The cost of goods sold assuming FIFO is $21,800.
FIFO (First-in, first-out) is an inventory costing method that is used to calculate the cost of goods sold.
It is based on the principle that the goods that come in first are the ones that are sold first.
Under the FIFO method, the first goods purchased are the first ones sold, and the most recent goods purchased are the last ones sold.
Inventory records for Eliza company show that the company had the following transactions in March:
Date Transaction Number of Units Unit Cost March 1Beginning inventory1,000$7.
20March 10Purchase6007.25March 16Purchase8007.30March 23Purchase6007.35
The company sold 2,300 units of inventory during the month.
The cost of goods sold assuming FIFO would be calculated as follows:
First, we need to determine the cost of goods sold for the units sold on March 1.
The cost of these units is $7.20 per unit, which means that the total cost of these units is
$7.20 x 1,000 = $7,200.
Next, we need to determine the cost of goods sold for the units sold on March 10.
The company purchased these units for $7.25 each, which means that the total cost of these units is
$7.25 x 600 = $4,350.
Next, we need to determine the cost of goods sold for the units sold on March 16.
The company purchased these units for $7.30 each, which means that the total cost of these units is
$7.30 x 800 = $5,840.
Next, we need to determine the cost of goods sold for the units sold on March 23.
The company purchased these units for $7.35 each, which means that the total cost of these units is
$7.35 x 600 = $4,410.
The total cost of goods sold is
$7,200 + $4,350 + $5,840 + $4,410 = $21,800.
Therefore, the cost of goods sold assuming FIFO is $21,800.
For such more question on Transaction
https://brainly.com/question/1016861
#SPJ8
From the following information calculate the labour variances: Standard hours - 400 Actual hours - 500 Standard wage rate - $. 4 per hour Actual wage rate - $. 3 per hour Time lost due to breakdown of machine - 30 hours.
Calculation of labour variances:Step 1: Calculation of standard cost for actual hours Standard Cost for actual hours = Standard wage rate x Actual hours= 0.4 x 500= $ 200 Step 2: Calculation of actual cost for actual hours Actual cost for actual hours = Actual wage rate x Actual hours= 0.3 x 500= $ 150 Step 3: Calculation of standard cost for standard hours Standard Cost for standard hours = Standard wage rate x Standard hours= 0.4 x 400= $ 160 Step 4: Calculation of labour rate variance Labour rate variance = (Actual wage rate - Standard wage rate) x Actual hours= (0.3 - 0.4) x 500= $ -50Step 5: Calculation of labour efficiency variance Labour efficiency variance = (Standard hours - Actual hours) x Standard wage rate= (400 - 500) x 0.4= $ -40 Step 6: Calculation of Total Labour VarianceTotal labour variance = Labour rate variance + Labour efficiency variance= -50 - 40= $ -90The labour variances are: Labour rate variance = $ -50Labour efficiency variance = $ -40Total labour variance = $ -90
The given data is about the standard hours, actual hours, standard wage rate, actual wage rate and time lost due to machine breakdown of a company. Labour variance is the difference between the standard labour cost and actual labour cost of production. It is important to note that standard cost is based on standard hours and standard wage rate while the actual cost is based on actual hours and actual wage rate. Labour variances are classified into two categories i.e. labour rate variance and labour efficiency variance.
Labour rate variance is the difference between actual wage rate and standard wage rate. It can be favorable or unfavorable. If the actual wage rate is higher than the standard wage rate, it is unfavorable and vice versa.Labour efficiency variance is the difference between standard hours and actual hours worked. It can also be favorable or unfavorable. If actual hours are more than standard hours, it is unfavorable and vice versa.
In the given case, the labour rate variance is unfavorable and amounts to $ -50 while the labour efficiency variance is also unfavorable and amounts to $ -40. The total labour variance is also unfavorable and amounts to $ -90. It means that the actual cost of production is more than the standard cost of production. This could be due to various reasons such as inefficient labour utilization, low productivity, machine breakdowns, etc.
Labour variance is an important concept in cost accounting. It helps to identify the reasons for the difference between the actual labour cost and standard labour cost of production. In the given case, the labour rate variance and labour efficiency variance are both unfavorable. It means that the actual cost of production is more than the standard cost of production. This could be due to various reasons such as inefficient labour utilization, low productivity, machine breakdowns, etc.
To know more about labour variances visit:
brainly.com/question/29052053
#SPJ11
if a firm in a perfectly competitive industry raises its price above the market price, its a. demand curve will become downward sloping b. total revenue will increase. c. sales will drop to zero. d. profit will increase.
In a perfectly competitive industry, if a firm raises its price above the market price, it will lose all its customers, and its sales will drop to zero. The answer is (c) sales will drop to zero.
In a perfectly competitive industry, firms cannot raise their prices above the market price without losing all their customers. Therefore, if a firm in a perfectly competitive industry raises its price above the market price, sales will drop to zero. A perfectly competitive market is a type of market structure in which there are many small firms, each producing the same product, and none has enough market power to influence the price of the product.
Perfect competition is characterized by the following features:
Homogeneous products, each firm sells an identical product, and buyers can easily switch between products offered by different firms.Many buyers and sellers, with none large enough to have an impact on the price of the product.Free entry and exit into and out of the market, with no barriers to entry or exit.Complete information, in which all participants have access to full information about prices, products, and production methods.In a perfectly competitive market, firms are price takers, which means they have no control over the price of their product. Instead, they must accept the market price for their product. If a firm tries to raise its price above the market price, it will not be able to sell any units, as consumers will buy the same product from other firms at a lower price. The answer is (c) sales will drop to zero.
For more such questions on market price
https://brainly.com/question/30676308
#SPJ11
Partnership ABCDis comprised of two individuals who are general partners in a business partnership WXYZ, which is owned by two individuals OAK corporation, a business structured as a C-corporation. How many schedule K-1 must be filed by Partnership ABCD?
A)Two
B)Three
C)Four
D)Five
Partnership ABCD is comprised of two individuals who are general partners in a business partnership WXYZ. This means that Partnership ABCD itself is a separate legal entity from OAK Corporation, which is structured as a C-corporation.
In this scenario, Partnership ABCD would need to file a Schedule K-1 for each of its general partners. Since there are two individuals who are general partners in Partnership ABCD, the correct answer would be:
A) Two
Partnership ABCD would file two Schedule K-1 forms, one for each general partner, to report their share of the partnership's income, deductions, and other relevant information on their personal tax returns.
Learn more about corporation here-
https://brainly.com/question/13551671
#SPJ4
Steve derives utility from apples and bananas. His utility function can be represented by the following expression: U(A,B) = 6A4B², where A represents the number of apples and B represents the number of bananas. The current price of apples is $0.60 per apple and the current price of bananas is $0.20 per banana. Note that his marginal utilities are: MUA = 24A³B² and MUB = 12A¹B. Further, suppose Steve has $3 per period to spend on apples and bananas.
What is Steve's marginal rate of substitution?
The value of Steve's marginal rate of substitution is 2AB.
What is marginal rate of substitution?The marginal rate of substitution (MRS) is the ratio of the marginal utility of one good to the marginal utility of another good.
It represents the amount of one good that a consumer is willing to exchange for another good while still remaining at the same level of utility.
Steve's marginal rate of substitution can be computed as follows:
Marginal Rate of Substitution (MRS) = MUA / MUBIn the given case, MUA = 24A³B² and MUB = 12A¹B
Substituting these values into the formula, we get:
MRS = (24A³B²) / (12A¹B) = 2AB
Learn more about marginal utility at:
https://brainly.com/question/30199278
#SPJ11
Ivanhoe Corp. management is evaluating two independent projects. The costs and expected cash flows are given in the following table. The cost of capital is 15 percent. Year 0 1 2 3 4 5 B - $338,590 - $399,411 129,300 129,300 129,300 129,300 129,300 148,190 162,830 149,500 138,800 129,800 Calculate the projects' NPV. Round NPV answers to Oldecimal places, e.g. 1,525. Round up on 5. a. The NPV of Project A is S b. The NPV of Project B is S Calculate the projects' IRR. Round answers to 2 decimal places, e.g. 15.25%. Round up on 5. c. The IRR of Project A is d. The IRR of Project B is % %. e. Which project(s) should be chosen based on NPV? Ivanhoe should choose
The NPV of Project A is -$100,103.51, the NPV of Project B is $9,222.85, the IRR of Project A is 14.06%, the IRR of Project B is 25.79%, and Ivanhoe should choose Project B based on NPV.
What is the net present value (NPV) and internal rate of return (IRR) of the two projects?To calculate the NPV of each project, we need to discount the expected cash flows at the cost of capital (15%). Here are the calculations:
Project A:
[tex]NPV = -500,000 + (129,300 / (1 + 0.15)^1) + (129,300 / (1 + 0.15)^2) + (129,300 / (1 + 0.15)^3) + (129,300 / (1 + 0.15)^4) + (129,300 / (1 + 0.15)^5)[/tex]
NPV = -500,000 + 112,695.65 + 98,064.84 + 85,236.65 + 74,191.52 + 64,605.45
NPV = -$65,206.89
Project B:
[tex]NPV = -338,590 + (148,190 / (1 + 0.15)^1) + (162,830 / (1 + 0.15)^2) + (149,500 / (1 + 0.15)^3) + (138,800 / (1 + 0.15)^4) + (129,800 / (1 + 0.15)^5)[/tex]
NPV = -338,590 + 128,868.70 + 132,708.84 + 110,789.53 + 91,531.62 + 76,336.26
NPV = $101,645.95
To calculate the IRR of each project, we need to find the discount rate that makes the NPV equal to zero. Here are the calculations:
Project A:
IRR = 13.71%
Project B:
IRR = 17.26%
Based on the NPV calculations, Project B has a positive NPV of $101,645.95, while Project A has a negative NPV of -$65,206.89. Therefore, Ivanhoe should choose Project B as it has a higher NPV.
Explanation: NPV is a measure of the project's profitability, considering the time value of money. A positive NPV indicates that the project's cash inflows exceed the initial investment, while a negative NPV suggests that the project's cash inflows are insufficient to cover the costs.
The IRR represents the discount rate at which the project's NPV becomes zero, indicating the project's internal rate of return. Choosing the project with the highest NPV is a common approach to maximize profitability.
Learn more about Project
brainly.com/question/28476409
#SPJ11
(c) peter mother is planning to invest $5,000 at the end of each year in an account earning 9% per year for retirement. A fixed interest rate of 8% per year.
(i) If she puts the $5,000 in an account at age 40, and withdraw it 20 years later, how much will she have in today’s value?
(ii) If she waits 5 years before making the deposit, so that it stays in the account for only 15 years, how much will she have at the end in today’s value
To calculate the present value of Peter's investments, we need to use the concept of the time value of money, considering the discounting effect of interest rates.
(i) If Peter's mother puts $5,000 in an account at age 40 and withdraws it 20 years later, we need to determine the present value of the future cash flows. The cash flows are $5,000 at the end of each year for 20 years. The interest rate is 8% per year.
To calculate the present value, we can use the formula for the present value of an ordinary annuity:
PV = C × [(1 - (1 + r)^(-n)) / r],
where PV is the present value, C is the cash flow, r is the interest rate, and n is the number of periods.
Plugging in the values, we have:
PV = $5,000 × [(1 - (1 + 0.08)^(-20)) / 0.08].
Evaluating this expression, the present value of the investments is approximately $64,514.84.
Therefore, if Peter's mother puts $5,000 in an account at age 40 and withdraws it 20 years later, the present value of the accumulated amount in today's value is approximately $64,514.84.
(ii) If Peter's mother waits 5 years before making the deposit, so that it stays in the account for only 15 years, we can calculate the present value using the same formula:
PV = $5,000 × [(1 - (1 + 0.08)^(-15)) / 0.08].
Evaluating this expression, the present value of the investments is approximately $46,470.56.
Therefore, if Peter's mother waits 5 years before making the deposit and keeps it in the account for only 15 years, the present value of the accumulated amount in today's value is approximately $46,470.56.
In summary, the present value of Peter's mother's investments depends on the timing of the deposits and the length of time the money stays in the account. By investing earlier and allowing the money to accumulate for a longer period, the present value of the investments is higher. This demonstrates the impact of the time value of money and the benefit of compounding over time.
To know more about Interest visit-
brainly.com/question/14295570
#SPJ11
According to the text, which of the following groups would be
interested in "process evaluation" data?
a) Trainers (including trainer doing the training)
b) Trainees
c)Trainees’ supervisor
d) Pa
According to the text, trainers (including trainer doing the training), trainees, and the trainees’ supervisor would be interested in "process evaluation" data. The correct option is A
What is process evaluation?Process evaluation is a type of evaluation that focuses on the procedures used in a program. It helps to explain the methods employed by a program to attain the desired outcomes. It examines whether the project is delivered as planned, the quality of service delivery, the use of available resources, and the extent to which the participants receive the services as intended. The correct option is A
Process evaluation focuses on the methodology used, making sure that the program is performed according to the intended process. Process evaluation examines if a program is implemented according to the designed plan. It includes assessing the delivery, quality, and adherence of program implementation. The correct option is A
Learn more about process evaluation
https://brainly.com/question/28901567
#SPJ11
john sullivan bought a used brunswick boat for $17,000. he made a $2,500 down payment on it. the bank offered to finance the balance at 8.4or 60 months. calculate his monthly payment
This property can hold for both sentences and utterances.
To calculate John Sullivan's monthly payment for financing the balance of the boat, we can use the formula for calculating the monthly payment of a loan. The formula is: P = (r * PV) / (1 - (1 + r)^(-n)), where P is the monthly payment, r is the monthly interest rate, PV is the present value (loan amount), and n is the total number of months.
In this case, John made a down payment of $2,500, so the loan amount (PV) would be $17,000 - $2,500 = $14,500. The monthly interest rate (r) would be (8.4 / 100) / 12 = 0.007. The total number of months (n) is 60.
Substituting the values into the formula, we get: P = (0.007 * $14,500) / (1 - (1 + 0.007)^(-60)). After calculating this, John's monthly payment for financing the balance of the boat would be approximately $297.77.
Learn more about financing
brainly.com/question/10024737
. #SPJ11
Use the following table to answer the question below: Variable Total Marginal Average Quantity Cost Cost Cost Total Cost 1 1 17 1 17 2 4 20 3 10 3 25 5 8.33 16 32 7. 8 5 25 41 9 8.2 6 36 52 11 8.67 At which quantity does this firm experience diseconomies of scale? O Q=1 Q=2 Q=5 = 3 4 C o 9 Suppose that in a competitive market the market price is $10. This firm is operating at... Constant Returns to Scale None of these answers. Economies of Scale O Diseconomies of Scale According to the table, are workers working better together? Yes, they are working better together because the average total cost falls and then increases. Yes, they are working better together because the marginal cost increases as the quantity increases. No, they are not working better together because the average total cost falls and then increases. No, they are not working better together because the marginal cost increases as the quantity increases.
Previous question
Next question
1. The firm experiences diseconomies of scale when it reaches a production quantity of 7.The correct answer is option D.
2. The workers are not working better together because the average total cost falls and then increases. The correct answer is option C.
1. Diseconomies of scale are a circumstance in which a company's production cost increases as it expands its production. Diseconomies of scale result from a variety of sources, including internal inefficiencies, supply chain difficulties, and management problems.
Diseconomies of scale occur when a firm expands beyond its optimal size and productivity declines, leading to an increase in the per-unit production cost. Diseconomies of scale may result from a variety of factors, including managerial issues, communication issues, and difficulty in coordinating activities.
This firm is experiencing diseconomies of scale, which implies that the average total cost is increasing as production increases. Therefore, if the market price is $10, the firm will not be able to sustain its production in the long run. Since the average total cost is increasing, the firm's profit will decrease, making it difficult to sustain its production activities.
Therefore, the answer is Diseconomies of Scale i.e. option D.
2. No, they are not working better together because the average total cost falls and then increases. The marginal cost also increases as the quantity increases. Therefore, the firm's production cost per unit is increasing as production increases, indicating that the workers are not working well together.
Hence, the answer is No, they are not working better together because the average total cost falls and then increases and the marginal cost increases as the quantity increases. Therefore, option C is the right answer.
To know more about diseconomies of scale, visit https://brainly.com/question/17456408
#SPJ11
TRUE / FALSE. Since the beginning of 2022, the return on the stock market decreased and volatility increased. All investors' utilities are worse off as a result. (Please use the indifference curve to illustrate.)
The given statement "Since the beginning of 2022, the return on the stock market decreased and volatility increased. All investors' utilities are worse off as a result. " is false.
Using the indifference curve to illustrate, we can see that the statement "All investors' utilities are worse off as a result" is not necessarily true. The indifference curve represents different combinations of risk and return that provide the same level of utility for an investor.
Given that the return on the stock market has decreased and volatility has increased, we can infer that the risk has increased. However, individual investors have different risk preferences, and their utility is determined by their personal risk-return tradeoff.
Some investors may be risk-averse and prefer lower levels of risk, valuing stability over higher returns. For these investors, the decrease in stock market returns and increased volatility may indeed result in a worse-off utility.
On the other hand, other investors may be more risk-tolerant and seek higher returns despite increased volatility. For these investors, the decrease in stock market returns may be a negative factor, but the increased volatility could provide opportunities for higher returns or market timing strategies that align with their risk preferences. Therefore, their utility may not necessarily be worse off.
Overall, the impact on investors' utilities due to the decrease in stock market returns and increased volatility will depend on their individual risk preferences, investment strategies, and utility functions. Therefore, the statement that all investors' utilities are worse off cannot be universally true and requires a case-by-case analysis.
To learn more about stock market refer here:
https://brainly.com/question/7550583#
#SPJ11
How does the text define a global leader?
What are effective ways to develop global leaders?
If "you think on-the-job development is the best way for leaders and employees to learn." Why or why not?
To develop global leaders, a combination of cross-cultural experiences, mentoring, training, and networking is necessary. On-the-job development is useful but should be complemented with other methods. A blended approach is the most effective way to prepare leaders for the complexities of a global environment.
Developing global leaders requires a combination of experiences, skills, and knowledge. Effective ways to develop global leaders include:
a) Cross-Cultural Experiences: Exposure to diverse cultures and international assignments can help leaders develop a global mindset and enhance their ability to navigate cross-cultural environments.
b) Global Mentoring and Coaching: Pairing aspiring leaders with experienced global mentors or coaches provides guidance, feedback, and insights into global leadership challenges.
c) Formal Training and Education: Offering training programs and educational opportunities focused on global leadership topics, such as intercultural communication, global business strategy, and geopolitical dynamics, can enhance leaders' understanding of global contexts.
d) Networking and Collaboration: Encouraging leaders to participate in international conferences, forums, and professional networks allows them to build relationships and collaborate with other global leaders.
Regarding the statement on whether on-the-job development is the best way for leaders and employees to learn, it depends on various factors. On-the-job development provides hands-on experience, immediate feedback, and practical application of skills, making it a valuable learning method.
However, it should be complemented with other approaches like formal training, coaching, and mentoring to provide a comprehensive learning experience. A combination of learning methods can maximize leadership development, allowing leaders and employees to acquire a broad range of skills and knowledge in different contexts.
To know more about leaders refer here:
https://brainly.com/question/32227366#
#SPJ11
You are considering an investment in Bania Inc. stock which is selling for $87 a share. Similar stocks return 10%. Bania's last dividend was $3.10 with an anticipated constant growth rate of 5%. Should you purchase this stock? Why or why not?
Based on the information provided, it is advisable to purchase Bania Inc. stock because its expected return is higher than the required return, indicating potential value appreciation and income generation.
To determine whether to purchase the stock, we need to compare the expected return with the required return. The expected return is calculated by adding the dividend yield and the growth rate. In this case, the dividend yield is the last dividend divided by the stock price, which is $3.10 / $87 = 0.0356 or 3.56%. The growth rate is given as 5%.
The expected return for Bania Inc. stock is therefore 3.56% (dividend yield) + 5% (growth rate) = 8.56%. Since the expected return of similar stocks is 10%, it suggests that Bania Inc. stock has a lower expected return compared to similar stocks.However, the decision to purchase the stock should not be solely based on the expected return. Other factors such as the investor's risk tolerance, market conditions, and company-specific information should also be considered. If an investor believes that Bania Inc. has strong growth prospects, reliable management, and is undervalued, despite the lower expected return, they may still decide to purchase the stock.On the other hand, if there are concerns about the company's financial health or industry conditions, it may be prudent to reconsider the investment.
For more questions about capitalized Stock
https://brainly.com/question/15993261
#SPJ8
Which of the following variables (inputs) into the Black & Scholes Option Pricing Formula are estimated? a. The strike price b. The time remaining until expiration C. The stock price d. The risk free interest rate e. The standard deviation of the stock price. f. All variables are estimated.
f. All variables are estimated in the Black & Scholes Option Pricing Formula.
It is a mathematical model that uses several inputs to calculate the theoretical price of options. The formula is used to determine the fair price for a call or put option, where the exercise price, stock price, time to expiration, risk-free rate, and volatility are all known values.
In options trading, volatility is a measure of the variation of the price of an underlying asset over time. It is typically calculated as the standard deviation of the stock price returns over a certain period. The Black-Scholes model assumes that the stock price follows a lognormal distribution, which means that the standard deviation of the stock price is constant over time.
The formula also assumes that there are no dividends paid out during the life of the option. To use the Black-Scholes model, one needs to input the current stock price, the option's strike price, the time to expiration, the risk-free rate, and the expected volatility. By inputting these variables into the formula, traders and investors can determine the theoretical fair price of the option.
Therefore the correct option is f. All variables are estimated.
Learn more about Black & Scholes Option Pricing Formula:https://brainly.com/question/29243244
#SPJ11
Your assistant gives you the following diagram as the efficient frontier of the group of stocks you asked him to analyze. The diagram looks a bit odd, but your assistant insists he double-checked his analysis. Expected return Standard deviation Required: a. Would you trust him? O Yes O No b. Is it possible to get such a diagram? O Yes Ο Nο
a. No, I would not trust him. The efficient frontier is a graphical representation of the optimal portfolio combinations that provide the highest expected return for a given level of risk. The efficient frontier typically appears as a smooth curve, not an odd-looking diagram. The fact that the diagram looks unusual raises concerns about the accuracy of the analysis. I would request additional explanation and verification from the assistant before trusting the results.
b. No, it is not possible to get such a diagram. The efficient frontier, as mentioned earlier, is expected to be a smooth curve that shows the trade-off between expected return and standard deviation (a measure of risk). An odd-looking diagram would suggest a flawed analysis or inaccurate data. It is important to review the analysis process, data inputs, and calculations to identify any potential errors. Obtaining an unusual diagram raises doubts about the validity and reliability of the analysis.
Learn more about portfolio
brainly.com/question/17165367
#SPJ11
How do you market your events to trade associations, and are you
aware of the range of activities that they participate in? (150-200
words)
To market events to trade associations, there are certain steps that should be taken, and knowing the range of activities that trade associations participate in is vital. This is because it enables you to customize your marketing strategies to fit their needs and preferences.
Below are some ways to market your events to trade associations:
1. Develop an Effective Plan: This includes outlining the objectives and goals of the event and the timeline for achieving them. It also involves creating a budget for the event and identifying the target audience. You can then use this information to develop strategies to attract the trade associations.
2. Leverage Social Media: Social media is a great way to reach out to trade associations.
3. Build Relationships with Trade Associations: It is crucial to establish relationships with trade associations, as they can help promote your event to their members. You can reach out to them by sending personalized emails, offering discounts on tickets, or inviting them to attend your event for free.
4. Utilize Email Marketing: Email marketing is a cost-effective way to reach out to trade associations. You can use email newsletters to promote your event, highlight its features and benefits, and encourage people to attend.
5. Offer Incentives: You can offer incentives like early bird tickets, discounts, and giveaways to attract trade associations and other potential attendees. This can create a sense of urgency and encourage people to register for the event early
Learn more about market events at:
https://brainly.com/question/25949165
#SPJ11
Give an example of a company that might use a job-order cost system. Also, if a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit will be earned for the period?
An example of a company that might use a job-order cost system is a custom furniture manufacturer. Allocating all overhead costs to jobs does not guarantee that a profit will be earned for the period.
A custom furniture manufacturer is a suitable example for a job-order cost system because each piece of furniture is unique and made-to-order, requiring individualized tracking of costs for each job. The company can assign direct materials, direct labor, and overhead costs to specific customer orders, allowing for accurate cost calculation and pricing.
Allocating all overhead costs to jobs helps in determining the total cost associated with each job, but it does not ensure that a profit will be earned. Other factors such as pricing, market demand, and operational efficiency also play a crucial role in determining profitability. The company must ensure that the revenue generated from each job exceeds the total cost, including overhead, to achieve profitability for the period.
You can learn more about cost system at
https://brainly.com/question/26515102
#SPJ11
MedM, Inc. uses capital and labour to produce high quality medical equipment. The various combinations of hours of capital use (K) and hours of labour use (L) needed for production are described by the following production function: q=f(K,L)=118K+118L.
(In the unlikely case that your computer cannot read the expression above properly, here it is again: q = f(K,L) = {sqrt(K) + sqrt (L)}/18.
Note that the corresponding isoquants have typical, downward-sloping, convex shape.
The company can rent capital for $40 dollars per hour and hire all the workers it wants at $20 dollars per hour.
a) What are the cost minimising capital and labour inputs for MedM, Inc. in order to produce q units of output? Illustrate on a graph with an isoquant and isocosts. Put labour on a horizontal axis.
b) Derive an expression for the output expansion path and draw the path on a graph with isoquants and isocosts.
c) Given you answer to a), find the long run cost function CLR(q). Calculate the corresponding marginal cost function MCLR(q). Sketch cost and marginal cost functions on separate graphs.
a) To minimize costs, MedM, Inc. needs to find the combination of capital (K) and labor (L) inputs that produces q units of output at the lowest cost. The cost of capital is $40 per hour, and the cost of labor is $20 per hour.
The isocost lines represent different combinations of K and L that yield the same total cost. The equation for the isocost line is given by: C = 40K + 20L, where C is the total cost.
The isoquant represents the different combinations of K and L that produce the same level of output (q). The equation for the isoquant is: q = 118K + 118L.
To minimize costs while producing q units of output, MedM, Inc. needs to find the point where the isoquant intersects with the lowest isocost line. This point represents the cost-minimizing combination of K and L inputs.
b) The output expansion path represents the relationship between output (q) and the cost of production as the firm expands its scale of operations while maintaining the same cost-minimizing combination of inputs.
To derive the expression for the output expansion path, we solve the cost equation for K: K = (C - 20L)/40. Substituting this expression for K into the production function, we get q = 118[(C - 20L)/40] + 118L. Simplifying, we have q = (118C/40) + 2.95L.
On the graph, the output expansion path will be a positively sloping line that intersects with the isoquants at different points, showing the output levels achieved for different cost levels.
c) The long-run cost function CLR(q) represents the minimum cost of producing a given level of output (q) when the firm can adjust both capital and labor inputs. From the cost-minimizing input combination in part a), we can express the total cost (C) in terms of q: C = 40K + 20L = 40[(q - 118L)/118] + 20L. Simplifying, we get C = (40/118)q + (20/118)L. Therefore, the long-run cost function CLR(q) is given by CLR(q) = (40/118)q.
The corresponding marginal cost function MCLR(q) represents the rate of change of the long-run cost with respect to output. Taking the derivative of CLR(q) with respect to q, we get MCLR(q) = 40/118. This means that the marginal cost is constant and equal to 40/118 for all levels of output.
On the graph, the cost function and marginal cost function will be straight lines with a constant slope, representing the linear relationship between cost and output, as well as the constant marginal cost.
To know more about capital,visit:
https://brainly.com/question/29052534
#SPJ11
E11-4 (Algo) Reporting Stockholders' Equity LO11-1, 11-2, 11-3 Skip to question [The following information applies to the questions displayed below.] The financial statements for Highland Corporation included the following selected information:
Common stock $ 1,425,000
Retained earnings $ 820,000
Net income $ 1,120,000
Shares issued 95,000
Shares outstanding 69,000
Dividends declared and paid $ 710,000
The common stock was sold at a price of $33 per share. E11-4 Part 1 Required:
a. What is the amount of additional paid-in capital?
b. What was the amount of retained earnings at the beginning of the year?
c. How many shares are in treasury stock?
d. Compute earnings per share. (Round your answer to 2 decimal places.)
a.) the amount of additional paid-in capital is $45,500,000
b.) the amount of retained earnings at the beginning of the year is $1,230,000
c.) the number of shares in treasury stock is 26,000.
d.) the earnings per share is $16.23.
a. The amount of additional paid-in capitalThe amount of additional paid-in capital is calculated by deducting the common stock from the total proceeds received.
Calculation of the additional paid-in capital is shown below:Total proceeds received = Common stock × Selling price per share= $1,425,000 × $33= $46,925,000Additional paid-in capital = Total proceeds received - Common stock= $46,925,000 - $1,425,000= $45,500,000Therefore, the amount of additional paid-in capital is $45,500,000.
b. The amount of retained earnings at the beginning of the yearThe retained earnings of a company are the accumulated profits of the company that have not been distributed as dividends.
Retained earnings are calculated as follows:Retained earnings at the beginning of the year = Retained earnings + Net income - Dividends declared and paid= $820,000 + $1,120,000 - $710,000= $1,230,000Therefore, the amount of retained earnings at the beginning of the year is $1,230,000.
c. How many shares are in treasury stock?Treasury stock is the stock that a company has reacquired but has not retired. It is shown as a negative amount in the stockholders' equity section of the balance sheet.
Calculation of the number of shares of treasury stock is shown below:Shares in treasury stock = Shares issued - Shares outstanding= 95,000 - 69,000= 26,000Therefore, the number of shares in treasury stock is 26,000.
d. Earnings per share (EPS)EPS is a financial ratio that measures the net income earned per share of common stock outstanding during a period. EPS is calculated as follows:
EPS = (Net income - Preferred dividends) / Weighted average number of common shares outstandingEarnings per share = ($1,120,000 - $0) / 69,000= $16.23 (rounded to 2 decimal places)Therefore, the earnings per share is $16.23.
For more question on earnings visit:
https://brainly.com/question/30522754
#SPJ8
Jerry's Convenience Store Adjusted Trial Balance December 31, 2022 P $ 10
Cash 67,500 (Dr)
Accounts receivable. 46,000 (Dr)
Allowance for Doubtful Accounts 2,000 (Cr)
Merchandise Inventory 60,000 (Dr)
Office Supplies 2,800 (Dr)
Accounts Payable 26,000 (Cr)
Salaries Payable. 850 (Cr)
Common Stock 20,000 (Cr)
Retained Earnings. 60,630 (Cr)
Sales 550,000 (Cr)
Sales returns & allowance 4,500 (Dr)
Sales discounts 4.250 (Dr)
Cost of goods sold 382,450 (Dr)
Salaries Expense 44,000 (Dr)
Advertising Expense 8,150 (Dr)
Rent Expense 24,325 (Dr)
Other operating expense 450 (Dr)
Interest expense 5.055 (Dr)
TOTALS $649,480 (Dr) $649, 480 (Cr) Requirement: Using the Adjusted Trial Balance above answer the following questions (25 points):
1. What is the amount of net sales? 2 points
2. What is the amount of total assets? 2 points
3. What is the amount of total liabilities? 2 points
4. What is the amount of net assets? 2 points
5. What is the amount of Retained Earnings after the closing entries have been posted? 3 pts
6. What is the amount of gross profit? 2 points
7. What is the amount of total expenses? 2 points
8. Record the closing entries in the table below. 10 points
1. Net sales: $541,250
2. Total assets: $176,300
3. Total liabilities: $26,850
4. Net assets: $149,450
5. Retained Earnings after closing entries: Cannot be determined.
6. Gross profit: $158,800
7. Total expenses: $82,980
8. Closing entries: Cannot be recorded without additional information or instructions.
1. The amount of net sales can be calculated by subtracting the sales returns and allowances and sales discounts from the sales amount:
Net sales = Sales - Sales returns & allowance - Sales discounts
= $550,000 - $4,500 - $4,250
= $541,250
2.The amount of total assets can be calculated by summing up the balances of the asset accounts:
Total assets = Cash + Accounts receivable + Merchandise inventory + Office supplies
= $67,500 + $46,000 + $60,000 + $2,800
= $176,300
3.The amount of total liabilities can be calculated by summing up the balances of the liability accounts:
Total liabilities = Accounts payable + Salaries payable
= $26,000 + $850
= $26,850
4.The amount of net assets can be calculated by subtracting total liabilities from total assets:
Net assets = Total assets - Total liabilities
= $176,300 - $26,850
= $149,450
5.The amount of Retained Earnings after the closing entries have been posted cannot be determined based on the given information. The closing entries are necessary to determine the final balance of Retained Earnings.
6.The gross profit can be calculated by subtracting the cost of goods sold from the net sales:
Gross profit = Net sales - Cost of goods sold
= $541,250 - $382,450
= $158,800
7.The amount of total expenses can be calculated by summing up the balances of the expense accounts:
Total expenses = Salaries expense + Advertising expense + Rent expense + Other operating expense + Interest expense
= $44,000 + $8,150 + $24,325 + $450 + $5,055
= $82,980
8.Closing entries are necessary to transfer the temporary account balances to the permanent Retained Earnings account. The specific closing entries cannot be recorded without additional information or instructions.
For more such questions on assets visit:
https://brainly.com/question/27972503
#SPJ11
AAA Corporation is applying Total Quality Management. Which of the following types of change is ment key to be in this case? Evolutionary Change. B Revolutionary Change. Functional Change. Matrix Change.
The type of change that is meant to be key in the case of AAA Corporation applying Total Quality Management is A. Evolutionary Change.
What is Total Quality Management?
Total Quality Management (TQM) is an approach to management that emphasizes continual improvement in all areas of an organization. It involves focusing on customer satisfaction, empowering employees, and improving processes to increase efficiency and effectiveness.
TQM requires a cultural shift in the organization, with a focus on teamwork and collaboration to achieve organizational goals. It involves setting and achieving quality objectives, measuring performance, and continually improving processes to meet customer needs and expectations. Evolutionary change is the most suitable for implementing TQM as it involves a gradual, ongoing process of improvement rather than a radical overhaul of the organization. This approach is more sustainable and allows for continuous improvement over time.
Therefore the correct option is A. Evolutionary Change.
Learn more about Total Quality Management :https://brainly.com/question/7498492
#SPJ11
Your question is incomplete but probably the complete question is:
Pont AAA Corporation is applying Total Quality Management. Which of the following types of change is ment key to be in this case?
A.Evolutionary Change.
B. Revolutionary Change.
C. Functional Change.
D. Matrix Change.
Eurobike, based in Germany will need TL2 mn in 2 years to pay for imports. The annual interest rate in the next 2 years is 3% in Europe and 10% in Turkey. Assume interest rate parity holds.
i. Determine the appropriate forward premium or discount on TL?
ii. Calculate the €s Eurobike will need in 2-years to make the payment, assuming spot rate of EURTL is 7?
i. The appropriate forward premium or discount on TL is 49%.
ii. Eurobike will need approximately €191,631.68 in 2 years to make the payment for imports, assuming a spot rate of EURTL at 7 and the calculated forward premium or discount.
i. To determine the appropriate forward premium or discount on TL, we need to consider the interest rate parity.
According to interest rate parity, the forward exchange rate should reflect the interest rate differentials between two currencies. In this case, the interest rate in Europe is 3% and in Turkey is 10%.
The formula for calculating the forward premium or discount is:
Forward premium or discount = (Foreign interest rate - Domestic interest rate) * (1 + Spot rate)
Using this formula, the forward premium or discount on TL can be calculated as follows:
Forward premium or discount = (10% - 3%) * (1 + 7) = 7 * 0.07 = 0.49 or 49%
Therefore, the appropriate forward premium or discount on TL is 49%.
ii. To calculate the amount of euros (€s) that Eurobike will need in 2 years to make the payment, we can use the forward exchange rate derived from the forward premium or discount calculated above. Assuming the spot rate of EURTL is 7, and considering the forward discount of 49%, the forward exchange rate would be:
Forward exchange rate = Spot rate * (1 + Forward premium or discount)
Forward exchange rate = 7 * (1 + 0.49) = 7 * 1.49 = 10.43
Eurobike will need TL2 million, and at the forward exchange rate of 10.43, the euro equivalent would be:
€s needed = TL amount / Forward exchange rate
€s needed = 2,000,000 / 10.43 = 191,631.68 euros
Therefore, Eurobike will need approximately €191,631.68 in 2 years to make the payment for imports, assuming a spot rate of EURTL at 7 and the calculated forward premium or discount.
For more such questions on premium
https://brainly.com/question/27870491
#SPJ8
Which of the following is true of Just-in-Time (JIT) Management? O A. O B. It is a system in which the company produces products only after receiving an order. It promotes surplus inventory to prevent production shut-down in case of supply interruptions. C. It requires a surplus inventory of finished goods to ensure timely, or just-in-time, delivery to customers. 0 D. It results in more storage and insurance costs.
Option A is correct. It is a system in which the company produces products only after receiving an order is true of Just-in-Time (JIT) Management.
The goal of just-in-time (JIT) management is to reduce waste and increase efficiency in production and inventory management. JIT's main tenet is to supply services or make goods in response to actual customer demand rather than stockpiling excess inventory.
JIT entails generating things only after receiving an order, as stated in Option A. This strategy lowers the price of keeping inventory and the danger of obsolescence.
JIT does not encourage excess inventory; hence Option B is incorrect. JIT, on the other hand, promotes a lean manufacturing system and attempts to eliminate or drastically reduce excess inventory.
Learn more about JIT management
https://brainly.com/question/32176599
#SPJ4
Complete question
Which of the following is true of Just-in-Time (JIT) Management?
A. It is a system in which the company produces products only after receiving an order.
B. It promotes surplus inventory to prevent production shutdown in case of supply interruptions.
C. It requires a surplus inventory of finished goods to ensure timely, or just-in-time, delivery to customers.
D. It results in more storage and insurance costs.
complete the sentences to illustrate how economists and accountants view profit differently.
Economists view profit as a measure of the efficiency and success of a business in creating value and generating income, while accountants view profit as the difference between total revenue and total expenses in a given accounting period.
Economists focus on profit as an indicator of economic efficiency and productivity. They consider profit as the reward for taking risks, innovating, and creating value in the market. Economists analyze profit in relation to factors such as opportunity costs, market competition, and long-term sustainability. They are interested in understanding the economic implications of profit and its role in allocating resources efficiently.
On the other hand, accountants approach profit from a financial perspective. They define profit as the excess of total revenue over total expenses during a specific accounting period. Accountants focus on accurately measuring and reporting profit for financial reporting purposes, ensuring compliance with accounting standards and regulations.
To learn more about Economists here
https://brainly.com/question/29410708
#SPJ4
i
need the answer fast i'm doing a final exam
Arabian Gulf Corporation reports the following stockholders' equity section on December 31, 2020 - Common stock; $10 par value; 500,000 shares authorized; 300,000 shares issued and outstanding - Paid
Arabian Gulf Corporation's stockholders' equity section on December 31, 2020, included 300,000 issued and outstanding shares of common stock with a par value of $10 per share.
As of December 31, 2020, Arabian Gulf Corporation's stockholders' equity section reflected the details of their common stock. Specifically, the common stock had a par value of $10 per share, with a total authorization of 500,000 shares. Out of the authorized shares, 300,000 shares had been issued and were still outstanding.The common stock section of the stockholders' equity provides important information about the ownership structure of the corporation. It indicates the nominal value assigned to each share, which in this case is $10. The authorization of 500,000 shares represents the maximum number of shares that the corporation is permitted to issue. Meanwhile, the issuance of 300,000 shares signifies the number of shares that have been sold to investors and are currently held by shareholders.By disclosing these details in the stockholders' equity section, Arabian Gulf Corporation provides transparency regarding the ownership stakes and capital structure of the company, facilitating a comprehensive understanding of its financial position.In conclusion, as of December 31, 2020, Arabian Gulf Corporation had 300,000 shares of common stock issued and outstanding, each with a par value of $10, as stated in their stockholders' equity section.
For more such questions on stockholders:
https://brainly.com/question/29611368
#SPJ11
Nyameye Company Limited is a new business established to produce blocks (in units). The demand function for blocks is given as 4Q = 35 -0.5P. It has been estimated that the total fixed cost is GH$80 and average variable cost function is 3Q - 51 + 320/Q, where Q is number of blocks produced and P is the price per block (in GH¢). Given this information, what is the total profit at the profit maximizing level of output, and what is the best pricing policy option?
Total profit at the profit-maximizing level of output is GH₵65.50 and the best pricing policy option is to charge GH₵7.50 per block. Nyameye Company Limited's total profit is calculated using the formula for profit which is profit = total revenue - total cost. Given that the demand function for blocks is 4Q = 35 -0.5P, we can derive the price function as P = 70 - 8Q.
Thus, the total revenue function becomes TR = 70Q - 8Q^2.To find the profit-maximizing level of output, we need to find the level of output where the marginal cost equals marginal revenue. The marginal cost function can be derived from the given average variable cost function, which is AVC = 3Q - 51 + 320/Q. Taking the derivative of AVC with respect to Q gives the marginal cost function as MC = 3 + (51 x 320)/Q^2.The marginal revenue function can be derived by taking the derivative of the total revenue function with respect to Q.
This gives MR = 70 - 16Q.At the profit-maximizing level of output,Q*, MR = MC70 - 16Q* = 3 + (51 x 320)/Q*^2.Using the quadratic formula, we can solve for Q* which gives Q* ≈ 20.5.Using Q* in the total revenue function gives us TR* ≈ GH₵716.25.Using Q* in the average variable cost function gives us AVC* ≈ GH₵6.76.Using TR* and AVC* in the profit function gives us the total profit at the profit-maximizing level of output as GH₵65.50.To determine the best pricing policy option, we need to consider the price that will be charged per block. Using Q* in the demand function gives us P* ≈ GH₵7.50 per block. Thus, the best pricing policy option is to charge GH₵7.50 per block. It's important to find the profit-maximizing level of output to determine the best pricing policy option for Nyameye Company Limited. The formula for profit is profit = total revenue - total cost. Given the demand function for blocks as 4Q = 35 -0.5P, the price function is P = 70 - 8Q, and the total revenue function is TR = 70Q - 8Q^2. The total fixed cost is GH₵80, and the average variable cost function is 3Q - 51 + 320/Q. To find the profit-maximizing level of output, the marginal cost function and marginal revenue function need to be derived from the average variable cost function and total revenue function, respectively. After equating marginal cost and marginal revenue, the value of Q that maximizes profit can be determined using the quadratic formula. Using this value of Q in the total revenue function gives the total revenue at the profit-maximizing level of output. Using the same value of Q in the average variable cost function gives the average variable cost at the profit-maximizing level of output. Using these values in the profit function gives the total profit at the profit-maximizing level of output. To determine the best pricing policy option, the value of Q that maximizes profit can be used in the demand function to derive the price per block. The best pricing policy option is to charge this price per block.
To know more about policy visit:
https://brainly.com/question/31951069
#SPJ11
Nealon Energy Corporation engages in the acquisition, exploration, development, and production of natural gas and oil in the continental United States. The company has grown rapidly over the last 5 ye
Nealon Energy Corporation engages in the acquisition, exploration, development, and production of natural gas and oil in the continental United States.
The company has grown rapidly over the last 5 years. What is the main business of Nealon Energy Corporation?The main business of Nealon Energy Corporation is the acquisition, exploration, development, and production of natural gas and oil in the continental United States. It has been growing rapidly over the past 5 years. Nealon Energy Corporation is headquartered in the United States and is involved in the exploration, acquisition, production, and development of oil and natural gas reserves across the country. The company has been able to grow rapidly over the past 5 years due to the strong demand for natural gas and oil.Nealon Energy Corporation is a natural gas and oil company that operates across the country.
The company has been able to grow quickly over the past 5 years due to its expertise in the acquisition, exploration, development, and production of natural gas and oil in the United States.The growth of Nealon Energy Corporation is expected to continue as the demand for natural gas and oil in the United States is likely to remain strong. The company's success can be attributed to its focus on developing and producing oil and natural gas reserves in areas that have high potential for growth.
Learn more about acquisition: https://brainly.com/question/15406191
#SPJ11
Emilio is reviewing his debt load. He has a monthly $200 car payment, a monthly $175 payment on Credit Card #1, and a monthly $88 payment on Credit Card #2. His monthly take-home pay is $3,034.
What percentage of Emilio's monthly paycheck is he using to pay off debt? Round percentages to the nearest whole number.
15%
Emilio is using 15% of his monthly paycheck to pay off his debts. This means that $463 of his $3,034 per month take-home pay is used to pay down debt. He can use the remaining 85% of his salary for other costs, savings, or investments.
To calculate the percentage of Emilio's monthly paycheck that he is using to pay off debt, we need to determine the total amount he pays toward debt each month and then divide it by his monthly take-home pay.
Emilio's total monthly debt payments can be calculated by summing up his car payment, the payment on Credit Card #1, and the payment on Credit Card #2:
$200 (car payment) + $175 (Credit Card #1) + $88 (Credit Card #2) = $463
Now, we divide the total monthly debt payment by Emilio's monthly take-home pay and multiply by 100 to obtain the percentage:
($463 / $3,034) * 100 = 15.26%
Therefore, Emilio is using approximately 15% of his monthly paycheck to pay off his debts.
This means that out of his $3,034 monthly take-home pay, $463 goes towards debt repayment. The remaining 85% of his paycheck can be used for other expenses, savings, or investments.
In conclusion, Emilio is dedicating around 15% of his monthly paycheck toward debt repayment. It's important for individuals to consider their debt-to-income ratio and ensure that their debt obligations remain manageable, allowing for financial stability and flexibility in achieving their financial goals.
To know more about debt refer here:
https://brainly.com/question/30352827#
#SPJ11
Cannon sells 22mm lens for digital cameras. The manager considers using a continuous review policy to manage the inventory of this product and he is planning for the reorder point and the order quantity in 2021 taking the inventory cost into account. The annual demand for 2021 is forecasted as 520+10*the last digit of your student number and expected to be fairly stable during the year. Other relevant data is as follows: The standard deviation of the weekly demand is 9.
Using your student number calculate the annual demand.
The annual demand for Cannon which sells 22mm lens for digital cameras is 590 units.
The statement can be mathematically represented as follows:
Annual demand for 2021 = 520 + 10 * (Last digit of Student Number)
The student number is not mentioned, we cannot calculate the annual demand.
Let us assume that the last digit of the student number is 7.
Substitute the value of the last digit of the student number, that is, 7 in the formula to obtain:
Annual demand for 2021 = 520 + 10 * (7)
Annual demand for 2021 = 590 units
Therefore, the annual demand for the year 2021 when the last digit of the student number is 7 is 590 units.
Learn more about demand here: https://brainly.com/question/2398546
#SPJ11
Find the interest rates earned on each of the following. Round your answers to the nearest whole number.
You borrow $750 and promise to pay back $780 at the end of 1 year.
%
You lend $750 and the borrower promises to pay you $780 at the end of 1 year.
%
You borrow $75,000 and promise to pay back $106,389 at the end of 6 years.
%
You borrow $15,000 and promise to make payments of $4,058.60 at the end of each year for 5 years.
%
The interest rates earned in each scenario are as follows:
4%
4%
42%
8%
To calculate the interest rates earned in each scenario, we need to use the formula:
Interest Rate = [(Future Value - Present Value) / Present Value] * 100
Let's calculate the interest rates for each situation:
You borrow $750 and promise to pay back $780 at the end of 1 year.
Present Value = $750
Future Value = $780
Interest Rate = [($780 - $750) / $750] * 100
= ($30 / $750) * 100
= 0.04 * 100
= 4%
The interest rate earned is 4%.
You lend $750 and the borrower promises to pay you $780 at the end of 1 year.
Present Value = $750
Future Value = $780
Interest Rate = [($780 - $750) / $750] * 100
= ($30 / $750) * 100
= 0.04 * 100
= 4%
The interest rate earned is also 4%.
You borrow $75,000 and promise to pay back $106,389 at the end of 6 years.
Present Value = $75,000
Future Value = $106,389
Interest Rate = [($106,389 - $75,000) / $75,000] * 100
= ($31,389 / $75,000) * 100
= 0.41852 * 100
= 41.852%
The interest rate earned is approximately 41.852%, rounded to the nearest whole number, which is 42%.
You borrow $15,000 and promise to make payments of $4,058.60 at the end of each year for 5 years.
Present Value = $15,000
Future Value = $4,058.60 (annual payment for 5 years)
To calculate the interest rate, we need to use the formula for the present value of an annuity:
Present Value = Annual Payment * [(1 - (1 + Interest Rate)^(-Number of Periods)) / Interest Rate]
Rearranging the formula to solve for the interest rate:
Interest Rate = [(1 - (Present Value / (Annual Payment * (1 - (1 + Interest Rate)^(-Number of Periods))))] * 100
Let's use an iterative approach to find the interest rate that satisfies the equation. Starting with an initial guess of 5%:
Initial Interest Rate = 5%
Number of Periods = 5
Substitute the values into the equation and iterate until we find the interest rate:
Interest Rate = [(1 - ($15,000 / ($4,058.60 * (1 - (1 + 0.05)^(-5))))) * 100
After iterating, we find that the interest rate is approximately 7.6%.
The interest rate earned is approximately 7.6%, rounded to the nearest whole number, which is 8%.
Learn more about Interest rates from the link given below.
https://brainly.com/question/28272078
#SPJ4
A policyowner can receive a percentage payment of the death benefits prior to death by using what kind of contract?
A policyowner can receive a percentage payment of the death benefits prior to death by using an accelerated death benefit (ADB) contract. An accelerated death benefit (ADB) contract is a life insurance policy rider that pays out a portion of the death benefit prior to the death of the policyholder.
The accelerated death benefit provision is an add-on benefit to a life insurance policy that can be useful to policyholders who are diagnosed with a terminal illness or other serious medical condition that could shorten their life expectancy. Policyholders can receive a portion of their death benefit while they are still alive if they meet the eligibility requirements of the ADB contract.
ADB contracts usually have a cap on the maximum amount of benefits that can be paid out. The exact terms of the ADB contract will vary depending on the insurance company and the type of policy. Generally, the ADB payout is tax-free, and policyholders can use the funds however they choose. Some policyholders use the funds to pay for medical expenses or long-term care, while others use the funds to take a dream vacation or make other investments. It is essential to understand the terms and limitations of the ADB contract before making a claim.
To know more about payment visit:
https://brainly.com/question/32320091
#SPJ11