Answer:
e. establish standards
Explanation:
-Take corrective action, if necessary is when managers decide strategies to implement when the results are not meeting the standards that were established.
-Compare performance to standards is the step that determines if there is a difference between the company's performance and the standards.
-Recognize success is not a step in the control process.
-Measure performance refers to gather and analyze data to determine if the company is meeting the goals set.
-Establish standards refers to establishing goals that are specific, attainable and clear to be able to evaluate the company's performance.
According to this, the answer is that Uber's guidance that if a driver's "rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation" represents establish standards because Uber established a rating that driver's need to achieve which represents the standard that would be use to evaluate them.
A firm's total cost function is given by the equation TC=4000+5Q+10Q and marginal cost is given by the equation MC=5+20Q
(A) Write an expression for each of the following cost concepts:
a. Total Fixed Cost
b. Average Fixed Cost
c. Total Variable Cost
d. Average Variable Cost
e. Average Total Cost
(B) Calculate the values of marginal cost and the costs in (a)-(e) above for Q=0,1,2,3.
(C) Determine the quantity that minimizes average total cost. Demonstrate that the predicted relationship between marginal cost and average cost holds.
Following are the calculation to the given question:
[tex]\to TC = 4,000 + 5Q + 10 \ Q2\\\\\to MC = 5 + 20\ Q\\\\[/tex]
For point A)
[tex](a)\ TFC = 4,000\\\\(b)\ AFC = \frac{TFC}{ Q} = \frac{4,000}{ Q}\\\\(c)\ TVC = 5Q + 10\ Q2\\\\(d)\ AVC = \frac{TVC }{Q} = 50 + 10\ Q\\\\(e)\ ATC = \frac{TC }{ Q} = (\frac{4,000}{ Q}) + 50 + 10Q \ \text{Also, ATC = AVC + AFC}\\\\[/tex]
For point B)
TFC remains unchanged at 4,000, regardless of the price of Q.
i)
[tex]\to Q = 0[/tex]
AFC, AVC, and ATC cannot be calculated (division by zero is not possible).
ii)
[tex]Q = 1\\\\AFC =\frac{4,000}{ 1} = 4,000\\\\TVC = (5 \times 1) + (10 \times 1) =5 + 10 = 15\\\\AVC = \frac{TVC}{ Q} = \frac{15}{1} = 15\\\\ATC = 4,000 + 15 = 4,015\\\\MC = 5 + (20 \times 10 = 5 + 20 = 25[/tex]
iii)
[tex]Q = 2\\\\AFC = \frac{4,000}{ 2} = 2,000\\\\TVC = (5 \times 2) + (10 \times 2 \times 2) = 10 + 40 = 50\\\\AVC = \frac{50}{2} = 25\\\\ATC = 2,000 + 25 = 2,025\\\\MC = 5 + (20 \times 2) = 5 + 40 = 45\\\\[/tex]
iv)
[tex]Q = 3\\\\AFC = \frac{4,000}{ 3} = 1,333.33\\\\TVC = (5 \times 3) + (10 \times 3 \times 3) = 15 + 90 = 105\\\\AVC = \frac{105}{3} = 35\\\\ATC = 1,333.33 + 35 = 1,368.33\\\\MC = 5 + (20 \times 3) = 5 + 60 = 65\\\\[/tex]
For point C)
i)
[tex]ATC[/tex] is minimized when [tex]\frac{dATC}{dQ} = 0[/tex]
[tex](- \frac{4,000}{Q2} ) + 10 = 0\\\\\frac{4,000}{Q2} = 10\\\\Q2 = 400\\\\Q = 20\\[/tex]
ii)
Part (B) shows that as MC increases from Q = 0 to Q = 3, ATC decreases, validating the link.
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llinois Furniture, Inc., produces all types of office furniture. The "Executive Secretary" is a chair that has been designed using ergonomics to provide comfort during long work hours. The chair sells for $130. There are 480 minutes available during the day, and the average daily demand has been 48 chairs. There are eight tasks:
Answer:
The tasks A and B will be performed together, then C, D and E will be performed one by one and then F and G will be performed to enable the final task H which will be performed last.
Total task time is 49 mins
= 4 + 7 + 6 + 5 + 6 + 7 + 8 + 6
=49 mins.
Cycle time is 10 min per chair
Production time available per day divided by units required per day
480 minutes / 50 chairs
= 10 mins per chair.
Minimum number of workstation
49 mins / 10 mins = 5 workstations
Explanation:
The tasks A and B will be performed together, then C, D and E will be performed one by one and then F and G will be performed to enable the final task H which will be performed last.
Total task time is 49 mins
= 4 + 7 + 6 + 5 + 6 + 7 + 8 + 6
=49 mins.
Cycle time is 10 min per chair
Production time available per day divided by units required per day
480 minutes / 50 chairs
= 10 mins per chair.
Minimum number of workstation
49 mins / 10 mins = 5 workstations
On December 31 of the current year, Jerome Company has an accounts receivable balance of before any year end adjustments. The Allowance for Doubtful Accounts has a credit balance. The company prepares the following aging schedule for accounts receivable: Total Balance 130 days 3160 days 6190 days over 90 days Percent uncollectible 1% 2% % % What is the Allowance for Uncollectible Accounts at December 31 of the current year after adjustments
Answer:
I looked for the missing information and found the following:
Total Balance 1-30 days 31-60 days 61-90 days over 90 days
$329,000 $160,000 $90,000 $51,000 $28,000
% uncollectible 1% 2% 3% 20%
Allowance for Doubtful Accounts has a $1,100 credit balance before any adjustment.
total bad debt expense = $1,600 + $1,800 + $1,530 + $5,600 = $10,530
adjusting entry = $10,530 - $1,100 = $9,430
adjusting entry:
December 31, 202x, bad debt expense
Dr Bad debt expense 9,430
Cr Allowance for doubtful accounts 9,430
Piper's Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and depreciation through the date of sale totaled $51,000. What was the gain or loss on the sale of the equipment?
Sale amount
Less:
Cost of the baking equipment
Book value
Answer:
$4,000 gain
Explanation:
The calculation of gain or loss on the sale of the equipment is shown below:-
Gain or loss on the sale of the equipment = Sales - Cost of the baking equipment - Accumulated Depreciation
= $25,000 - ($72,000 - $51,000)
= $25,000 - $21,000
= $4,000
Therefore for computing the gain or sale we simply applied the above formula.
Which group of people would be the most concerned about the operating areas that have contributed to the success of the firm and which have not?
Answer:
Management / Competitors.
Explanation:
The company's management is configured as the group of people who would be most concerned with the effectiveness of the management of the operational areas to achieve the company's success. Effective management must understand the organization as a system that must be integrated so that organizational activities flow effectively to achieve objectives and goals, in order to coordinate, control, monitor and review activities and subordinates so that the organization generates positive results in the market.
A developer is proposing to build and operate an 8 store strip mall. Each unit would rent for $3,500 per month. It is expected that vacancy would run at 15% and that the expenses would be 17.5%. The loan is to be 75% of the capitalized value. The developer has an MARR of 12.5%, the bank is charging 8.5% interest, and the Long Term Debt Service is a constant 9%. To assess the financial worth of this endeavor, determine the following:
a. CAP Rate
b. Capitalized value
c. Loan amount
d. Debt Service Coverage Ratio
e. Loan per unit
Answer:
Requirement A: CAP Rate is 12.5%
Requirement B: Capitalized Value of the Property is $1,884,960
Requirement C: Loan Amount is $1,413,720
Requirement D: Debt Service Coverage Ratio is 1.85
Requirement E: Loan per unit is $176,715 Per Unit
Explanation:
Requirement A: Find the CAP Rate
The CAP Rate will be calculated using the following formula:
CAP Rate = Annual Net Operating Income (NOI) (Step1) / Property Capitalized Value (Step2)
Here
Operating Income is $235,620 (Step1)
Property Capitalized Value (Step2)
Now, by putting values we have:
CAP Rate = $235,620 / $1,884,960 = 12.5%
Step1: Find Annual Net Operating Income (NOI)
As we know that:
Operating Income = Expected Revenue - Operating Expense
Here
Expected Revenue from 8 Strip Malls = Rent / Month * 12 Months * (1 - Vacancy Ratio) * 8 Strips Malls
= $3,500 * 12 * (1 - 15%) * 8
= $285,600
Operating Expenses = Expected Revenue * 17.5%
= $285,600 * 17.5% = $49,980
Now by putting value in the above Operating Income equation, we have:
Annual Operating Income = $285,600 - $49,980 = $235,620
Step2: Find Property Capitalized Value (It is also Requirement B)
Property Capitalized Value = Annual Operating Income / Minimum Accepted Rate of Return (MARR)
Here
Annual Operating Income is $235,620 from Step1
MARR is 12.5%
By putting values, we have:
Capitalized Value of the Property = $235,620 / 12.5% = $1,884,960
Requirement C. Find Loan Amount
It is given in the question that the Loan Amount is 75% of Property Capitalized Cost. This implies:
Loan Amount = $1,884,960 * 75% = $1,413,720
Requirement D. Debt Service Coverage Ratio
Debt Service Coverage Ratio (DSCR) = Annual Net Operating Income / Total Debt Service for the Year
Here
Annual Net Operating Income is $235,620 from Step1
Total Debt Service for the Year $127,235 (See Step3 below)
By putting values, we have:
Debt Service Coverage Ratio = $235,620 / $127,235 = 1.85
Step3: Total Debt Service for the year
Total Debt Service for the year = Loan Amount * Debt Service Rate
Here
Loan Amount is $1,413,720
Debt Service Rate is 9%
By putting values, we have:
Total Debt Service for the year = $1,413,720 * 9% = $127,235
Requirement E. Find Loan Amount
We can find loan per unit by simply dividing the loan amount by number of strip mall. Here total number of strip mall are 8. This implies that:
Loan Per Unit = $1,413,720 / 8 Units = $176,715 Per Unit
in which order would the expectancy theory place the following events? a) outcome valence, performance, effort b) performance, effort, outcome valence c) effort, outcome valence, performance d) performance, outcome valence, effort e) effort, performance, outcome valence
Answer: e. effort, performance, outcome valence
Explanation:
The expectancy theory analyses and explains the reason why people behave the way they do. The expectancy theory explains that individual behave the way they do because they believe their efforts which they put into a particular activity will bring about an outcome.
The first thing that comes first is the effort which one puts into an activity, after then is the performance and lastly the outcome.
precise Machinery is analyzing a proposed project that is expected to sell 1,450 units, +3 percent. The expected variable cost per unit is $139 and the
Answer: C.$221.86
Explanation:
Contribution Margin is the difference between the sales price and the variable costs.
Best case scenario of Sales would mean it is the higher amount.
Best case scenario of costs would mean the lower amount.
Best case Sales
= 349 * ( 1 + 3%)
= $359.47
Best Case Variable Cost
= 139 * ( 1 - 1%)
= $137.61
Best Case Contribution Margin
= Best case Sales - Best Case Variable Cost
= 359.47 - 137.61
= $221.86
Which of the following is not a factor that a manager should bear in mind when estimating a project's revenues and costs?
A) Sales of a product will typically accelerate, stabilize, and then decline as the product becomes outdated or faces increased competition.
B) A new product typically has its highest sales immediately after release as customers are attracted by the novelty of the product.
C) The prices of technology products tend to fall over time as newer, superior technologies emerge and production costs decline.
D) Prices and costs tend to rise with the general level of inflation in the economy.
Answer:
B) A new product typically has its highest sales immediately after release as customers are attracted by the novelty of the product.
Explanation:
When a manager is implementing and executing a project, there are certain factors to be considered for revenue and costs associated with the project.
For instance, that a new product typically has its highest sales immediately after release as customers are attracted by the novelty of the product is not a factor that a manager should bear in mind when estimating a project's revenues and costs. This is simply because it is not guaranteed that all new products introduced to the market would be accepted or attractive to customers due to economical factors such scale of preference and opportunity costs.
Ideally, the factors to be considered by a manager when estimating a project's revenues and costs are;
1. Sales of a product will typically accelerate, stabilize, and then decline as the product becomes outdated or faces increased competition.
2. The prices of technology products tend to fall over time as newer, superior technologies emerge and production costs decline.
3. Prices and costs tend to rise with the general level of inflation in the economy.
If United Airlines acted as a "price leader" and all other airlines simply charged the same prices
that United Airlines charged, then could this action be illegal because it is a form of "silent collusion?"
A. There is no such term in microeconomics known as "tacit" or "silent collusion."
B. Matching the prices of the price leader firm is a good example of a competitive market.
C. The U.S. Anti-Trust Department has always considered this business behavior as suspicious
and it does consider this pricing strategy to be illegal.
D. The famous 1982 anti-monopoly IBM court case said that this pricing strategy within an
industry is legal as long as the firms fill out quarterly reports to keep the U.S. Anti-Trust
Answer:
D
Explanation:
The airline industry is an example of an oligopoly
An Oligopoly is when there are few large firms operating in an industry. While, a monopoly is when there is only one firm operating in an industry.
Oligopolies are characterised by :
price setting firms
product differentiation
profit maximisation
high barriers to entry or exit of firms
downward sloping demand curve
the action taken by the other airlines is known as tacit collusion.
Tacit collusion is when other companies adopt the price of the price leader
Tacit collusion is not illegal while the explicit collision is illegal.
Investment companies or mutual funds that continue to sell and repurchase shares after their initial public offerings are referred to as
Answer:
Open end
Explanation:
Open end otherwise known as mutual fund are those investments offered through fund companies which sells shares directly to investors. In an open end fund investment, there is no limit to the number of shares that can be offered therein. The shares traded are unlimited which means that shares can be issued in as much can be backed up with funds.
The prices for open end funds are fixed once daily which shows the performance of the investment for that day hence the only price at which investment shares can be bought for that day.
Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?
A. Debit Assets $203,000; credit Common Stock $203,000.
B. Debit Cash and Land, $203,000; credit Common Stock $203,000.
C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
D. Debit Common Stock $203,000; credit cash $71,000; credit Land $132,000.
E. Debit Common Stock $203,000; credit Assets $203,000.
Answer: C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Explanation:
From the question, we are informed that Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting.
The journal entries will RR Consulting make to record this transaction will be:
Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Answer:
C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Explanation:
Recognize the Assets of Cash at $71,000, the Assets of Land at $132,000 and an Equity element - Common Stock at $203,000.
The journal entry will be as follows :
Cash $71,000 (debit)
Land $132,000 (debit)
Common Stock $203,000 (credit)
The following data relate to factory overhead cost for the production of 10,000 computers: Actual: Variable factory overhead $262,000 Fixed factory overhead 90,000 Standard: 14,000 hrs. at $25 350,000 If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of 14,000 standard hours was $356,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.00 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Answer:
Calculation of variable overhead controllable variance
Standard hours allowed for 10,000 computers = 14,000 hours
Budgeted variable expense = Standard hours allowed * variable overhead rate
= 14,000 * ($25 - $6)
= $266,000
Variable overhead controllable variance = Actual variable overhead expense - Budgeted variable overhead expense
= $262,000 - $266,000
=$4,000 (Unfavorable)
Calculation of fixed overhead volume variance:
Applied overhead = Number of computers produced * Fixed overhead rate
= 10,000 * $6.00
= $60,000
Budgeted fixed overhead = $90,000
Fixed overhead volume variance = Budgeted fixed overhead - Applied fixed overhead
= $90,000 - $60,000
= $30,000 (Favorable)
Calculation of Total factory overhead volume variance:
Total factory overhead cost variance = Variable overhead controllable variance + Fixed overhead volume variance
= - $4,000 + $30,000
= $26,000 (Favorable)
Braxton's Cleaning Company stock is selling for $33.25 per share based on a required return of 11.7 percent. What is the the next annual dividend if the growth rate in dividends is expected to be 4.5 percent indefinitely?
Answer:
So, the next annual dividend will be $2.394
Explanation:
The constant growth model of DDM is used to calculate the price of a stock today whose dividend growth rate is expected to be constant forever. The price of such a stock is calculated using the formula for price under the constant growth model of DDM,
P0 = D1 / (r - g)
Where,
P0 is price todayD1 is the next annual dividend that will be paid by the stockr is the required rate of return g is the growth rate in dividendsTo calculate the next annual dividend, we will input the available values for P0, r and g in the formula,
33.25 = D1 / (0.117 - 0.045)
33.25 * (0.072) = D1
2.394 = D1
So, the next annual dividend will be $2.394
Macklin Company forecasts that total overhead for the current year will be $13,500,000 with 500,000 total machine hours. Year to date, the actual overhead is $14,000,000 and the actual machine hours are 530,000 hours. If Macklin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is
Answer:
Instructions are below.
Explanation:
Giving the following information:
Macklin Company forecasts that total overhead for the current year will be $13,500,000 with 500,000 total machine hours.
Year to date, the actual overhead is $14,000,000 and the actual machine hours are 530,000 hours.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 13,500,000/500,000
Predetermined manufacturing overhead rate= $27 per machine-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 27*530,000= 14,310,000
Finally, the under/over allocated overhead:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 14,000,000 - 14,310,000
Under/over applied overhead= 310,000 overallocated
A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $38,000 for A and $31,000 for B; variable costs per unit would be $7 for A and $11 for B; and revenue per unit would be $19.
a. Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.)
QBEP,A units
QBEP,B units
b. At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)
c. If expected annual demand is 10,000 units, which alternative would yield the higher profit?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine A:
Fixed costs= $38,000
Unitary cost= $7
Machine B:
Fixed costs= $31,000
Unitary cost= $11
Revenue per unit= $19
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Machine A:
Break-even point in units= 38,000 / (19 - 7)
Break-even point in units= 3,167
Machine B:
Break-even point in units= 31,000 / (19 - 11)
Break-even point in units= 3,875
Now, we need to determine the indifference point:
Machine A= 38,000 + 7x
Machine B= 31,000 + 11x
x= number of units
We will equal both formulas and isolate x:
38,000 + 7x = 31,000 + 11x
7,000 = 4x
1,750=x
Indifference point= 1,750 units
Finally, the total cost for 10,000 units:
Machine A= 38,000 + 7*10,000= $108,000
Machine B= 31,000 + 11*10,000= $141,000
How much will be in the Prepaid Insurance account at the end of the year, after the adjusting entries have been prepared and posted
Answer: $8,400
Explanation:
The $9,600 is for 2 years in advance. This can be apportioned per month at a rate of;
= 9,600/24
= $400 per month.
October to the end of the year is 3 months so;
= 400 * 3
= $1,200 will be recorded for the year.
Prepaid Insurance will therefore reduce to;
= 9,600 - 1,200
= $8,400
Which of these means of assessing candidates generally has the lowest correlation with subsequent performance?
A. Cognitive ability tests.
B. Job knowledge tests.
C. Unstructured interviews.
Answer:
Unstructured interviews
Explanation:
Explain how you would value a stock. Provide an example of a valuation of a stock based on retrieved real data. Include evidence of the retrieved data in your answer. Compare your valuation with the actual price of the stock at the designated time for your valuation.
Answer with Explanation:
There are numerous stock valuing models but here, I will use Dividend Valuation Model which is based on finding the intrinsic value of Stock which is the present value of the stock at a required rate of return. The formula to calculate Intrinsic value of stock is given as under:
P0= D0 * (1 + g) / (ke - g)
Here
P0 is the intrinsic value of the stock
D0 is the dividend just paid
g is the growth rate
ke is the investor's required rate of return
The model doesn't holds if the company doesn't pays Dividend.
Now suppose that the Dividend just paid by Apple is $20 per stock. The anticipated growth rate of dividend is 10% and the required rate of return is at 15%.
By putting values in the above equation, we have:
P0= $20 * (1 + 10%) / (15% - 10%)
= $20 / (15% - 10%)
= $400 per share
The value of stock of Apple is $400 per share which must be its fair market value as per the Dividend Valuation Model.
As per the model, if the value of stock is higher as per dividend valuation model then we must purchase the stock as it will generate higher value and vice versa. The inherent limitation of the model is that it assumes that the dividend is growing at constant rate and is consistently paid. The main disadvantage of Dividend valuation model is that it doesn't account for political factors, economical factors, evolving business risks, technological factors, etc.
Good strategy execution involves Multiple Choice making choices among broad or narrow low cost and differentiation strategies to compete against rivals. selecting a capable management team. team participation to perform strategy-critical activities in light of prevailing circumstances. only senior-level managers to be accomplished on a timely basis. continuous improvements in the value chain in order to maximize operating efficiency.
Answer:
The answer is: team participation to perform strategy-critical activities in light of prevailing circumstances.
Explanation:
The good execution of the strategy is mainly related to the ability of managers to involve all operational areas and all employees in the process of participating in the strategic actions that were developed to achieve the goals and objectives of the organization.
Therefore, managers have an essential role in exercising control, coordination and monitoring of the teams, so that the execution of the strategy takes place in an effective and active manner, being shared as a responsibility and efforts of the entire team.
Purple Panda Products Inc. is considering a project that will require $650,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 30%. Assuming that the project generates an expected EBIT (earnings before interest and taxes) of $170,000, then Purple Panda’s anticipated ROE (return on equity) for the project will be:
a. 14.65%
b. 18.31%
c. 11.90%
d. 10.99%
Answer:
18.31%
Explanation:
Purple panda products incorporation has a shareholder's equity of $650,000
The tax rate is 30%
=30/100
= 0.3
The EBIT is $170,000
The first step is to calculate the net income
Net income= EBIT - tax
= $170,000-(0.3×170,000)
= $170,000-51,000
= 119,000
Therefore, the ROE can be calculated as follows
ROE= Net income/shareholder's equity
= 119,000/650,000
= 0.1831×100
= 18.31%
Hence the ROE is 18.31%
You have just joined the project management office after five years of working on projects. One of the things you want to introduce to your company is the need to create and utilize WBSs. Some of the project managers are angry that you are asking them to do "extra work". Which of the following would be the BEST thing you could tell the project managers to convince them to use WBSs?a. Tell them that it is not needed b. Tell them it is required only if the project involves contracts. c. Tell them it is the only way to identify risks. d. Tell them it will prevent work from slipping through the cracks
Answer: d. Tell them it will prevent work from slipping through the cracks
Explanation:
Work Breakdown Structures work to make a large and by extension all projects more manageable by dividing it into different portions that will then be managed individually to ensure that they are accomplished.
With different portions, various team members can be assigned to them which will lead to greater work efficiency as work is done simultaneously on a project.
Due to this division of the project and the micro-management that comes with it, tasks can be better monitored meaning that there will be less chances of work slipping through the cracks because all tasks will be assigned to different portions of the project and can therefore be traced easily and their completion will form part of the completion of a portion.
Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises Group of answer choices
Complete Question:
Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises:
Group of answer choices.
a. if the buyer is relying on the seller to select suitable goods.
b. if the buyer asks for it.
c. if the seller is a merchant who deals in goods of the kind sold.
d. in conjunction with lease contracts, not sales contracts.
Answer:
a. if the buyer is relying on the seller to select suitable goods.
Explanation:
In this scenario, Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods (bricks and stones). Under the Uniform Commercial Code (UCC), an implied warranty of fitness of a particular purpose arises if the buyer is relying on the seller to select suitable goods. This simply means that, Construction Products who is the seller of the bricks and stones implied a warranty of fitness because they know the purpose for which Dante will use the acquired goods and should meet his requirements or needs.
Hence, Construction Products Company is bounded by the contractual agreement (warranty) to provide quality goods which would meet Dante's reasons for buying them since he relying on their expertise or judgmental skills.
"expects to generate free cash flows of $200,000 per year for the next five years. Beyond that time, free cash flows are expected to grow at a constant rate of 5 percent per year forever. If the firm’s average cost of capital is 15 percent, the market values of the firm’s debt and preferred stock are $400,000 and $100,000, respectively. There are 125,000 shares of stock outstanding. What is the value of the firm’s stock"
Answer:
The value of the firm's stock is $703,920
The price is $5.63 per share ($703,920/125,000 shares)
Explanation:
a) Data and Calculations:
Free cash flows = $200,000
Present value of the free cash flows = $200,000 x Annuity Factor, for 5 years at cost of capital of 15% x (1 + growth rate)
= $200,000 x 3.352 x 1.05
= $703,920
Therefore, common equity = $703,920
To calculate Company XYZ's free cash flows in their present value, they are discounted, using the present value table. The resulting amount is equivalent to the value of the common stock. The company's free cash flow is the amount that is left after settling operating expenses and capital expenditure.
Suppose the real interest rate is 2.8%, and the inflation rate is 7%. (1) How much do you need to invest now in order to get $100 in a year? Please show two approaches to calculate the answers. (Round your final answer to two decimal places) (2) Suppose the U.S. Treasury issues 5% coupon, 3-year TIPS (Treasury Inflation-Protected Securities). What are the real cash flows on the 3-year TIPS each year? What are the nominal cash flows on the 3-years TIPS each year? (Round your final answers to two decimal places)
Answer:
1)
approach 1, using the approximate real and nominal interest rates:
nominal interest rate = real interest rate + inflation rate = 2.8% + 7% = 9.8%
present value = $100 / (1 + 9.8%) = $91.07
approach 2, using the exact real and nominal interest rates:
(1 + i) = (1 + r) × (1 + π)
(1 + i) = (1 + 2.8%) x (1 + 7%) = 1.09996
i = 1.09996 - 1 = 0.09996 = 9.996%
present value = $100 / (1 + 9.996%) = $90.91
2)
assuming a $1,000 TIPS, nominal cash flow year 1 = $50
new face value = $1,070
nominal cash flow year 2 = $53.50
new face value = $1,144.90
nominal cash flows year 3 = $57.25 + ($1,144.90 x 1.07) = $1,282.29
assuming a $1,000 TIPS, real cash flow year 1 = $50 / 1.07 = $46.73
new face value = $1,070
real cash flow year 2 = $53.50 / 1.07² = $46.73
new face value = $1,144.90
real cash flows year 3 = [$57.25 + ($1,144.90 x 1.07)] / 1.07³ = $1,282.29 / 1.07³ = $1,046.73
MicroTech Corporation maintains a capital structure of 40 percent debt and 60 percent common equity. To finance its capital budget for next year, the firm will sell 11% coupon bonds at par value (assume no flotation costs). The firm will finance the rest of its capital expenditures with retained earnings. MicroTech expects next year's dividend to be $1.30 per share. Dividends are expected to grow at 7% per year for the foreseeable future. The current market value of MicroTech's common stock is $30 per share. If the firm has a corporate tax rate of 21%, what is its weighted cost of capital for next year?
Answer:
weighted cost of capital for next year is 10.27 %.
Explanation:
Weighted cost of capital = Ke × (E/V) + Kd × (D/V)
Ke = Cost of Equity
= Dividend Yield + Expected growth rate
= $1.30 / $30.00 + 0.07
= 0.11333 or 11.33 %
Kd = Cost of Debt
= Interest × (1 - tax rate)
= 11% × ( 1 - 0.21)
= 8.69 %
Weighted cost of capital = 11.33 % × 60% + 8.69 % × 40%
= 10.27 %
Suppose the following items are taken from the 2017 balance sheet of Yahoo! Inc. (All dollars are in millions.)
Goodwill ............................................................. $3,927
Common stock ........................................................ 6,283
Equipment .............................................................. 1,737
Accounts payable ...................................................... 152
Patents ................................................................... 234
Stock investments (long-term) ...................................... 3,247
Accounts receivable .................................................. 1,061
Prepaid rent .............................................................. 233
Debt investments (short-term) ...................................... 1,160
Retained earnings .................................................... 6,108
Cash ................................................................... 2,292
Notes payable (long-term) ............................................ 734
Unearned sales revenue ............................................... 413
Accumulated depreciation-equipment 201
Instructions
Prepare a classified balance sheet for Yahoo! Inc. as of December 31, 2017.
Answer:
Yahoo! Inc.Classified balance sheet as of December 31, 2017:Assets: ($ million)
Current Assets:
Cash $2,292
Accounts receivable 1,061
Prepaid rent 233
Debt investments (short-term) 1,160
Total Current Assets $4,746
Non-current Assets:
Stock investments (long-term) 3,247
Equipment 1,737
Accumulated depreciation 201 1,536
Patents 234
Goodwill 3,927
Total non-current assets $8,924
Total Assets $13,690
Current Liabilities:
Unearned sales revenue 413
Accounts payable 152 $565
Non-current Liabilities:
Notes payable (long-term) 734
Total Liabilities $1,299
Stockholders' Equity:
Common stock 6,283
Retained earnings 6,108 12,391
Total liabilities + equity $13,690
Explanation:
a) This Yahoo!'s 2017 classified balance sheet shows the current assets, current liabilities, non-current assets, non-current liabilities, and the stockholders' equity with their separate totals. It helps in calculating important financial ratios and in making comparisons in absolute dollar terms from one period to the other or from one company to another entity.
Food Shoppe Galore had the following information: Total market value of a company’s stock: $650 million Total market value of the company’s debt: $150 million What is the weighted average of the company’s debt?
Answer:
18.75%
Explanation:
Food Shoppe galore has a total market value stock of $650 million
The total market value of the company's debt is $150 million
The first step is to calculate the total market value of the company's capital
= $150,000,000 + $650,000,000
= $800,000,000
Therefore, the weighted average of the company's debt can be calculated as follows
= $150,000,000/$800,000,000
= 0.1875×100
= 18.75%
Hence the weighted average of the company's debt is 18.75%
Which of the following are recommended ways to learn more about IT careers? Check all of the boxes
that apply.
scheduling an appointment with a career counselor at a school
attending an informational session
applying for an internship
renting a science fiction movie about computer viruses
contacting a professional organization, such as CompTIA
Answer:
scheduling an appointment with a career counselor at a schoolattending an informational sessionapplying for an internshipcontacting a professional organization, such as CompTIAExplanation:
To learn more about IT careers or just carriers in general, one can contact the Career counselor at school. Their job is to help students find out more abut careers so that they know which path they would like to follow.
One can also attend information sessions where they can listen to people speak on IT careers and ask questions they would like answers to as well.
A practical way to find out about IT careers is to intern at an IT firm. This way you get to see first hand what the job entails and if it is the kind of thing you would like to do.
There are also professional organizations that offer certifications in IT such as CompTIA. As they are well versed in the area, they can provide more information on IT careers including the educational background required.
Answer:
1. Scheduling an appointment with a career counselor at school.
2. Attending an informational session.
3. Applying for an internship
5. Contacting a professional organization, such as CompTIA.
Explanation: This is the correct answer on Edge 2021, just did the assignment. Hope this helps ^-^.
Which of the following is included in the entry to record the issuance of shares of par value common stock at per share for cash?
A) Cash is debited for $294,000.
B) Common Stock is debited for $98,000.
C) Common Stock is credited for $294,000.
D) Paid-In Capital in Excess of Par-Common is debited for $196,000.
Answer:
A) Cash is debited for $294,000. and,
C) Common Stock is credited for $294,000.
Explanation:
When Shares are Issued for Cash, recognize the Assets of Cash (Debit) and also recognize an equity element - Common Stock (Credit).