Answer:
$5800
Explanation:
The income that would be earned if the summer courses were not taken is $5000 while we spend only $100 on food.
Besides, by taking the summer courses costs to be incurred is computed thus:
costs of summer courses=$1,200+$400+$300=$1900
By taking the summer courses one would earn $1000
In short, the opportunity of taking the summer courses is the earnings of -$5000 forgone plus the cost of $100 saved, plus the $1000 earned minus the $1900 spent on summer courses
i.e -$5000+$100+$1000-$1900=-$5800
A group of investors are discussing the formation of a new property and liability insurer. The proposed com-pany would market a new homeowners policy that combines traditional homeowner coverages with unem-ployment benefits if the policyholder becomes involun-tarily unemployed. Each investor would contribute at least $100,000 and would receive a proportionate interest in the company. In addition, the company would raise additional capital by selling ownership rights to other investors. Management wants to avoid the expense of hiring and training agents to sell the new policy and wants to sell the insurance directly to the public by selective advertising in personal finance magazines.
A. Identify the type of insurance company that best fits the above description.
B. Identify the marketing system that management is considering adopting.
Answer:
A. Stock insurance company
B. Direct response system marketing strategy
Explanation:
A. A stock insurance company has the stock holders or owners as investors and not policyholders. Profit is made when the stock increases in value over time. In this given question raising additional capital only happens In a stock insurance company.
B. Because the management do not want hiring of agents and personalized selling, they can do this through direct response system marketing strategy. This policy is sold directly to customers through various system such as telemarketing or through the media
Identify the two basic categories of items on an income statement.
Answer:
RevenueExpensesExplanation:
The Income statement is used to check the financial performance of a company within a period by calculating the net income or losses made.
It does so by subtracting the expenses incurred from the revenue realized. These two categories are therefore the most basic items in the income statement and will always appear in them.
Examples of Revenue sources include; Sales and Service Revenues.
Examples of Expenses include; Advertising, Salaries and Depreciation.
Analyse two ways in which employee innovation andcreativity can be developed.
Answer:
° Ask for ideas from employees
° Provide guidance to employees
Explanation:
° Ask for ideas from employees. For an organization that wants to develop innovation and creativity of its employees, such must come up with an avenue for employees to express their ideas and then create a process internally for submission. The management may allocate time frame for such idea generation and submission; while also supporting it with incentive so that people can think beyond the norm.
° Provide guidance to employee. Generally, virtually everyone can develop an idea, however, the skills needed to making it come to reality is not common to most people. In terms of providing guidance, an innovation and creativity champion could be appointed, who will give support, encouragement, advise and directions to other employees who have developed certain ideas. The aim here is not just to develop an idea, but getting support with the right skills to getting the ideas materialized.
The financial crisis of 2008 demonstrated the flaw in a bottom-up detailed approach to calculating risk. There are
too many individual judgments that can be biased. Banks and bank regulators instead use a rule of thumb that
bank capital should be 8-10 percent of the balance sheet. That is, managers rely on
A) a heuristic
B) rational decision making
C) intuitive decision making
Answer:
B
Explanation:
Answer: it’s A
Explanation:
The primary goal of a financial manager of a corporation is:______.
a. maximize market share.
b. maximize the owner's wealth.
c. increase sales and profit.
d. have healthy cash flow.
Answer:
B
Explanation:
For each of the pairs below, determine whether they are positively correlated, negatively correlated, or uncorrelated.
A. Time spent studying and test scores: Positively correlated.
B. Vaccination and illness: Negatively correlated.
C. Soft drink preference and music preference:Uncorrelated.
D. Income and education: Positively correlated.
Answer and Explanation:
In case when there is an existence of the mutual relationship lies between the two variables so it can be said it is a correlation. In case when one variable rises, and the other is also rises so it is positive and in the case when one variable rises, and the other is fall so it is negative
Now the classification is as follows
a. Spent more time that results in more marks so positive correlation
b. In case when the vaccination rises, the illness decreased so negative correlation
c. No relation lies between the soft drink and the music paid so no correlation
d. Increase in education results more income so positive correlation
Here are simplified financial statements for Watervan Corporation. INCOME STATEMENT (Figures in $millions)Net sales $881Cost of goods sold 741Depreciation 31Earnings before interest and taxes (EBIT) $109Interest before tax $97Taxes 34Net income $63 BALANCE SHEET (Figures in $millions) End of Year Start of YearAssetsCurrent assets $369 $312Long-term assets 258 222Total assets $627 $534Liabilities and shareholders; equityCurrent liabilities $194 $157Long-term debt 108 121Shareholders' equity 325 256Total liabilities and shareholders' equity $627 $534The company's cost of capital is 8.5%a. Calculate Watervan's economic value added (EVA). Do not round intermediate calculations. Enter answer in millions rounded 2 decimal places.Economic value added $_____ millionb. What is the company's return on capital? Use start of year rather than average capital. Do not round intermediate calculations. Enter answer as a percent rounded to 2 decimal places.Return on capital _____%c. What is its return on equity? Use start of year rather than average equity. Enter answer as a percent rounded to 2 decimal places.Return on equity _____%
Answer:
1. Economic value added = $34.04 million
2. Company's return on capital = 18.79%
3. Return on equity = 24.61%
Explanation:
1. Economic value added (EVA) = NOPAT - capital charge
Where;
NOPAT = EBIT × ( 1 - tax rate )
Tax rate = Taxes / Income before taxes
= 34 / 97 * 100
= 35%
NOPAT = 109 × ( 1 - 35% )
= 70.85
But,
Capital charge = Capital employed × Cost of capital = (Equity + Interest bearing Liabilities) × Cost of capital
= (325 + 108) × 8.5%
= 433 × 8.5%
= 36.81
Therefore,
Economic value added(EVA)
= 70.85 - 36.81
= $34.04 million
2. Company's return on capital(using start of year equity)
= NOPAT / (Total assets - Current liabilities)
= 70.85 / (534 - 157)
= 70.85 / 377
= 0.1879
= 18.79%
Return on capital is 18.79%
3. Return on equity(using start of year equity) = Net income / Shareholder's equity
= 63 / 256
= 1.125
= 24.61%
Return on equity is 24.61%
A measurement of the excess value produced on an investment is called the Economic Value Added (EVA). The "true" cash flow return on capital received from an investment is what is meant by the term return on capital (ROC).
1. Economic value added is $34.04 million.
2. Company's return on capital is 18.79%.
3. Return on equity is 24.61%.
The calculations are provided below:
Economic value added (EVA) = capital charge - NOPAT
Where;
NOPAT equals EBIT - (tax rate - 1)
Tax rate equals taxes / pre-tax income
= 34 / 97 * 100
= 35%
NOPAT = 109 × (1 - 35%)
= 70.85
But,
Capital employed x Capital charge Cost of capital is equal to equity plus interest-bearing liabilities.
= (325 + 108) × 8.5%
= 433 × 8.5%
= 36.81
Therefore,
EVA or economic value added
= 70.85 - 36.81
equals $34.04 billion
2. The firm's return on capital (using equity at the year's beginning)
(Total Assets - Current Liabilities) = NOPAT
= 70.85 / (534 - 157)
= 70.85 / 377
= 0.1879
= 18.79%
18.79% is the return on capital.
3. Net income divided by shareholder equity, or return on equity (using start-of-year equity).
= 63 / 256
= 1.125
= 24.61%
24.61% is the return on equity.
A measure of a company's financial performance known as economic value added (EVA) is based on the residual wealth that is determined by subtracting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
EVA is also known as economic profit since it aims to identify a company's genuine economic profit. Stern Value Management, initially established as Stern Stewart & Co., is a management consulting business that developed this metric.
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Choose the correct term for each of the following descriptions.
A. Expenditure on research and development.
B. A bank loan.
C. Listed on a stock exchange.
D. Has limited liability.
E. Responsible for bank relationships.
F. Agency cost.
Explanation:
A. Expenditure on research and development. > Investment decision.
Reasearch and development (R&D) is an investment cost because the results of such research can benefit the company long-term.
B. A bank loan. > Financial asset.
A bank loan involves cash, and could be rightly called a financial asset.
C. Listed on a stock exchange. > Public corporation.
Only public corporations are listed on stock exchange, an example is Microsoft.
D. Has limited liability. > Corporation
E. Responsible for bank relationships. > The Treasurer.
F. Agency cost. > Agency cost
You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets.
Which of the following is true for the statement of cash flows?
a. It reflects cash generated and used during the reporting period.
b. It reflects revenues when earned.
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.
Globo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
a. $135 million
b. $64 million
c. $90 million
d. $180 million
Answer:
Which of the following is true for the statement of cash flows?
a. It reflects cash generated and used during the reporting period.Revenues are recognized when the earning process is completed, and they are not necessarily associated to the collection of cash, e.g. accounts receivable.
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.
What statements? I looked for a similar question:
Ruth Enterprises distributes a holiday bonus to all its employees ⇒ OPERATING ACTIVITYYum Co. uses cash to repurchase 10% of its common stock. ⇒ FINANCING ACTIVITYA company buys some common stock in its supplier's firm with its extra cash. ⇒ INVESTING ACTIVITYA company records a decrease in its total raw materials inventory from the previous year. ⇒ OPERATING ACTIVITYGlobo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
d. $180 millionWhich core competency of the Lean Enterprise focuses on building quality in?
Answer:
Technical Agility
Explanation:
Lean Enterprise is a process of continuous improvements in operations which generates value for the end product. The company have to continuously improve its product so that the customers remains satisfied and newer markets can be easily accessed depending upon the added features in the product.
For this reason, technical agility says that the newer technologies must be adapted or must be integrated with its existing technology because it brings quality to the company end products and makes processes and operations better than before.
Suppose the following table reflects the total satisfaction (utility) derived from eating slices of pizza. Calculate the marginal utility of each slice of pizza and answer two questions about marginal utility.a. What is the marginal utility of each slice of pizza? Instructions: Complete each of the seven yellow cells below. Enter your responses as a whole number. Indicate negative responses with a (-) negative sign.Quantity Consumed Total Utility Marginal UtilityNo slices 0 -First slice 25 Second slice 50 Third slice 75 Fourth slice 90 Fifth slice 103 Sixth slice 100 Seventh slice 90 b. Marginal utility first diminishes with slice numberc. Marginal utility first turns negative with slice number
Answer:
a)
quantity consumed total utility marginal utility
0 0 0
1 25 25
2 50 25
3 75 25
4 90 15
5 103 13
6 100 -3
7 90 -10
b) slice number 4
c) slice number 6
Explanation:
The law of marginal utility states that as the total number of units consumed increases, the utility yielded by consuming one more unit decreases.
How would you value a 1000 bond with 10% coupon rate?
Question
How would you value a 1000 bond with 10% coupon rate?
Assuming the bonds is repayable in five (5) years time with a yield of 11% per annum.
Answer:
Value of bond = $948.54
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond of the can be worked out as follows:
Step 1
PV of interest payments
Annul interest payment = 10% × 1000 = 100
Annual yield = 11%
Total period to maturity (in years) = 8 years
PV of interest =
100 × (1- 1.11^(-8)/)/ 0.11 = 514.612
Step 2
PV of Redemption Value
= 1,000 × (1.11)^(-8) = 433.926
Step 3
Price of bond
= 514.612 + 433.926 = 948.539
Value of bond = $948.54
Which of the following is perhaps the main advantage associated with the use of advertising?
A) It takes little time to develop an advertising campaign.
B) The total dollar layout in advertising is usually low.
C) It is an extremely cost efficient way to reach a large number of people.
D) It can quickly convey a large amount of technical information.
E) It can be quite memorable.
Answer:
C) It is an extremely cost efficient way to reach a large number of people.
Explanation:
Advertising refers to a marketing strategy in which the company able to promote its goods and services in a various ways like in television, social media, print media, etc so that it could create awareness among the people
According to the given options, the option C is correct as it derives the actual meaning and motive of advertising that it is cost efficient plus it also reaches to a large number of people.
hence, the correct option is c.
What would the net value of a long straddle position be if the stock price at expiration is $35?
Answer:
$1.15
Explanation:
Calculation for the net value of a long straddle position
Using this formula
Net value of a long Straddle=(Stock price at expiration-Strike price)-Put option selling-Call option selling
Let plug in the formula
Net value of a long Straddle = ($35-$29)-$2.90-$1.95
Net value of a long Straddle=$6-$2.90-$1.95
Net value of a long Straddle=$1.15
Therefore the net value of a long straddle position will be the amount of $1.15
Smoking cigarettes is a leading cause of many diseases. Suppose the government has opened several public clinics that treat smoking-related diseases and is trying to decide how to fund these clinics. One suggestion is to raise the funds for the public clinics by imposing a tax on yachts. This tax follows:
Answer:
The ability-to-pay principle
Explanation:
Direct incentives are designed to induce changes in behavior. Indirect incentives change behavior in ways that were not intended. Identify each item as an example of a direct or an indirect incentive.a. Car alarms to discourage break-ins b. Raising corporate income tax rates leads to fewer new businesses c. Frequent-flier points to increase customer loyalty d. Government-funded debt relief for college graduates leads to more student-loan debt
Answer and Explanation:
The Direct incentive is the incentive that has an instant impact on the users of the resources and the returns to the investments are directly influenced
On the other hand, the indirect incentives have an indirect impact for changing overall conditions of the framework
Therefore the categorization is as follows
For direct incentive
1. car alarms
2. Frequent filter points
For indirect incentive
1. raising corporate income
2.Government-funded debt
The following information should be relevant:
The Direct incentive refers to the incentive that has an instant effect on the users of the resources and the returns to the investments are directly impacted. While On the other hand, the indirect incentives have an indirect impact for changing total framework conditions
So, the categorization is as follows
For direct incentive
1. car alarms
2. Frequent filter points
For indirect incentive
1. raising corporate income
2.Government-funded debt
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Which of the following is not an example of the bricks-and-clicks e-tailing business model? A. Walmart.com B. JCPcnney.com C. Drugstore.com D. Staples.com
Answer:
C
Explanation:
bricks-and-clicks e-tailing business model are businesses that have physical stores and also have an online store.
E-tailing business models only exist online
A recession is usually declared to be over when short-run output returns to potential output.A. TrueB. False
Answer:
False
Explanation:
A recession is a period of general decline in economic activities. It is when the GDP of a country for two consecutive quarters is negative.
Potential output is the output an economy can produce if all its resources are fully employed.
During a recession, output is negative so output would be less than potential output.
________is important if people from different departments are going to work together to produce better outcomes than they could individually.
Answer:
collaboration
Explanation:
Collaboration is a term that describes a form of synergy which involves two or more individuals or groups operating together for the purpose of reaching a common goal of achieving mutual objectives.
Hence, COLLABORATION is important if people from different departments are going to work together to produce better outcomes than they could individually.
What are the two branches of quantitative management?
Answer:
management science and operations management.
Explanation:
Quantitative Management is a form of management that is often employed in solving issues relating to numbers or figures. It involves the utilization of mathematical components, statistical formulas, and computerization modeling to create definite solutions and aids the management team to make a better decision.
It is basically divided into two, and they are:
1. Management Science: this deals with the mathematical aspect of the management team decision.
2. Operations Management: this deals with products and services delivery of the firm
Maxwell purchased $30,000 worth of 52-week T-Bills for $29,650. What will be the rate of return on his investment? (Round you two decimal places.)
Answer:
The rate of return per year = 1.18%
Explanation:
We know that 52 weeks = 1 year
Investment amount = $29650
Now first find the return on investment by subtracting the purchase price from the actual value of T bills.
Return on the investment = Actual value of T bill – Purchase price
Return on the investment = $30000 - $29650 = $350
The rate of return per year = (350/29650) * 100
The rate of return per year = 1.18%
The profit earned on an investment is divided by the cost of that investment to determine the return on investment (ROI). When represented as a percentage, an investment with a profit of $100 and a cost of $100 would have an ROI of 1 or 100%.
1.18% will be the rate of return on Maxwell's investment.
GIVEN1 year = 52-weeks
Investment amount = $29650
NOTESubtract the purchase price from the real value of T bills to get the return on investment.
[tex]\text{Return on the investment = Actual value of T bill – Purchase price }[/tex]
[tex]\text{Return on the investment} = 30,000 - $29,650 = 350[/tex]
[tex]\text{The rate of return per year} = \frac{350}{29,650}[/tex] × [tex]100[/tex]
[tex]\text{The rate of return per year} = 1.18[/tex]%
Therefore, 1.18% is the computed value of the rate of return on investment.
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To avoid accepting projects that actually should be rejected, a company should ignore intangible benefits in calculating net present value.
a. True
b. False
Answer:
false
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
Monetary amounts should be allocated to intangible benefits and incorporated into the calculation of NPV
A company's trial balance included the following account balances: Accounts payable $19,287 Accounts receivable 81,416 Cash 73,404 Income tax payable 3,592 Inventories 25,896 Note payable, due in two years 1,789 Equipment 54,928 Stockholders' equity 203,608 Supplies 5,592 Wages payable 12,960 What is the amount of Total Assets on the Balance Sheet
Answer:
Total Assets on the Balance Sheet is $241,236.
Explanation:
Total Assets would include the total from the Non Current Assets Section and the total from the Current Assets Section of the Balance sheet.
Here is an extract of the Assets Section of the Balance Sheet :
Assets
Non-Current Assets
Equipment $54,928
Total Non-Current Assets $54,928
Current Assets
Inventories $25,896
Supplies $5,592
Accounts receivable $81,416
Cash $73,404
Total Current Assets $186,308
Total Assets $241,236
Which of the following is not generally correct about recording a sale of a debt security before maturity date?
a. Accrued interest will be received by the seller even though it is not an interest payment date.
b. An entry must be made to amortize a discount to the date of sale.
c. The entry to amortize a premium to the date of sale includes a credit to the Premium on Debt Investments.
d. A gain or loss on the sale is reported as an other revenue or expense.
Answer: The entry to amortize a premium to the date of sale includes a credit to the Premium on Debt Investments.
Explanation:
Debt security is simply issued by either the government or a corporation and it's an investment in debt instrument.
The statement that is not generally correct about recording a sale of a debt security before maturity date is that the entry to amortize a premium to the date of sale includes a credit to the premium on debt Investments. This isn't true as the entry to amortize a premium to the date of sale does not include a credit to the premium on debt Investments
Debt securities or bonds are financial instruments. The most common types of debt instruments are municipal bonds and corporate bonds. The debt securities can be the amount taken in the form of a loan that is to be paid mandatorily after the maturity of the time period.
The entry that is incorrect for recording a sale of a debt security before the maturity date is:
Option c. The entry to amortize a premium to the date of sale includes credit to the Premium on Debt Investments.
Reason:
The entry will be incorrect for the sale of debt security because the amortization premium at the date of sale does not include any credit amount to the premium over the debt instruments.
All the other options will record a sale of debt before its maturity period.
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Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) owner’s equity:_______.
a. accounts payable
b. cash
c. fees earned
d. land
e. supplies
f. wages expense
Answer:
a. accounts payable -liability
b. cash -asset
c. fees earned -owner’s equity
d. land -asset
e. supplies -asset
f. wages expense- owner’s equity
Explanation:
Accounts payable is an obligation payable to the supplier,hence,it is a liability.
Cash is an asset of the business which is used in purchasing other assets such as inventory or trading securities.
Fees earned would increase retained earnings which is an integral part of the owner's equity
Land is a long-lived asset whose benefits would be derived in more than one year.
Supplies are assets of the business which are used in the business.
Wages expense reduces retained earning in owner's equity
5) An international company is producing $50 widgets at a cost of $50,000 and is selling
them for $60,000. If it produces a 51st unit, its total sales will be $62,000 and its total cost will
be $51,500. Should the company produce the 51st unit?
6) Hibw will the following events affect the production possibility frontier of an economy?
Event A: A large fraction of the work force becomes unemployed.
Event B: The productivity of all work force doubles.
Event C: The government requires dairy farmers to destroy part of their herds.
Answer:
00
Explanation:
00
Which statement best explains how elasticity and incentives work together?
A )An elastic good, such as a game, is more likely to respond to incentives.
B) An inelastic good, such as a game, is more likely to respond to incentives.
C) An elastic good, such as a game, is less likely to respond to incentives.
D) An inelastic good, such as a game, is less likely to respond to incentives.
Answer: A
Explanation: A. An elastic good, such as a game, is more likely to respond to incentives.
Flexibility and incentives coexist A game is an example of an elastic good that is more likely to respond to incentives. As a result, choice (A) is the right one.
What is Elasticity ?Elasticity is a term used in economics to describe how susceptible one economic component is to shifts in another.
For instance, the relationship between changes in supply or demand and price changes or between changes in demand and income changes.
Demand is said to be inelastic if it remains largely constant regardless of price changes and has a coefficient of elasticity below 1.0.Clothing or electronics are examples of elastic goods, whereas inelastic goods include things like food and prescription medications.
Cross elasticity quantifies the shift in demand for one commodity as a result of price changes for another, related good. when the elasticity value is larger than 1.0
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Which type of private label brand carries no evidence of a retailer s affiliation, is manufactured by a third party, and is sold exclusively at the retailer? A. A captive brand B. A complementary brand C. A cooperative brand D. An exclusive brand E. A generic brand
Answer:
A. A captive brand
Explanation:
-A captive brand is when a brand is produced by another party and owned by the retailer but there is no evidence of this and it is only sold by it.
-A complementary brand is when a brand is marketed together with another one to encourage the purchase of both.
-A cooperative brand is when a brand shares a promotion with another one.
-An exclusive brand is a brand that is produced by the retailer and it is sold using its name.
-A generic brand is when a product doesn't have a brand name and it has a lower price than the ones from well-known brands.
According to this, the answer is that the type of private label brand that carries no evidence of a retailer s affiliation, is manufactured by a third party, and is sold exclusively at the retailer is a captive brand.
Which of the following is a difference between the marketing concept and the selling concept?
a. The marketing concept focuses on customer conquest, whereas the selling concept focuses on targeting the right customers.
b. The marketing concept focuses on short-term sales, whereas the selling concept strives to build long-term customer relationships.
c. The marketing concept is product-centered, whereas the selling concept is production-centered.
d. The marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.
e. The marketing concept takes an inside-out perspective, whereas the selling concept takes an outside-in perspective.
Answer: d. The marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.
Explanation:
A difference between the marketing concept and the selling concept is that the marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.
A selling concept believes there must be adequate promotion and large scale selling for consumers to purchase a firm's products while according to Marketing concept,the need of the consumers has to be known and identified by the firms.
Anderson's theory of skill development distinguishes between declarative and procedural knowledge. Procedural knowledge refers knowing how to do something. What is declarative knowledge? a. Factual knowledge about a task b. Automatic task processing. c. Associative knowledge of the task. d. Muscle memory
Answer:
a. Factual knowledge about a task
Explanation:
Anderson's theory distinguishes between two theories. The procedural theory and the declarative theory. While the procedural theory is basically knowledge on how to do something, the declarative knowledge theory is the knowledge about facts. It is the basic knowledge or facts about things that are stored in the memory. It is static in nature. It is knowledge about something, a process or a place or task which is already processed and stored in the memory.