Answer:
The right one
Explanation:
The right one
What is the present value of a 3-year annuity of $150 if the discount rate is 7%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
PV= $393.65
Explanation:
Giving the following information:
Cash flow= $150
Number of periods= 3 years
Interest rate= 7%
To calculate the present value of the annuity, first, we need to determine the future value:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {150*[(1.07^3) - 1]} / 0.07
FV= $482.24
Now, the present value:
PV= FV/(1+i)^n
PV= 482.24/1.07^3
PV= $393.65
A furniture manufacturer specializes in wood tables. The tables sell for $150 and incur $60 in variable costs. The company has $11, 700 in fixed costs per month. The company desires to earn an operating profit of $10, 800 per month. (Abbreviation used; CM = contribution margin.)
1. Calculate the required sales in units to earn the target profit using the equation method.
2. Calculate the required sales in units to earn the target profit using the contribution margin method.
3. Calculate the required sales in dollars to earn the target profit using the contribution margin ratio method.
4. Calculate the required sales in units to break even using the contribution margin method.
Answer:
1. 250 wood tables
2. 250 wood tables
3. $37,500
4. 130 wood tables
Explanation:
Sales (units) required to earn a target profit = (Fixed Costs + Target Profit) ÷ Contribution per unit
Where,
Contribution per unit = Selling Price per unit - Variable Costs per unit
= $150 - $60
= $90
Therefore,
Sales (units) required to earn a target profit = ($11, 700 + $10, 800) ÷ $90
= 250 wood tables
Contribution Margin Ratio = Contribution / Sales × 100
= $90 / $150 × 100
= 60 %
Sales (dollars) required to earn a target profit = (Fixed Costs + Target Profit) ÷ Contribution Margin Ratio
= ($11, 700 + $10, 800) ÷ 60%
= $37,500
Sales in Units to Break Even = Fixed Costs ÷ Contribution per unit
= $11, 700 ÷ $90
= 130 wood tables
44. What's the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%?
Answer:
$5,000
Explanation:
A perpetuity pays $250 every year
The appropriate interest rate is 5%
= 5/100
= 0.05
Therefore the present value of the perpetuity can be calculated as follows
= 250/0.05
= $5,000
Hence the present value of the perpetuity is $5,000
According to the technical approach, what matters in exchange rate determination is:____________.
A. the past behavior of exchange rates.
B. the velocity of money.
C. the future behavior of exchange rates.
D. the beta.
Which of the following are examples of long-run fixed costs:_______a. Mortgage payments b. Hourly wage costs c. Payments for production inputsd. None of the above
Answer:
a. Mortgage payments
Explanation:
Fixed costs are costs that do not vary with output. e,g, rent, mortgage payments
If production is zero or if production is a million, Mortgage payments do not change - it remains the same no matter the level of output.
Hourly wage costs and payments for production inputs are variable costs
Variable costs are costs that vary with production
If a producer decides not to produce any output, there would be no need to hire labour and thus no need to pay hourly wages.
___________ not only involves thinking through what it is that the negotiator wants to achieve but also how she is going to achieve it.
Answer:
B. Preparation
Explanation:
A. Assertiveness
B. Preparation
C. Self-confidence
D. End-states
Preparation not only involves thinking through what it is that the negotiator wants to achieve but also how she is going to achieve it.
It is a management principle which allows consumers get ready on how to purchase a product.
Preparation helps consumers to think about the effective way of negotiating price with the seller and ensuring a successful negotiation.
You would like to have enough money saved after your retirement such that you and your heirs can receive $100,000 per year in perpetuity. How much would you need to have saved at the time of your retirement in order to achieve this goal
The question is incomplete. The complete question is stated below,
You would like to have enough money saved after your retirement such that you and your heirs can receive $100,000 per year in perpetuity. How much would you need to have saved at the time of your retirement in order to achieve this goal? (Assume that the perpetuity payments start one year after the date of your retirement. The annual interest rate is 12.5 percent.)
Answer:
At the time of retirement, the amount that needs to be saved for this perpetuity should be $800000
Explanation:
A perpetuity is a series of constant cash flows that occur after equal intervals of time for an indefinite time period. Thus, it is a series of perpetual cash flows. To calculate the amount that need to be saved at the time of retirement to receive a perpetuity of $100000 per year starting from one year after the retirement, we need to calculate the present value of the perpetuity. The formula for the present value of the perpetuity is,
Present value of perpetuity = CF / r
Where,
CF is cash flow or constant payment by perpetuityr is the required rate or return or the interest ratePresent value of perpetuity = 100000 / 0.125
Present value of perpetuity = $800000
_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.
Answer:
A) Total revenue
Explanation:
The total revenue could be computed by taking the sale price with the quantity to be sold
Here is the formula to determine the total revenue which is shown below:
Total revenue is
= Sale price × quantity
= P × Q
Hence, for the given situation, the total revenue is the answer and the same is to be considered
strategic trade-offs that are different between Walmart and Nordstrom even though they are in the same industry. Think of another industry that you know fairly well and select two firms there that also have made very different choices for these trade-offs. Describe some of the differences between these firms. What type of trade-off decisions have these firms made
Answer: The answer is given below
Explanation:
Another industry that I know fairly well that also have made very different choices for these strategic trade-offs is a restaurant such as McDonald’s and the Michelin-starred. Even though they are in food industry, it should be noted that their approach is not thesame.
McDonald’s sells cheap, fast foods and typically employs workers who have low skills while Michelin-starred restaurant sells food that are of high quality and also has excellent service. It should also be noted that McDonald's doesn't really place much focus on the experience and the atmosphere while Michelin does.
A firm that uses ___________ segmentation divides a market into groups based on age, income, or level of education.
Answer:
Demographic
Explanation:
Demographic segmentation is when a business divides its market according to characteristics like race, age, gender, income, religion and level of education to have a better understanding of the customer's preferences and needs to be able to design strategies that reach the target market more effectively. According to this, the answer is that a firm that uses demographic segmentation divides a market into groups based on age, income, or level of education.
"can charge a different price for each customer based on that buyers willingness to pay, they would:"
Answer: b. Producer surplus is maxmized
Explanation:
As a result of inefficiency in a monopoly market, there exists a deadweight losses that arises because customers lose surplus due to not getting the optimal price. As a result, they are unwilling to spend at a certain amount to buy goods and services which leads to a loss for the monopoly as well.
If a monopoly is able to charge a different price for each customer based on that buyers willingness to pay they would be able to capture all the consumer surplus and make it producer surplus so that the producer surplus is maximized.
Which one of the following would not be considered an advantage of the corporate form of organization?a. Limited liability of ownersb. Separate legal existencec. Continuous lifed. Government regulation
Answer:
Disadvantage of Corporate Form of Organization:
d. Government regulation
Explanation:
In recent times, government regulation of businesses appears to be regarded as a disadvantage of the corporate form of organizations. Governments intervene and regulate corporate entities whenever they fail to be self-regulatory. But, the regulations may appear to be so much that the corporate form of organization now looks like a disadvantage. Given the many corporate scandals, collapses, and misapplications of resources by corporate entities that have become the order of the day, government regulation is very important. Without government regulation, many corporate bodies will not be acting in the public interest. This is more so with public entity corporate organizations with diverse stakeholders and corporate managers who act as if they were running their own autonomous governments.
On January 1, 2012, Uncle Company purchased 80 percent of Nephew Company’s capital stock for $672,000 in cash and other assets. Nephew had a book value of $806,000 and the 20 percent noncontrolling interest fair value was $168,000 on that date. On January 1, 2011, Nephew had acquired 30 percent of Uncle for $325,750. Uncle’s appropriately adjusted book value as of that date was $1,052,500.
Separate operating income figures (not including investment income) for these two companies follow. In addition, Uncle declares and pays $30,000 in dividends to shareholders each year and Nephew distributes $4,000 annually. Any excess fair-value allocations are amortized over a 10-year period.
Uncle Nephew
Year Company Company
2012 $131,000 $44,600
2013 174,000 55,000
2014 213,000 68,200
A. Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary’s income recognized by Uncle in 2014?
B. What is the noncontrolling interest’s share of 2014 consolidated net income?
Answer:
a. $51,840
b. $15,440
Explanation;
a. First find the excess fair-value allocation;
= Fair value of Nephew - Book Value
Fair Value = Uncle ownership + Non-controlling interest
= 672,000 + 168,000
= $840,000
Excess fair value = 840,000 - 806,000
= $34,000
Any excess fair-value allocations are amortized over a 10-year period;
= 34,000/10
= $3,400
The Income to be recognized will be reduced by this yearly amotization so the 2014 income recognized by Uncle would be;
= (Nephew income - Amortization) * Uncle ownership stake
= ( 68,200 - 3,400) * 0.8
= $51,840
b. Nephew Company also owns 30% of Uncle which means that they will receive 30% of Uncle dividends.
= 0.3 * 30,000
= $9,000
Added to their own income;
= 9,000 + 68,200
= $77,200
The Non-controlling interest owns 20% so the income they will recognise is;
= 0.2 * 132,100
= $15,440
nother similar question, reattempt last question below, or select another question. Start of Questions A company makes greeting cards and their research shows that that price and demand are related linearly: p = m x + b . They know that for every additional card they wish to sell they need to drop the price by $0.05. They also know that in order to sell 320 cards they need to set the price at $7. Find the linear equation relating price to demand.
Answer:
p = (-0.05)x + 23
Explanation:
The linear equation relating price to demand. can be calculated by finding the value of b first and then putting the value of b in the equation
Data
Equation: p = m x + b
m = -0.05
x = 320
p = $7
Solution
p = m x + b
7 = (-0.05 x320)+b
7 = -16 + b
7+16 = b
b = 23
So the linear equation relating price to demand after putting the value of b will be
Equation: p = (-0.05)x + 23
Store Travel Time Each Way Price of a Dress
(Minutes) (Dollars per dress)
Local Department Store 15 104
Across Town 30 87
Neighboring City 60 80
Juanita makes $36 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $36 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop.
Assume that Juanita takes opportunity costs and the price of the dress into consideration when she shops. Juanita will minimize the cost of the dress if she buys it from the_______.
Answer and Explanation:
For the local departmental store
As the person travels 30 minutes but the person sacrificed $36 for an hour at work so here the opportunity cost of the time is $36
For the across town
The person J travel time is 60 minutes ( 30 + 30) and her shopping time is 30 minutes but sacrificed $36
So the opportunity cost is
= 60 minutes + 30 minutes
= 90 minutes
= $54
For the neighbor city
The person J travel time is 120 minutes (120 + 120) and her shopping time is 30 minutes but sacrificed $36
So the opportunity cost is
= 120 minutes + 30 minutes
= 150 minutes
= $90
Now the table is
Store Opportunity Cost Price of a Dress Total Cost
of Time
(Dollars) (Dollars per dress) (Dollars)
Local
Department
Store 36 104 140
Across Town 54 87 141
Neighboring City 90 80 170
So she should buy from the local department cost as it contains the minimum cost
Suppose that Second Republic Bank currently has $100,000 in demand deposits and $70,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 20%. Please calculate Second Republic Bank's:_________.(a) reserves(b) required reserves(c) excess reserves
Answer:
$30,000
$20,000
$10,000
Explanation:
Reserves is the total amount of a bank's deposit that is not given out as loans
Reserves = Deposits - outstanding loans
$100,000 - $70,000 = $30,000
Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank
Required reserves = reserve requirement x deposits
0.2 x $100,000 = $20,000
Excess reserves is the difference between reserves and required reserves
$30,000 - $20,000 = $10,000
Bramble Corp. is planning to sell 1300 boxes of ceramic tile, with production estimated at 1270 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $18 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Bramble has 4600 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
Answer:
Purchases= 55,780 pounds
Explanation:
Giving the following information:
Production= 1270 boxes
Each box of tile requires 44 pounds of clay mix
Bramble has 4,600 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory.
To calculate the purchase required, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 1,270*44 + 4,500 - 4,600
Purchases= 55,780 pounds
Real options analysis is appropriate to use when __________________; a ________________ investment up front can be followed by subsequent investments.
Answer:
1. investments can be staged;
2. smaller
Explanation:
Real Option is a term that describes a form of investment tool, which is utilized to assess and analyze the delicate risks involved when it comes to starting a new business venture.
Hence, Real options analysis is appropriate to use when INVESTMENT CAN BE STAGED; a SMALLER investment upfront can be followed by subsequent investments.
When a company holds stock of several different corporations, the group of securities is identified as a(n)
Complete Question:
When a company holds stock of several different corporations, the group of securities is identified as a(n)?
Group of answer choices
a) investment portfolio
b) controlling interest
c) consolidated portfolio
d) affiliated investment
Answer:
a) investment portfolio.
Explanation:
When a company such as a hedge fund, investment company etc, holds stock of several different corporations, the group of securities is identified as an investment portfolio.
An investment portfolio could comprise of cash and cash equivalents, stocks, commodities, bonds, currencies, real estate investment trusts (REITs) and other financial assets such as exchange-traded funds (ETFs) and mutual funds used by an investor to earn profits while ensuring they're well preserved.
When a seller allows a buyer an amount for old equipment traded in for new equipment having a similar use, this amount is called boot. the trade-in allowance. commercial substance. None of these choices are correct.
Answer: the trade in allowance
Explanation:
Trade alliances is an offer made by marketers to the distribution line channels like the wholesalers, retailers etc over a specific period of time particular in order to boost sales and encourage reduction in retail price.
When a seller allows a buyer an amount for old equipment traded in for new equipment having a similar use, this amount is referred to as the trade in allowance.
The price that the writer of a call option receives for the underlying asset if the buyer executes her option is called the
Answer:
D. strike price or exercise price.
Explanation:
The strike price is the price at which the price is defined at the time when the option holder could purchase in case of the call option and sell in case of put option, also the option is exercised when the security is underlying
Plus, the strike price another name is the exercise price
Therefore the given situation is known as strike price or exercise price.
Not all buyers of an industry's product have equal degrees of bargaining power with sellers, because
Answer:
some sellers may be less sensitive than others to price, quality, or service differences.
Explanation:
Bargaining power is defined as the ability of a buyer to demand for better quality product, better service, or lower prices for goods.
Buyer bargaining power is higher in markets where products are undifferentiated from one another. So no single buyer has ability to determine price and quantity because buyer has other choices.
However where products are differentiated buyers have less bargaining power. This is because they may have no choice when a particular firm produces what they want.
Differentiated markets leads to some sellers having less sensitivelity than others to price, quality, or service differences.
Answer:
There are several reasons why this can happen and they depend on whether the market is a sellers' or buyers' market. A sellers' market is generally one where the number of buyers is very large and they tend to make small transactions. On the other hand, sellers are less sensitive to price or product differentiation because demand is higher than the supply. This results in a shortage of goods which in turn gives the sellers higher pricing power.
Opportunity costs are an important consideration for managers when deciding whether to accept special orders.
a) true
b) false
Answer:
True
Explanation:
When deciding whether to accept special orders, it is important that opportunity costs is considered by managers.
It helps managers to make a good choice and not regret later.
When deciding whether to accept special orders, it is important to compare and calculate what extra revenues that will be made against the extra costs that will be incurred.
Opportunity costs is actually a hypothetical cost which is incurred due to going for an alternative over the other available.
Answer:
True got you man
Explanation:
True
You are trying to decide which of two automobiles to buy. The first is American-made, costs $3.0500 x 104, and travels 28.0 miles/gallon of fuel. The second is European-made, costs $4.9100 x 104, and travels 19.0 km/liter of fuel. If fuel costs $3.00/gallon, and other maintenance costs for the two vehicles are identical, how many miles must each vehicle travel in its lifetime for the total costs (puchase cost fuel cost) to be equivalent
Answer:
Both cars(American and European) must travel 8,060 kilo metres each during their lifetime for the total cost(purchase cost + fuel equivalent) to be equivalent
Explanation:
With regards to the above, the cost equation for both cars will be equated together.
Furthermore, we will convert gallons into litres while also converting miles into kilometers.
Since 1 gallon has 3.785 litres; 1 mile also has 1.609 kilo metre, hence milage of the first car in kilo metre per litre would be ;
Milage American made = [ 28 miles × 1.609 ] / 3.785
= 11.90 kilo meter per litres.
Cost of Gas per litre = $3 per gallon / 3.785
= 0.79 per litre
Gas cost per kilo metre(American made) = 0.79 per litre / 11.90
= 0.066 per km
Gas cost per kilo metre(European made) = 0.79 per litre / 19.0
= 0.042 per km
We can sum up the equation of first car which is American made( Purchase price + Fuel cost)
We can make a be the number of kilo metres where total cost for both cars would be equal.
Total cost = 317.2 + 0.066a
Also, the total cost equation - purchase price + fuel cost of European car is represented as;
Total cost = 510.64 + 0.042a
317.2 + 0.066a = 510.64 + 0.042a
Collect like terms
0.066a - 0.042a = 510.64 - 317.2
0.024a = 193.44
a = 8,060 kilo metres
Therefore, both cars(American and European) must travel each 8,060 kilo metres in their life time for the total costs( purchase cost + fuel cost) to be equivalent.
Bob reviews an income statement that includes percentages of how each item relates to sales. What kind of financial analysis is this?
Answer:
Common Size Analysis
Explanation:
In a common size, Statement of Comprehensive Income, sales revenue is expressed as 100% and every other item is expressed as a percentage of sales revenue.
Why is it difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures?
Answer:
1. It is not easy to get funds for a start up, as many banks do not consider it as a successful decision to provide loan to a start up, as the feasibility of recovery of loan cannot be identified and guaranteed.
2. Venture capitalists also faces the same issue as of bank, also they are large equity investors and tend to invest in even larger project.
3. Private investors do not blindly invest and rather are more cautious then banks or venture capitalists, as because they do not huge funds to invest, and with less amount of investment they need even higher assurance.
4. Public stock is never available for a start up as for public stock issue you need great credibility, and good previous record.
Which of the following are advantages that firms could gain by working together as if were a monopoly?
A. Firms can charge a higher price.
B. Firms can increase industry productivity.
C. Firms can hold down industry output.
Answer:
A. Firms can charge a higher price.
C. Firms can hold down industry output.
Explanation:
As we know that
There is only one seller in the monopoly market which determinant of the overall market. The vendor demanded the heavy price and there's no competition because of this. This market contains free to enter and exit
so the first option satisfy this condition also it hold down the output of an industry
Therefore the option A and C is correct
Hence, the option B is incorrect
What is the effect on the financial statements of recording a $15,000 repair expense as a debit to Machinery and a credit to Cash?
Answer:
The net income and assets for the year will be overstated by $15,000.
Explanation:
A repair expense of $15,000 is a period cost that should be expensed in the period in which it is incurred and not carried forward to the next accounting period or capitalized. By capitalizing this repair expense, the net income and assets for the period are overstated. The concept of accrual is also not followed. Repair expense can only be capitalized when it adds to the value of an asset, which it does not possess before the repair. But ordinarily, repairs restore an asset to its former value and does not add to the value.
At the start of 2071 Cowboy Corp. purchased 25% of Bebop Tech Inc. for $45 million. At the time of purchase, the carrying value of Bebop Tech's net assets was $75 million. The fair value of Bebop Tech's depreciable assets (5 year useful life remaining) was $25 million in excess of their book value. For this year, Bebop Tech reported a net income of $50 million and declared and paid $25 million in dividends. What amount will Cowboy Corp. recognize as additional depreciation at the end of 2071?
A. $6.25 Million
B. $5 Million
C. $1 Million
D. $125 Million
Answer:
B. $5 Million
Explanation:
The amount of additional depreciation that Cowboy Corp. would recognize in the year 2071 is the excess of Bebop Tech Inc.'s fair value of assets over the book value divided by the useful life remaining which is 5 years
The excess of fair value of assets over book value was $25 million
The remaining useful in respect of the assets was 5 years
The additional depreciation recognizable=$25 milion
The additional depreciation =$25 million/5
The additional depreciation=$5 million
Research from the 1970s to the 1990s found that over 90 percent of a fund's returns over time is explained by
Answer: Asset allocation
Explanation:
Research from the 1970s to the 1990s found that over 90 percent of a fund's returns over time is explained by asset allocation.
It should be noted that asset allocation is simply referred to as an investment portfolio technique which balance risk through the division of assets among major categories like stocks, bonds, cash, real estate, and derivatives.