,608,000
Explanation:
the clean price = $1,600,000 x 0.98 = $1,568,000 (it does not include accrued interests)
accrued interests = $1,600,000 x 10% x 3/12 months = $40,000
dirty price = clean price + accrued interests = $1,568,000 + $40,000 = $1,608,000
the journal entry should be:
September 1, 2021
Dr Cash 1,608,000
Dr Discount on bonds payable 32,000
Cr Bonds payable 1,600,000
Cr Interest payable 40,000
What role has venture capitalism played in the market place?
Answer:
The summary of the matter in question is mentioned throughout the subsection below.
Explanation:
Venture Capital seems to be an age-old term although in previous centuries this same industry has changed.A venture capitalist plays a very important role throughout organizing early-stage investment, attracting top management abilities candidates, promising technological start-ups, and innovative product manufacturer's professional assistance as well as other support facilities.
In the context of human resource management challenges, which of the following statements is true of women workers?A) Many professional women step out of the workforce early to start their own companies.B) Their work schedules are more flexible than their male counterparts'.C) They are not usually willing to pay dues.D) Women employees cannot be retained with flextime benefits.
Answer: A) Many professional women step out of the workforce early to start their own companies.
Explanation:
There are several human resource management challenges such as compliance with organization rules and laws, adaptation to innovation, recruitment challenges etc.
In the context of human resource management challenges, the most likely true option is that many professional women step out of the workforce early to start their own companies. Unlike their male counterparts who can stay for a very long time, the reverse is usually the case with women.
Although IRP tends to hold, it may not hold precisely all the time:__________
A) due to transactions costs, like the bid ask spread.
B) due to asymmetric information.
C) due to capital controls imposed by governments.
D) both a and c
Answer:
The correct option is D) both a and c.
Explanation:
Interest Rate Parity (IRP) can be described as the arbitrage condition that must hold when equilibrium occurs in the in the international financial market.
Arbitrage refers to the purchase and sale of financial assets such as securities, currency, or commodities, simultaneously in different markets or in forms of derivative forms with the aim of making profit from the differences in the prices of the same asset.
In any market, IRP will always hold because that indicates equilibrium in the market.
However, IRP may fail to hold all the time due to transactions costs, like the bid ask spread, and also due to capital controls imposed by governments.
Whenever IRP does not hold, the exchange rates and interest rates would be brought back into line by the pressure from arbitrageurs.
Based on the explanation above, the correct option is D) both a and c.
Turnadot & Sons is a small wholesaler of decorative cast iron objects. The following events, related to a special customer order, occur as described below:
August 5, 2015: Turnadot receives the special order for 200 outdoor planters at a selling price of $50 each, including delivery at a future convenient time and location. The customer, with whom Turnadot has had a long-term, trouble-free relationship, pays $3,000 as a deposit and agrees to pay the rest on delivery. Turnadot immediately orders $4,000 worth of planters from its supplier and pays a $1,000 deposit for them.
August 27, 2015: Turnadot pays $3,000 balance due to the supplier upon delivery of the planters to its warehouse.
September 5, 2015: The customer calls for delivery of the planters, and pays the balance of $7,000 when they arrive at the customer site.
On August 5, 2015, which one of the following accounting entries, related to the $1,000 deposit paid to the supplier for the planters, should be recorded in Turnadot's financial accounting system?
A) Debit the current asset 'advances to suppliers' $1,000; credit cash $1,000
B) Debit cost of goods sold $4,000; credit cash $1,000; credit accounts payable $3,000
C) Debit cost of goods sold $1,000; credit revenues $1,000
Answer:
Turnadot & Sons
Accounting entries for a $1,000 deposit paid to the supplier:
A) Debit the current asset 'advances to suppliers' $1,000; credit cash $1,000
Explanation:
Option B and C are wrong, since it is when Turnadot & Sons receives the planters from its supplier that it can create Inventory account to record the purchase. Again, the question is discussing the deposit and not the other transaction that occurs alongside the deposit. With a debit to the current asset 'advances to suppliers' and a credit to the cash account for $1,000, the entry for the deposit is completed.
Which one of the following is not one of the major drivers of unethical managerial behavior?a. Intense competitive pressures. b. Overzealous pursuit of personal gain, wealth, and other self-interests. c. A company culture that puts the profitability and good business performance ahead of ethical behavior. d. Heavy pressures placed on company managers to meet or beat earnings targets. e. The pervasiveness of immoral and amoral businesspeople.
Answer: e. The pervasiveness of immoral and amoral businesspeople.
Explanation:
Managers are sometimes pressured into engaging in unethical behaviors due to intense competitive pressures that can determine whether they keep their jobs especially in a company culture that puts the profitability and good business performance as the paramount yardstick of success.
Heavy pressures placed on company managers to meet or beat earnings targets can also lead to unethical behavior and on a more person level, so can an overzealous pursuit of personal gain, wealth, and other self-interests.
The pervasiveness of immoral and amoral business-people is not a major driver of unethical managerial behavior.
Economics is defined as:______.a. the study of how individuals, businesses, and societies make decisions to maximize their well-being given limited resources.b. the study of the fundamental nature of problems, such as those connected to reality and existence.c. the study of human culture and its evolution over time around different regions across the world.d. study of how individuals and society use unlimited resources to fulfill their needs and wants.
Answer:
d. study of how individuals and society use unlimited resources to fulfill their needs and wants.
Explanation:
Lionel Robbins defines economics as the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses.
Adam Smith defined economics as “an inquiry into the nature and causes of the wealth of nations.”
Yong produces silk and polyester fabrics. Management has compiled the following unit selling price and unit cost information for the fabrics: Yong uses the same weaving machine to make both types of fabric. It takes 0.5 hours to make 1 yard of polyester fabric and 0.75 hours to make 1 yard of silk fabric. The machine can be operated a total of 5,000 hours per year. What is the contribution margin per machine hour for silk?
Answer:
$9.05
Explanation:
the information about prices and costs is missing, so I looked it up:
contribution margin per yard for silk = $18 - $4.10 - $2.70 - $3.51 - $0.90 = $6.79
contribution margin per yard for polyester = $10.20 - $0.80 - $2.90 - $3.77 - $0.60 = $2.13
contribution margin per machine hour:
silk = $6.79 x 1/0.75 = $9.05
polyester = $2.13 x 1/0.5 = $4.16
With reference to the job characteristics model, which of the following defines task identity?a. the degree to which a job requires completion of a whole and identifiable piece of work.b. the degree to which work activities generate direct and clear information about performance.c. the degree to which a job provides the worker freedom in scheduling and procedured. the degree to which a job has an impact on the lives or work of other peopleE) the degree to which a job requires a variety of different activities
Answer:
a. The degree to which a job requires completion of a whole and identifiable piece of work
Explanation:
According to job characteristics model, what motivates an employee to be productive is the task he or she is asked to perform. Ideally, when a task is somewhat challenging, such would motivate the worker to exert his or her energy hence perform well on the task whereas a non challenging task wears down an employee's performance.
The model states that there are five core job characteristics that would show how a job is likely to affect the behaviors and attitude of employees. They are task identity, task variety, feedback, autonomy and task significance.
Therefore, according to the model, task identity is the degree to which a job requires completion of a whole and identifiable piece of work.
If Jason did not want to support Gina’s plan solely because of the unpleasant consequences associated with approving a deal absent shareholder consent, he would be on the ______ level of Kohlberg’s theory.
Answer:
Preconventional
Explanation:
Lawrence Kohlberg was an American psychologist that postulated a theory on the stages of moral development.
According to him the stages of moral development are pre-conventional, conventional, and post-conventional.
In the pre-conventional people follow standard set of rules and are afraid to break the rules because of the consequences.
Conventional stage is where moral standards are internalised and reasoning is influenced by the group one belongs to.
Post-conventional stage is where choices are based on individual principle.
In this scenario Jason did not want to support Gina’s plan solely because of the unpleasant consequences associated with approving a deal absent shareholder consent. This is the pre-conventional stage
Hilltop Bank is an HDC of a note for $1,000 on which there is the forged signature of "Rob." If sued on the note by Hilltop, Rob's best defense would be
Answer:
forgery.
Explanation:
In legal terms, forgery refers to falsifying documents or any other object of value and intend to negotiate it, collect it or benefit in any other way from it. But a forged document is not a valid document, therefore, the forged note that Hilltop Bank holds is no good. Forgery is a crime and it is a type of fraud.
Think of a time when effective or ineffective communication affected your success at home, school, or work.In paragraph 1, describe what happened, in detail.
In paragraph 2, explain how strong communication contributed to or could have improved the situation’s outcome?
Answer:
Explanation:
How ineffective communication can affect your success at home, school, or work
1. At home, ineffective communication can build hatred among family members. One person doesn't have to do something offensive before hatred is thrown at him or her. An inactivity (something person A expects or expected of person B but that person B didn't do) could cause some feud and transfer of aggression from person A to person B.
Person A is/was supposed to out-rightly tell the problem to person B, instead of getting upset that person didn't notice his/her sore mood.
(b) In the case of safety, members of a home should let one another know their movements, even if they don't say the exact destination.
2. At school, there are teachers, students and administrators. A wise student (especially at the higher education level) should communicate with classmates so as to find out information from the lecturer or teacher and ensure he/she is on track. Every student should also communicate with teachers and administrators (either directly or through their parents), in order to know new rules and regulations, as well as news.
3. At work, interpersonal communication skills are necessary for survival. Emotional intelligence or endurance of staff, boss, and consumer characters is key. All feelings shouldn't be made obvious, including feelings of excitement. Moves such as moves to leave the company, should be kept private.
When contemporary leadership researchers analyze conversations between leaders and subordinates in a workplace, they are using which approach in their
Answer:
Trait approach
Explanation:
A manager's trait represents his personality. Thus, by using the Trait approach the researchers would be able to identify patterns of behavior and thoughts of the manager that are stable over time. The trait approach may include information about:
whether the manager is nice when speaking with employees,or is he rude with them?In public stock companies, which of the following expectations of principals is most likely to lead to principal-agent problems?A) The expectation that the agent will follow the country's laws and regulationsB) The expectation that the agent will go above and beyond the call of dutyC) The expectation that the agent will reconnect economic and social needsD) The expectation that the agent will act in the principal's best interest
Answer:
C
Explanation:
The principal-agent problem is the conflict of interest that occurs between the principal and the agent. The principal expects the agent to act in his best interest but this might not be the case as the agent might pursue his own personal interest to the detriment of the principal.
For example, an agent might take on a project that has a negative NPV because he wants to increase the amount of project he handles so he would appear more important. This would be at the detriment of the principal but an advantage to the agent
Which statement is FALSE in regards to the treatment of direct material costs under an activity-based costing system? g
Answer: Direct material costs are not included in the product cost under an ABC system.
Explanation:
In the activity-based costing system, indirect costs are assigned to some products so that a true reflection of the cost of making a product is revealed as some indirect costs do in fact contribute to production.
The inclusion of Direct costs in the calculation of production cost however, are not denied here. Direct costs are included as a product cost as they are the main costs of the product.
It is therefore false that direct material costs are not included in the product cost under an ABC system.
An account is opened for three individuals as "Tenants in Common". If one of the individuals dies, the:
Answer:
the two remaining survivors will own the late tenant's share of the account.
Explanation:
When there is property (assets, real estate, bank or investment accounts, etc.) owned by tenants in common and one of them dies, the rest of the surviving tenants will continue to own the property. In this case, if one of the 2 surviving co tenants dies, then the remaining surviving tenant would own the whole account.
A company has bonds outstanding with a par value of $100,000. The unamortized premium on these bonds is $2,700. If the company retired these bonds at a call price of 99, the gain or loss on this retirement is:________.
a. $1,000 gain.
b. $1,000 loss.
c. $2,700 loss.
d. $2,700 gain.
e. $3,700 gain.
Answer:e. $3,700 gain.
Explanation:
Par value of Bonds =$100,000
Unamortized premium= $2,700
Carrying/ Book value of bonds= Par value of Bonds +Unamortized premium
= $100,000 + $2,700 =$102,700
Amount at which bonds retired $100,000 x 99% = $99,000
Gain on retirement of bonds =Book value of bonds- Amount at which bonds retired
=$102,700- $99,000 = $3,700
Which of the following is not a characteristic of a change agent that would cause resistance to change?
a. lack of tact
b. failure to legitimize change
c. respecting existing cultural traditions
d. autocratic leadership style
Answer:
respecting existing cultural traditions
Explanation:
Resistance to change is being unwilling to change to new circumstances. It can be very disruptive especially in a work environment. Employees can show resistance to change in such situations where the leadership is autocratic, lack of tact, and failure to legitimize change.
A situation whereby cultural traditions in existence are being respected, it would be a more favorable work condition. Therefore option c is the answer.
Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions.
1. January 1 Issue 10,000 shares of common stock in exchange for $42,000 in cash.
2. January 5 Purchase land for $24,000. A note payable is signed for the full amount.
3. January 9 Purchase storage container equipment for $9,000 cash.
4. January 12 Hire three employees for $3,000 per month.
5. January 18 Receive cash of $13,000 in rental fees for the current month.
6. January 23 Purchase office supplies for $3,000 on account.
7. January 31 Pay employees $9,000 for the first month’s salaries.
Required:
1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense.
2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a beginning balance of zero.
3. After calculating the ending balance of each account, prepare a trial balance.
Answer:
Required 1 : Recording
January 1
Cash $42,000 (debit)
Common Stock $42,000 (credit)
January 5
Land $24,000 (debit)
Note Payable $24,000 (credit)
January 9
Equipment $9,000 (debit)
Cash $9,000 (credit)
January 12
Salaries Expense $9,000 (debit)
Accounts Payable $9,000 (credit)
January 18
Cash $13,000 (debit)
Service Revenue $13,000 (credit)
January 23
Supplies $3,000 (debit)
Accounts Payable $3,000 (credit)
January 31
Accounts Payable $9,000 (debit)
Cash $9,000 (credit)
Required 2 : T - Accounts
Cash Account
Debit :
Common Stock $42,000
Service Revenue $13,000
Totals $55,000
Credit :
Equipment $9,000
Salaries Payable $9,000
Balance c/ d $37,000
Totals $55,000
Common Stock Account
Debit :
Balance c/d $42,000
Totals $42,000
Credit :
Cash $42,000
Totals $42,000
Land Account
Debit :
Note Payable $24,000
Totals $24,000
Credit :
Balance c/d $24,000
Totals $24,000
Note Payable Account
Debit :
Balance c/d $24,000
Totals $24,000
Credit :
Land $24,000
Totals $24,000
Equipment Account
Debit :
Cash $9,000
Totals $9,000
Credit :
Balance c/d $9,000
Totals $9,000
Accounts Payable Account
Debit :
Cash $9,000
Balance c/d $3,000
Totals $12,000
Credit :
Salaries Expense $9,000
Supplies $3,000
Totals $12,000
Salaries Expense Account
Debit :
Accounts Payable $9,000
Totals $9,000
Credit :
Balance c/d $9,000
Totals $9,000
Supplies Account
Debit :
Accounts Payable $3,000
Totals $3,000
Credit :
Balance c/d $3,000
Totals $3,000
Service Revenue Account
Debit :
Balance c/d $13,000
Totals $13,000
Credit :
Cash $13,000
Totals $13,000
Required 3 : Trial Balance
Debit Credit
Cash Account $37,000
Common Stock $42,000
Land $24,000
Note Payable $24,000
Equipment $9,000
Accounts Payable $3,000
Salaries Expense $9,000
Supplies $3,000
Service Revenue $13,000
Totals $82,000 $82,000
Explanation:
Transactions are first recorded in the Journals, then posted to T - Accounts. The T - Account Balances are used to construct the Trial Balance.
Beaver Company used a predetermined overhead rate last year of $2 per direct labor-hour, based on an estimate of 25,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were:
The question is incomplete. Here is the complete question
Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were:
Actual manufacturing overhead cost incurred = $47,000
Actual direct labour hours worked = 24,000
What was the under- or overapplied overhead last year?
Answer:
1,000 overapplied
Explanation:
Beaver company made use of a predetermined overhead rate last year
$2 per direct labour hour on an estimate of 25,000 direct labour hours
The actual costs during the year is $47,000
The actual direct labour hours was 24,000
Therefore, the over or underapplied for last year can be calculated as follows
= (24,000×2)-47,000
= 48,000-47,000
= 1,000 overapplied
Hence, the overhead last year was 1,000 overapplied
When the price of oil declines significantly, the price of gasoline also declines. The latter occurs because of a(n):___________
A. increase in the demand for gasoline.
B. decrease in the demand for gasoline.
C. increase in the supply of gasoline.
D. decrease in the supply of gasoline.
Answer:
C. increase in the supply of gasoline.
Explanation:
The prices of petroleum products are very sensitive to demand and supply. Petroleum products usually have their prices go up when supply is short, or when demand is high. When there is a decrease in the demand for petroleum products, or an increase in the supply, the value drops, and the price declines.
Answer:
c
Explanation:
Which of the following statement about working capital management are TRUE?
A) Lengthening payment terms with suppliers reduces financing needs
B) Shorter payment terms for customers increase net working capital
C) Decrease in inventories increases working capital
D) Identical decrease in customer and supplier payment terms does not alter net working capital Back Next
Answer:
C and D
Explanation:
The answers from the options are:
1. Decrease in inventories increases working capital
2. Identical decrease in customer and supplier payment terms does not alter net working capital.
Working capital management is a type of strategy used in business to make sure that a company runs efficiently by using it's current assets and liabilities effectively as well as monitoring them
Suppose labor demand and supply are represented by the equations Demand: LD = 100 − 2W, Supply: LS = 2W. a. Find the equilibrium wage and employment level. b. Explain why $30 cannot be the market clearing wage. c. Suppose 5 workers are hired at a wage of $30. Show an example where an exchange can occur that is beneficial to multiple people. How much economic rent is generated by this transaction? d. If workers earn economic rent, does that mean they are being overpaid? e. Suppose all hiring in this market must be done through a union and the union has limited the supply of labor to 40 units. What wage will emerge in this market? How much economic rent have the employed members of the union gained? How much economic rent has been lost due to the limitation on union labor?
Answer:
Labor Demand and Supply
a) Equilibrium Wages = $25 and Equilibrium employment level = 2
b) $30 cannot be the market clearing wage. At $30 labor supply will outstrip labor demand. In that situation, there is no equilibrium of labor supply and demand.
c) If 5 workers are hired at a wage of $30, the wage bill will be equal to $150 ($30 * 5) and the 5 workers will be receiving an economic rent of $5 each ($30 - 25). The total economic rent is $25 ($5 * 5).
d) If workers earn economic rent, it does not mean that they are being overpaid. It simply means that they are being paid above the equilibrium wage.
e) The total wage will be $1,200($30 * 40). The total economic rent gained by the employed union members is $200 ($5 * 40). The economic rent lost by limitation on union labor cannot be quantified with the given information.
Explanation:
a) Data and Calculations:
Demand: LD = 100 − 2W
Supply: LS = 2W
Equilibrium wage and employment level exist where Demand = Supply
i.e. LD = LS = 100 - 2W = 2W
Therefore 2W = 100 - 2W
= 4W = 100
= W = 100/4
= W = 25
Equilibrium Wages = $25
Equilibrium employment level = 2
b) Economic rent is the additional or extra income which a resource earns or generates over the normal earnings as a result of being put to use in its present form. This means that the extra income could be lost without jeopardizing the deployment of the resource to some productive use.
Torrid Romance Publishers has total receivables of $2,800, which represents 20 days’ sales. Total assets are $73,000. The firm’s operating profit margin is 5.9%. Find the firm's ROA and asset turnover ratio. (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.)
Answer:
ROA=4.13
Asset turnover ratio = 0.70 times
Explanation:
1.Computation for ROA
Using this formula
ROA=Net income/Total assets
First step is to find Day's sales in receivables before calculating for the sales amount
Day's sales in receivables = Numbers of days in a year/Total receivables days sales
Let plug in the formula
Day's sales in receivables = 365 / 20
Day's sales in receivables = 18.25times
Now let find the Sales amount using this formula
Sales= Day's sales in receivables× Total receivables
Let plug in the formula
Sales = 18.25 times × $2,800
Sales=$51,100
Second step is to find the Net income
Using this formula
Net income =Percentage of Operating margin× Sales amount
Let plug in the formula
Net income=5.9%×$51,100
Net income =$3,014.90
Now let find the ROA using this formula
ROA=Net income/Total assets
Let plug in the formula
ROA=$3,014.90/$73,000
ROA=0.0413×100
ROA=4.13%
Therefore ROA will be 4.13%
2. Computation for asset turnover ratio
First step is to calculate for the Receivables turnover
Using this formula
Day's sales in receivables = Numbers of days in a year/Total receivables days sales
Let plug in the formula
Day's sales in receivables = 365 / 20
Day's sales in receivables = 18.25times
Second step is to find the Sales amount using this formula
Sales= Day's sales in receivables× Total receivables
Sales = 18.25 times × $2,800
Sales=$51,100
Now let calculate for the Asset turnover ratio using this formula
Asset turnover ratio = Sales / Total assets
Let plug in the formula
Asset turnover ratio= $51,100 / $73,000
Asset turnover ratio= 0.70 times
Therefore asset turnover ratio will be 0.70 times
Evo's owner states that ecommerce is too transaction-oriented and fails to establish emotional connections between consumers and brands. This critique suggests that the Web is ineffective at delivering:
Answer: Services to consumers.
Explanation:
The physical store is more beneficial to meet the needs of the customers to obtain the sports gear. The store is more effective in maintaining the relationship quality between consumers and Evo. Utilitarian values are maintained by shopping at the physical store instead of shopping online. Thus, e-commerce or web-based business proved to be ineffective at delivering services to consumers.
Under the FINRA Conduct Rules, a broker-dealer may charge a customer all of the following services except:_______.a. collection of dividends on margin securities.
b. safekeeping of securities.
c. appraisals of securities in a customer portfolio.
d. distributing proxies to holders of securities in margin account.
Answer:
distributing proxies to holders of securities in margin account
Explanation:
Proxies are voting materials on shares that are given by the issuer of the shares to the brokerage that is holding the shares.
Proxies are paid for by the issuer and not the customer.
A broker is allowed to charge for various services rendered. For trading and market related services the 5% rule holds, while for other clerical services such as collection of dividends, safe keeping appraisal of securities, and transfer of securites.
Charges must be fair and reasonable.
A trend line has been fitted to a company's annual sales. The trend is given by yt = 50 + 5t, where t is the time index (t = 1, 2, . . . , n) and yt is annual sales (in millions of dollars). The implication of this trend line is that sales are expected to increase:________.
A. by exactly 5 percent every year.
B. by an average of $5 million per year.
C. by $5 million every year.
D. by an average of 5 percent per year.
Answer:
B. by an average of $5 million per year
Explanation:
Slope co-efficient for t = 5, indicates that for every year, there will on average increase of dollar 5 million in sales. The interpretation of trend line is "Sales will increase by $5 million every year"
Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 29,328 83,351 103,760 9,078 257,087 $ 482,604 $ 32,285 $ 34, 323 57,663 45,764 76,967 50, 226 8,737 3,775 240,386 216,112 $ 416,038 $ 350, 200 $ 120,168 $ 70,310 $ 44,840 88,915 162,500 111,021 $ 482,604 96,646 75,072 162,500 162,500 86,582 67, 788 $ 416,038 $ 350, 200 (1-a) Compute the current ratio for each of the three years. (1-b) Did the current ratio improve or worsen over the three year period? (2-a) Compute the acid-test ratio for each of the three years. (2-b) Did the acid-test ratio improve or worsen over the three year period?
Answer:
1a. Current ratio = Current assets / Current Liabilities
Current year = $224,517 / $120168 = 1.88 : 1
1 years ago = $175,652 / $70,310 = 2.50 : 1
2 years ago =$134,088 / $44,840 = 2.99 : 1
1b. The Current ratio worse over three years period
2a. Acid test ratio = (Cash + Investment + Account Receivables) / Current liabilities
Current year = ($29,328 + $0 + $83,351) / $120,168 = 0.94 : 1
1 year ago = ($32,285 + $0 + $57,663) / $70,310 = 1.28 : 1
2 year ago = ($34,323 + $0 + $45,764) / $44,840 = 1.79 : 1
2b. The Acid test ratio are worse over three years period