Answer:
$28.57
Explanation:
Dividend growth model can only be used in a situation where the firm pays a dividend which can tend to grow at constant rates reason been that the stock has been influenced by the growth rates which is involved in the dividends which means the firm can increase the dividends.
Therefore the Dividend that is to be paid next year will be:
$2Growth rates
5 %Rates of return
12% Return on Investment
Formular for the calculation of current price of the stock = D1/(r-g)
Where:
D1=2%
r=12%
g=6%
Hence:
2/ (0.12-0.05)= $ 33.33
=2/0.07
=$28.57
Therefore the amount I should be prepared to pay for the stock today will be $28.57
Phionia Phelps has developed a gourmet cat food. Not only is this food eagerly eaten by the most finicky felines, but it is specially formulated to prevent the many health problems of aging cats. Phionia has been making the food on her kitchen range and selling it at $250 per case only to close acquaintances who are also cat lovers. One of her wealthy acquaintances has now offered to invest in her business if Phionia will begin selling the product through her website. However, the investor wants Phionia to produce a budget for the first six months of operation. Based on her experience to date, Phionia predicts the following sales in cases:
Each case of Finicky Feline Gourmet Cat Dinner requires 5 pounds of prime lamb meat, 10 pounds of short grain Chinese rice, 2 pounds of wild caught Alaskan salmon, and 1 pound of secret vitamins and supplements. Phionia plans to maintain end-of-month inventories equal to 10 percent of the next month's projected sales, to meet expected sales growth. All the ingredients inventories are to be maintained at 5 percent of the production needs for the next month, but not to exceed 1,000 pounds of any one ingredient. January will begin with all inventories at the projected levels. Phionia has the following price quotes good for the following year:
The production process requires direct labor at two skill levels: (1) ingredient preparation, $18 per hour, and (2) cooking and canning, $24 per hour. Two workers are willing to work part days if there is not enough demand for them to work full time. lt takes one hour to process one batch. Because of preparation and cleanup time, only six batches can be produced per day. Each batch produces enough food to fill 100 cases. Manufacturing overhead is $6,000 fixed per month plus $15 per case.
Item $ per pound
Lamb 15
Rice 1,20
Saimon 24
Viamlns 45
1. Prepare the following budgets for the period. January through June:________.
a. Sales budget in dollars.
b. Production budget in units.
c. Direct materials purchases budget in pounds.
d. Direct materials purchases budget in dollars.
e. Direct manufacturing labor budget in dollars.
2. Comment on the viability of this business and the advisability of the investor making a $50,000 investment to get it started.
Answer:
Explanation:
a.
Sales budget = $ 250 per case * 100 cases per batch * 6 batches per day * 20 days a month * 6 months
= $ 18,000,000
b. Production budget in units = 100 cases per batch * 6 batches per day * 20 days a month * 6 months
= 72,000 cases
Production budget including 10 percent inventories
= 72000 + 100*6*20*10%
= 73200 cases
c. Direct materials purchases budget in pounds including 5% inventories
Lamb = 5 pounds per case * (73200 cases + 100*6*20*5% cases )
= 369,000 pounds
Rice Lamb = 10 pounds per case * (73200 cases + 100*6*20*5% cases )
= 738,000 pounds
Salmon = 2 pounds per case * (73200 cases + 100*6*20*5% cases )
= 147,600 pounds
Vitamins = 1 pound per case * (73200 cases + 100*6*20*5% cases )
= 73,800 pounds
d. Direct materials purchases budget in dollars = 369000*15 + 738000*1.2 + 147600*24 + 73800*45
= $ 1,328,400
e. Manufacturing labor budget in dollars = 1 hours per batch * 6 batches per day * 20 days per month * 6 months * ($ 18 per hour for ingredient preparation + $ 24 per hour for cooking and canning ) * 2 workers
= $ 60,480
2. The business requires an investment of $ 1,328,400 + 60,480
= $ 1,388,880 over six months.
This translates to monthly investment of $ 231,480
Therefore $ 50,000 investment is too small to begin with.
Which of the following is not an example of a "lag" that diminishes the potential impact of the use of fiscal policy? a. the recessionary lag b. the data lag c. the legislative lag d. the transmission lag
Answer:
a. the recessionary lag
Explanation:
Fiscal policy in economics refers to the use of government expenditures (spending) and revenues (taxation) in order to influence macroeconomic conditions such as Aggregate Demand (AD), inflation, and employment within a country. Fiscal policy is in relation to the Keynesian macroeconomic theory by John Maynard Keynes.
Lag in economics can be defined as a measure of the time it takes to recognize economic conditions and how they're being responded to by the government (policy makers).
For instance, measuring the time between when a fiscal policy is implemented and when the people feel its impact in the society.
The recessionary lag is not an example of a "lag" that diminishes the potential impact of the use of fiscal policy because after implementation, the next phase is for the people to feel the impact or effectiveness of the fiscal policy.
Examples of a "lag" that diminishes the potential impact of the use of fiscal policy are;
1. The data lag.
2. The legislative lag.
3. The transmission lag.
Betterton Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs—equipment depreciation and supervisory expense-are allocated to three activity cost pools—Machining, Order Filling, and Other—based on resource consumption. Data to perform these allocations appear below:
Overhead costs:
Equipment depreciation $ 49,000
Supervisory expense $ 3,000
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation 0.50 0.30 0.20
Supervisory expense 0.10 0.40 0.50
In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity: Activity:
MHs (Machining) Orders (Order Filling)
Product A8 3,000 500
Product K2 17,000 1,500
Total 20,000 2,000
What is the overhead cost assigned to Product A8 under activity-based costing?
Answer:
$7,695
Explanation:
The computation of overhead cost assigned to Product A8 under activity-based costing is shown below:-
Overhead Amount Machining Amount Order Amount Other Amount
Filling
Equipment
Depreciation $49,000 0.5 $24,500 0.3 $14,700 0.2 $9,800
Supervisory
Expense $3,000 0.1 $300 0.4 $1,200 0.5 $1,500
Total $52,000 $24,800 $15,900 $11,300
Cost per Activity pool unit
Particulars Machining Order Filling Allocated Cost a $24,800 $15,900
Activity b 20,000 hours 2,000 order Fillings Cost per Activity pool unit 1.24 7.95
c = a ÷ b per machine Hour per order fillings
Here, in reference to Product A8
Machine Hours 3,000
Cost per Activity pool unit 1.24 per Machine Hour
Total Cost 3,720
To reach total cost we simply multiply the machine hours with cost per activity pool unit
Order Filling 500
Cost per Activity pool unit 7.95 per order fillings
Total Cost 3,975
To reach total cost we simply multiply the order filling with cost per activity pool unit
Total Overhead cost assigned to Product A8 = Total cost of machine hours + Total cost of order filling
= $3,720 + $3,975
= $7,695
One-year Treasury securities yield 4.15%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 4.4%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities
Answer:
The yield today for 2-year Treasury securities is 4.27%
Explanation:
In order to calculate the yield today for 2-year Treasury securities we would have to calculate the following formula:
2-year treasury yield = [(1 + 1-yr treasury yield) * (1 + 1-yr treasury yield, 1 year from now)]1/2 - 1
= [(1 + 0.0415) * (1 + 0.044)]∧1/2 - 1
= [1.0873]∧0.5 - 1
= 1.0427 - 1 = 0.0427, or 4.27%
The yield today for 2-year Treasury securities is 4.27%
Ocean Auto Parts Company uses the direct method to prepare its statement of cash flows. Refer to the following information reported for 2017:1. Sales Revenue, $516,0002. Accounts Receivable, beginning balance, $97,0003. Accounts Receivable, ending balance, $63,000Compute the collections from customers.A.$453,000B.$550,000C.$356,000D.$160,000
Answer:
The answer is B. $550,000
Explanation:
Collection from customers is a line item in operating activities under cash flow. It is the total amount of money business collected from customers for its sales on credit.
Beginning receivable -------$97,000
Add:
Sales revenue------------------$516,000
Less:
Ending receivable-------------$63,000
Collections from customers-- $550,000
The bond has a coupon rate of 6.83 percent, it makes semiannual payments, and there are 4 months to the next coupon payment. A clean price of $1,049 and the par value is $1,000. What is the invoice price
Answer:
The invoice price for the bond is $1,060.38
Explanation:
Given the following:
PV= Par value = $1,000 ,
CV= Clean Price = $1,049
Coupon Rate per annum = 6.83%
To calculate the Semiannual Coupon Rate= Coupon Rate per annum/2= 3.415%
To calculate Semiannual Coupon= Semiannual Coupon Rate*PV
= 3.415% * $1,000 = $34.15
With an interest accured over 2 months, we calculate it thus:
Accrued Interest = $34.15 * 2/6 = $11.38
To calculate Invoice price:
Invoice Price = CP + Accrued Interest
Invoice Price = $1,049.00 + $11.38
Invoice Price = $1,060.38
On June 1, Kareem sends Fatima an e-mail offering to build her a new garage for $20,000. In his e-mail, Kareem wrote, "acceptance by certified mail is advisable." On June 2 at 8 a.m., Kareem sends Fatima a certified letter attempting to revoke the offer. At 2 p.m. the same day, Fatima mails Kareem a letter via certified mail attempting to accept his offer. Under these circumstances, _____.
Answer:
B. Fatima's acceptance is effective upon dispatch
Explanation:
The option B is correct as it is mentioned in the question that acceptance by certified mail is advisable that implies if the parties have mail each other than the contract should be accepted
Therefore in the given case, the certified mail is accepted when it is dispatched that results into an acceptance of Fatima i.e tp be effective
Hence, the second option is correct
A combination of news covered by the media that boosts sales without having to pay is best described by the term ________. (1pts) Question 5 - A combination of news covered by the media that boosts sales without having to pay is best described by the term ________. Select bootstrap marketing as your answer bootstrap marketing Select entertailing as your answer entertailing Select public relations as your answer public relations Select data mining as your answer data mining
Answer:
Public relations.
Explanation:
Public relations is a combination of news covered by the media that boosts sales without having to pay.
Public relations involves the process of professionally maintaining and sustaining a favourable public perception and image by an organization or an elite.
As a rule, every organization makes it a standard to always go for the best public relations manager, so as to have a competitive advantage over industry rivals and to boost their public image or reputations.
Hence, PR managers use public relations, as a strategic communication process to issue and disseminate quality informations between their principal (usually an individual) or an organization and the public, in order to build a mutualistic relationship.
Suppose that Dmitri, an economist from an AM talk radio program, and Frances, an economist from a school of industrial relations, are arguing over saving incentives. The following dialogue shows an excerpt from their debate:
Caroline: The usefulness of government intervention in the economy is a long-standing issue that economists continue to debate.
Antonio: I feel that government involvement in the economy should be reduced because government programs cause more harm than good.
Caroline: While I do agree that government programs can be inefficient, I really think they are necessary to help the less fortunate.
1. The disagreement between these economists is most likely due to
a. differences in values
b. differences in scientific judgement
c.differences in perception verse reality.
2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Lawyers make up an excessive percentage of elected officials.
b. Minimum wage laws do more to harm low-skilled workers than help them.
c. Tariffs and import quotas generally reduce economic welfare.
Answer:
1. The disagreement between these economists is most likely due to
a. differences in values
2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Lawyers make up an excessive percentage of elected officials.
Explanation:
Economists chosen at random do not usually agree on economic events and realities, instead, they are more likely to agree on issues that are not economic. They offer differing opinions based on similar principles. Most of their disagreements stem from differences in what they place their values on. Some value market-oriented approaches while others value government interventions in market situations, with other variants in-between.
Plaintiffs filed a class action lawsuit against investment banks alleging that they inflated prices on more than 300 IPOs, causing IPO investors to overpay for stock, and unlawfully benefited these banks through overcompensation of banking commissions and profits made through quick sales of this stock in their own accounts before prices settled into a more realistic valuation. How would you combat such abuses going forward
Answer: The answer is provided below
Explanation:
When we think about investment, individuals and firms should understand the risks before they invest their money, and also the loss risks.
When investing in a business or a corporation that you may work for, it is vital to understand and be clear on the fine print and also the 180-dayhold. It is vital on any purchase to understand the risks and rules which come along with it especially stocks.
It is crucial to the success of an individual, that research is done in order to make sure everything is understood prior to the stock sale.
On the other side, federal banking regulators committee should also do a better job with the investigations and the enforcements of bank and the stock regulations.
On January 1, 2021, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $470,000. Inventory data for 2021 through 2023 are as follows:
Date Ending Inventory at Year-End Costs Cost Index
12/31/2021 $391,400 1.03
12/31/2022 454,250 1.15
12/31/2023 477,400 1.24
Required: Calculate Taylor's ending inventory for 2021, 2022, and 2023.
Answer:
Taylor Company ending inventories are
2021= $380600
2022= $397850
2023= $386350
Explanation:
Kindly check attached pdf for the computation of the solution
Kinds of managers
An example of a position that a team leader would hold is:_______
a. vice president.
b. department manager.
c. group facilitator.
d. divisional manager
Using your knowledge of the different levels of management in organizations, indicate whether each statement is most likely to apply to first-level, middle-level, or top-level managers.
Answer:
Option C
group facilitator.
Explanation:
A team leader would most likely be a group facilitator. This is because a team is usually a small unit assigned with the task of achieving a specific goal. Most of the time, teams are given small and well defined tasks which are not usually as complex as that of the whole organization.
A team leader would be a group facilitator because he is expected to coordinate the efforts of a small group of people to achieve a set goal. His scope of authority and influence is only limited to that of the group.
Harrod Company paid $5,800 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $5,800, and no adjustments had been made previously. The adjusting entry required on December 31 is:
Answer:
Prepaid Insurance = credit = $2900.
Prepaid Insurance = debit = $2900
Explanation:
So, we are given the following data or parameters or information which is going to assist us in solving this particular Question or problem;
=> The amount paid for a 4-month insurance premium in advance on November 1, with coverage beginning on that date = $5,800.
=> "The balance in the prepaid insurance account before adjustment at the end of the year =$5,800, and no adjustments had been made previously.
So, we are asked to determine the adjusting entry required on December 31.
The adjusting entry required on December 31;
Prepaid Insurance = credit = 5800 × 2/4= $2900.
Prepaid Insurance = debit = $2900.
Answer:
Debit Insurance Expense $2,900; Credit Prepaid Insurance $2,900
Explanation:
Total Prepaid Insurance= $5,800
Monthly Insurance=Total Prepaid Insurance / 4 = $1,450
Insurance expenses for 2 month (November and December)= $1,450 * 2 = $2,900
There is no cash transaction in this adjusting entry
When insurance expenses increase= Debit
When decrease in prepaid expenses= Credit
Debit Insurance Expense $2,900; Credit Prepaid Insurance $2,900
Expenses include all of the following except: Multiple Choice making a payment on account. using supplies. paying for electricity used during the current period. paying wages for production workers for work performed during the current period.
Answer:
using supplies
Explanation:
An expense can be described as cost incurred by a company in a bid to earn revenue.
When supplies are used no explicit cost is incurred in the process so it doesn't qualify as an expense.
I hope my answer helps you
Expenses include making a payment on account, using supplies, and paying wages for production workers for work performed during the current period.
What is not considered an expense?However, paying for electricity used during the current period is not considered an expense. Instead, it is categorized as an operating cost or utility cost.
Expenses typically refer to the costs incurred by a business in its day-to-day operations, such as purchasing inventory, paying wages, or using supplies.
Read more about Expenses here:
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On April 17, 2021, the Loadstone Mining Company purchased the rights to a coal mine. The purchase price plus additional costs necessary to prepare the mine for extraction of the coal totaled $4,950,000. The company expects to extract 990,000 tons of coal during a four-year period. During 2021, 249,000 tons were extracted and sold immediately.Required:
1. Calculate depletion for 2021.
2. Is depletion considered part of the product cost and included in the cost of inventory?
Answer:
1. Depletion for 2021 will be derived if the "tons which were extracted and sold immediately" is divided by "the Depletion per ton"
Depletion for 2021 = Extracted and sold tons in 2021 / depletion per ton
Depletion for 2021 = 249,000 tons * $5 per tons
Depletion for 2021 = $1,245,000
Where as the depletion per ton is be derived when the purchase price plus additional costs necessary is divided extract of tons of coals during the 4 year period.
Depletion per ton = $4,950,000 / 990000
Depletion per ton = $5 per ton
2. Depletion is not considered as part of product cost. It is shown as expense on income statement and reduced from the value of natural resource. So it is equivalent to depreciation of assets.
Operating data for Swifty Corporation are presented below. 2022 2021Sales revenue $830,700 $634,900 Cost of goods sold 529,000 415,000 Selling expenses 124,700 73,600 Administrative expenses 78,800 53,900 Income tax expense 33,500 23,400 Net income 64,700 69,000 Prepare a schedule showing a vertical analysis for 2022 and 2021. (Round percentages to 1 decimal place, e.g. 12.1%.)
Answer and Explanation:
The preparation of the vertical analysis is presented below:
Particulars Amount % Amount %
Sales $830,700 100 $634,900 100
Less:
Cost of goods sold $529,000 63.7 $415,000 65.4
Gross Profit $301,700 36.3 $219,900 34.5
Less:
Selling Expenses $124,700 15.0 $73,600 11.6
administrative expenses $78,800 9.5 $53,900 8.5
Total Operating
expenses $203,500 24.5 $127,500 20.9
Income before
income taxes $98,200 11.8 $92,400 14.5
Less:
Income tax expenses $33,500 4.0 $23,400 3.7
Net Income $64,700 7.8 $69,000 10.8
Working note
The percentage is like
= Items value ÷ sales × 100
Like for cost of goods sold
= $529,000 ÷ $830,700 × 100
= 63.68%
It is same applicable for other items also
A new equipment has been proposed by engineers to increase the productivity of a welding operation of a local fabrication plant. The investment cost is $25,000, and the equipment will have a market value of $5,000 at the end of a study period of five years. Increased productivity attributable to the equipment will amount to $10,000 per year after operating costs have been subtracted from the revenue generated by the additional production. If MARR is 12%, is investing in this equipment feasible
Answer:
NPV =$13,884.89
Investing the the equipment id feasible because it has a positive NPV, thus implies that it will increase the wealth of the company by $13,884.8963
Explanation:
The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.
NPV of an investment:
NPV = PV of Cash inflows - PV of cash outflow
Initial cost = 25,000
Present value of the cash inflow
PV of annuity= 1 -(1+r)^(-n)/r × Annual cash flow
A-10,000, r- 12%, n- 5
PV of annual cash inflow = 10,0000× (1- (1.12^(-5)/0.12=36,047.762
Present Value of Scrap value
PV = S×× (1+r)^(-n)
S- scrap value , n- 5, r 12%
PV of scrap Value = 5,000 × (1.12)^(-5)= 2,837.13
NPV= 36047.76202+ 2837.134279 - 25,000= 13,884.89
NPV =$13,884.89
Investing the the equipment id feasible because it has a positive NPV, thus implies that it will increase the wealth of the company by $13,884.8963
You own a farm, you hire labor and capital to produce apples. The marginal product of the last unit of labor input is 15 and the marginal product of the last unit of capital input is 45. The market wage for labor is $8. If you are using the optimal combination of inputs, then the price of capital is
Answer:
$24
Explanation:
We can say the Optimal combination of inputs can be expressed as the ratio of marginal productivity of labor to the marginal productivity of capital is equal to the ratio of price of labor(wage) to the price of capital(RENT).
Lets denote:
marginal productivity of labor = MPL
marginal productivity of capital = MPC
Wage= W
Rent= R
Then the formula will be
[tex]\frac{MPL}{MPC}=\frac{W}{R}[/tex]
Workings:
Lets put in the values in the formula
[tex]\frac{15}{45} = \frac{8}{R}[/tex]
We have to find out R(Rent)
R= 8x3
R= $24
The bookkeeper for Riverbed Company has prepared the following balance sheet as of July 31, 2017.
RIVERBED COMPANY
BALANCE SHEET
AS OF JULY 31, 2017
Cash $ 72,350 Notes and accounts payable $ 47,350
Accounts receivable (net) 43,850 Long-term liabilities 78,350
Inventory 63,350 Stockholders’ equity 158,850
Equipment (net) 84,000 $284,550
Patents 21,000
$ 284,550
The following additional information is provided.
1. Cash includes $1,200 in a petty cash fund and $12,050 in a bond sinking fund.
2. The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $47,350 and (b) allowance for doubtful accounts $3,500.
3. Inventory costing $5,110 was shipped out on consignment on July 31, 2017. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,110 were recognized on these consigned goods.
4. Equipment had a cost of $115,350 and an accumulated depreciation balance of $31,350.
5. Income taxes payable of $6,000 were accrued on July 31. Riverbed Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the income taxes payable amount.
Prepare a corrected classified balance sheet as of July 31, 2017, from the available information, adjusting the account balances using the additional information.
Answer: The answer has been attached
Explanation:
A balance sheet also referred to as the statement of financial position is a summary of financial balances of an organization.
Kindly note that in the attached diagram, an asset are the resources owned by the company which have future economic value while a liability is something that a person or a company owes usually a sum of money.
The solution has been attached.
Lolita, a Mexican business woman, came to Redmond Washington to negotiate a business deal with Microsoft. Lolita, assuming business was formal, dressed in a formal suit, nylons, and high heels. She met with the Vice President of Worldwide Sales at Microsoft, Kevin Johnson, and greeted him with, "Good morning Vice President Johnson." Kevin was dressed in jeans and sneakers and addressed Lolita with, "Hello Lolita, nice to finally meet you in person." Lolita was offended by this greeting. This example illustrates which assumption about intercultural communication?
Answer:
b) all of these are true.
Explanation:
The scenario described in the question illustrates differences in communication rules that suffer from different cultural influences, this is what we perceive when Mexican Lolita may have been surprised that the American Kevin Johnson communicated with her in a more informal way at a formal work meeting. , and therefore felt offended, as he took into account the type of cultural communication in his country of origin, disregarding the intercultural differences in communication that occur in different countries.
So the ideal is that in a case like the one described in the question, where there are negotiations for business deal with international companies, employees are prepared to relate professionally with different types of people, observing the type of communication context, understanding that there are differences intercultural experiences that imply in the way people relate to each other even in the work environment, and above all, maintain ethics and respect for each and every culture different from yours.
Nickolas Imports recorded a restructuring charge of $21.6 million during fiscal 2014 related entirely to the closing of its California based operations in San Diego and in Tijuana, Mexico. The company's financial statement footnotes indicated that expected employee separation payments amounted to $16.8 million and that fixed asset write-downs accounted for the remainder. Nickolas had never before incurred restructuring charges. At the end of the year, the company's balance sheet included a restructuring accrual liability of $3,600,000. Calculate the cash flow effect of Nickolas’s restructuring during fiscal 2014.
Answer: $13,200,000
Explanation:
Nickolas Import recorded a restructuring charge of $21.6 million.
Of this amount, $16.8 million were for employee separation fees.
When calculating the cash flow effect of the restructuring on Nickolas Imports, the $16.8 million is the relevant account. This is because the Asset write downs that make up the rest of the $21.6 million are not cash items neither can they be accrued like normal expenses or Liabilities so they will not be recorded as an Accrual Liability.
The Net Cashflow effect of Nickolas Imports for the year therefore is,
= 16.8 - 3.6
= $13.2 million.
What this means is that with a restructuring accrual liability of $3,600,000 at the end of the year from an initial Balance of $16.8 million, it means that Nickolas Imports must have settled $13,200,000 during the year to be left with that balance of $3,600,000.
g "At the end of the current year, the owners' equity in Barclay Bakery is $260,000. During the year, the assets of the business had increased by $134,000 and the liabilities had increased by $79,000. Owners' equity at the beginning of the year must have been:"
Answer:
$205,000
Explanation:
Let us assume Owners' equity at the beginning be X
So, the Increase in Owners' equity is $260,000 - X
As we know that
Accounting equation is
Total assets = Total liabilities + total stockholder equity
So,
Total Increase in Assets = Total Increase in Liabilities + Increase in Owners' equity
$134,000 = $79,000 + $260,000 - X
$134,000 = $339,000 - X
So, the X =
= $339,000 - $134,000
= $205,000
Yum! Brands, the parent company of KFC, has pursued an aggressive growth strategy in China. There are now more than 3,700 restaurants in 650 Chinese cities, and KFC has a 40 percent market share of the entire fast-food industry there. Yum! Brands China owns and directly manages about 90 percent of its Chinese stores, so it appears that the company prefers __________ in this market.
Answer:
Direct Investment
Explanation:
DIRECT INVESTMENT can be defined as an investment in which a company, organisation or business owner decide to venture into business with another country which is know as foreign business enterprise in order to acquire and obtain a controlling interest in the enterprise which is why DIRECT INVESTMENT is a way of controlling the ownership of a business in one country by an another entity which is based in another country.
Most Investors use the DIRECT INVESTMENT way to put money into a business operating in another country.
Therefore based on the information given the company prefers DIRECT INVESTMENT method which is why the parent company of KFC has more than 3,700 restaurants in 650 Chinese cities in which the Brands China owns and directly manages about 90 percent of its Chinese stores.
Hence this method is called the DIRECT INVESTMENT method .
A company reported the following information at December 31, Year 1: Accounts payable $ 4,690 Accounts receivable $ 9,540 Cash $ 25,390 Common Stock $ 91,900 Equipment $ 51,400 Inventory $ 33,100 Notes Payable due December 31, Year 3 $ 2,690 Retained Earnings, December 31, Year 1 $ 14,280 Wages payable $ 5,870 What is the amount of current liabilities on the classified balance sheet?
Answer:
$13,250
Explanation:
Current liabilities can be defined as the amount of money incurred by a company. This debt must be repaid back within a period of one year.
From the question above a company reported the following information on its classified balance sheet at December 31.
Account payable= $4,690
Account receivable= $9,540
Cash= $25,390
Common stock= $91,900
Equipment= $51,400
Inventory= $33,100
Notes payable= $2,690
Retained earnings= $14,280
Wages payable= $5,870
The amount of current liabilities can be calculated by adding up the different debts incurred by the company
Account payable+Notes payable+ wages payable
= $4,690+$2,690+$5,870
= $13,250
Hence the amount of current liabilities recorded on the classified balance sheet is $13,250
n the kinked demand curve model, competitors: A. ignore any price change by a rival firm. B. ignore any price increase and match any price decrease by a rival firm. C. match any price increase and ignore any price decrease by a rival firm. D. follow any price change by a rival firm.
Answer:
B. ignore any price increase and match any price decrease by a rival firm.
Explanation:
The kinked demand curve model is used by economists to provide information about the monopolistic and oligopolistic market.
Under oligopoly, the kinked demand curve shows that price aren't flexible for a long period of time. The kindred demand curve is associated with a demand curve that isn't a straight line but has varying elasticity for both lower and higher prices in the economic market.
Hence, organizations operating in an oligopolistic market ensure their market shares are maintained and well protected. Thus, an oligopolist would lower it's selling price if its competitors in the market lower their selling price. However, he or she ignores any price increase by his or her competitors.
The kinked demand curve model helps them to understand how to protect and expand their market share.
Tiptop Flight School offers flying lessons at a small municipal airport. The school's owner and the manager have been attempting to evaluate performance and control costs using a variance report that compares the planning budget to actual results. A recent variance report appears below:
Tiptop Flight School
Variance Report
For the Month Ended July 31
Actual Results Planning Budget Variances
Lessons 155 150
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages 9,870 9,750 120 U
Aircraft depreciation 5,890 5,700 190 U
Fuel 2,750 2,250 500 U
Maintenance 2,450 2,330 120 U
Ground facility expenses 1,540 1,550 (10) F
Administration 3,320 3,390 (70) F
Total expense 25,820 24,970 850 U
Net operating income $8,080 $8,030 $50 F
After several months of using such variance reports, the owner has become frustrated. For example. she is quite confident that instructor wages were very tightly controlled in July. but the report shows an unfavorable variance. The planning budget was developed using the following formulas, where q is the number of lessons sold:
Cost Formulas
Revenue $220 q
Instructor wages $65 q
Aircraft depreciation $38 q
Fuel $15 q
Maintenance $530 + $12 q
Ground facility expenses $1,250 + $2 q
Administration $3,240 + $1 q
Required:
1. Should the owner feel frustrated with the variance reports? Explain.
2. Prepare a flexible budget performance report for the school for July.
3. Evaluate the school's performance for July.
Answer:
1. Should the owner feel frustrated with the variance reports?
Yes, because they were incomplete. Since the quantity of lessons is larger than the budgeted, you must prepare a flexible budget. The flexible budget shows that there exists a total unfavorable variance of $385. E.g. , regarding the pilots' salaries, there is a favorable variance in the flexible budget.
2. Prepare a flexible budget performance report for the school for July.
I used an excel spreadsheet to prepare a flexible budget and I attached it.
3. Evaluate the school's performance for July.
The school's performance is neither good or bad because it has higher revenues than estimated (even though it lowered its sales price), but their costs are also higher than budgeted. They are doing a good job at selling their lessons, but a bad job of keeping costs under control. The overall variance is not that significant, but it is still unfavorable. Their fuel expenses should be controlled since the largest unfavorable variance results from spending too much fuel.
Explanation:
Actual Planning Variances
Results Budget
Lessons 155 150 5 F
Revenue $33,900 $33,000 $900 F
Expenses:
Instructor wages $9,870 $9,750 $120 U Aircraft depreciation $5,890 $5,700 $190 U Fuel $2,750 $2,250 $500 U Maintenance $2,450 $2,330 $120 U Ground facility expenses $1,540 $1,550 ($10) F Administration $3,320 $3,390 ($70) F Total expense $25,820 $24,970 $850 UNet operating income $8,080 $8,030 $50 F
1. The school proprietor should not feel frustrated with the variance reports as they are meant to provide guidance and not a feeder for frustration. A careful review of the variance reports will help the owner to understand the cost dynamics for improvements.
2. The flexible budget performance report for the school in the month of July is as follows:
Tiptop Flight School
Flexible Budget Performance Report
For the Month Ended July 31
Actual Results Flexible Budget Variances
Lessons 155 155
Revenue $33,900 $34,100 $200 U
Expenses:
Instructor wages 9,870 10,075 205 F
Aircraft depreciation 5,890 5,890 0 None
Fuel 2,750 2,325 (425) U
Maintenance 2,450 2,390 (60) U
Ground facility expenses 1,540 1,560 20 F
Administration 3,320 3,395 75 F
Total expense 25,820 25,635 185 U
Net operating income $8,080 $8,465 $385 U
3. The school's performance in July is not encouraging based on the flexible budget. There may be the need for the owner to review the price per lesson upward, keeping customers' effective demand in mind.
Data and Calculations:
The actual number of lessons for July, q = 155
Flexing the Budget:
Revenue $220 q = $34,100
Instructor wages $65 q = $10,075
Aircraft depreciation $38 q = $5,890
Fuel $15 q = $2,325
Maintenance $530 + $12 q = $2,390
Ground facility expenses $1,250 + $2 q = $1,560
Administration $3,240 + $1 q = $3,395
Learn more: https://brainly.com/question/25301264
The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupon debt is $200 million. The volatility (σ) of Wilson Dover's total value is 0.60, and the risk-free rate is 5%. Assume that N(d1) = 0.9720 and N(d2) = 0.9050. Refer to the data for Wilson Dover Inc. What is the yield on Wilson Dover's debt?
Answer:
The yield on Wilson Dover's debt is 7.42%
Explanation:
In order to calculate the yield on Wilson Dover's debt we would have to calculate first the value of debt as follows:
value of debt=Total value*N(d1)-Debt*e∧-r fx period*N(d2)
value of debt=$500 million*0.9720-$200 million*2.7183∧-0.05*1*0.9050
value of debt=$486 million-$200 million*0.951229*0.9050
value of debt=$486 million-$172.1724 million
value of debt=$313.8276 million
=Total Value-Value of debt
=$186.17 million
The value of debt is $186.17 million
So, to calculate the yield we have to use the following formula:
Yield=(Face Value/current value)∧1/period-1
Yield=($200 million/$186.17 million)∧1-1
Yield=1.074286942-1
Yield=7.42%
The yield on Wilson Dover's debt is 7.42%
What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to arrive at your answer. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar, if necessary.
Answer:
$340,000
Explanation:
Statement of cash flow ( year-end December 31, 2012)
Operating activities Cashflow
Net Income = $5,000,000
Add back: Depreciation = $440,000
Net cashflow = $5,440,000
Investing activities Cashflow
Cash paid for machinery = ($5,400,000)
Net cashflow = ($5,400,000)
Financing activities Cashflow
Cash receipt from issuing long term debt =$1,000,000
Cash paid for dividends =(800,000)
Net cashflow =$200,000
Net increase = ($5,440,000-$5,400,000+$200,000)
Net increase in cash = $240,000
Opening balance as at 1 Jan 2012 =$100,000
Closing balance as at 31 Dec 2012 =($100,000+$240,000) = $340,000
Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize that within the last several quarters, they have been treating the performance metrics from the company's two very distinct divisions the same rather than focusing on the unique aspects of each division. They have inaccurately assessed divisional performance as a result. Alexander and Kristin realize they have fallen prey to a cognitive bias known as:_______
a. common measures bias
b. motivated reasoning
c. surrogation
d. uncommon measures bias
Answer:
The correct answer to the following question will be Option A (Common measures bias).
Explanation:
CMS occurs because once variations throughout order to respond have been triggered either by method rather than with the real propensities of the participants that only the equipment is trying to expose.It suggested a lack of desire on the part of the decision-maker to integrate specific knowledge because this knowledge provides additional cognitive effort. It's streamlined.The remaining three solutions are not relevant to the situation in question. So Choice A is the right one.
General Discussion Questions What should business leaders take away from this scandal? What could Wells Fargo have done differently to avert this cultural meltdown? Practice of Ethical Leadership Questions Modeling Character and Values: What values did Stumpf model to Wells Fargo employees? What impact might that have on the culture of Wells Fargo? Encouraging Ethical Conduct: What behaviors can leaders model in order to encourage ethical behavior in their organization? Designing Ethical Systems: Wells Fargo did have some systems in place, like the ethics hotline, to report unethical behavior, but it didn’t work. Why do you think that is? What steps can leaders take to design systems that encourage ethical behavior rather than unethical behavior?
Answer:
From this scandal, business leaders should learn to:
(a) not encourage unethical practices directly or indirectly among employees.
(b) not set unrealistic targets for employees to achieve within an unrealistic time-frame.
(c) Institute measures to prevent unethical practices.
(d) Encourage honest employees to grow in the company.
(e) Honor adherence to regulatory framework as applicable to the company.
Wells Fargo could have done differently in these manner:
(a) When the first incident of aggressive sales practice was reported in year 2004 with identified incidents from year 2002, they could have instituted measures to prevent recurrence of such incidents. Some of the practical and workable measures are enumerated in succeeding paragraphs.
(b) Convene a meeting of senior managers to provide them with appropriate guidelines so as not to repeat such incidents.
(c) Instruct senior managers to advise their juniors to refrain from any such aggressive sales practices.
(d) Investigate to determine the extent of impact of aggressive sales practices as on 2004 and take remedial actions against those who are engaged in such activities.
(e) Promote the whistle-blower method of instantaneous reporting of an incident by anyone who has witnessed such an incident.
(f) Reward employees having honesty, integrity and moral values.
Practice of Ethical Leadership Questions
CEO John Stumpf’s model was to aggressively cross-sell products by any means. While leading the bank in doing so, he had compromised on the minimum value system that any financial institution or any company must adhere to. The cultural impact that had on Wells Fargo is listed below:
(a) Employees were pressurized for resorting to unethical practices.
(b) Employees reporting matters on unethical practices were punished.
(c) The performance management/ measurement system, in effect, encouraged dishonesty in employees.
(d) The compensation system was skewed in favor of bonus.
(e) Since, the supervisors pressurized employees, the structural dishonesty within the organization was evident.
Leaders can encourage ethical behavior in their organization in the following manner:
(a) Demonstrate personal ethics in their words and actions.
(b) Instruct senior managers to strictly adhere to the ethical norms to be followed.
(c) Instruct senior managers to communicate company’s ethical agenda to the supervisors/ other junior employees within their departments/ sections.(d) Monitor adherence to / violation of ethical practices on a regular basis.(e) Institute immediate remedial measures to prevent recurrence of any unethical practice.
(f) Encourage employees to report incidents of unethical practices.
(g) Reward honest and hardworking employees.
Well Fargo’s system of ensuring Ethical System within the bank, such as ethics hotline to report unethical behavior did not work because, the top management, led by the CEO did not pay any importance to prevention of unethical practices. Rather, they steered in an organized and structured manner to promote unethical practices.
Leaders can take the following steps to design systems that encourage ethical behavior:
(a) The top leaders must “think ethics”, “speak ethics” and “act ethics”. This is the top most fundamental step in the direction of designing systems to encourage ethical behavior.
(b) Matters on “what is ethical and what is not ethical” must be circulated across the organization.
(c) Periodic briefing must take place from the top management to the junior most employees in a structured and organized manner.
(d) Encouragement on reporting (whistle-blowing) incidents of unethical practices must be given.
(e) System of rewarding honest and hardworking employees must be put in place.