Where the above conditions are given, the inventory balance is $5,250.
What is the explanation for this?To calculate the inventory balance on April 30 using the weighted-average method in a perpetual system, we need to compute the weighted-average cost per unit and then multiply it by the remaining inventory quantity.
Here's the calculation -
Apr 1 inventory - 120 units at $33 = $3,960
Purchase on Apr 10 - 40 units at $36 = $1,440
Purchase on Apr 24 - 50 units at $39 = $1,950
Total cost of goods available for sale -
$3,960 + $1,440 + $1,950 = $7,350
Total units available for sale
120 + 40 + 50 = 210 units
Weighted-average cost per unit -
$7,350 / 210 = $35
Remaining inventory on April 30: 210 - 60 (sold)
= 150 units
Inventory balance on April 30 using weighted-average
150 units * $35
= $5,250
Therefore, the correct answer is
$5,250.
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Full Question:
Although part of your question is missing, you might be referring to this full question:
The inventory data for an item for April is listed below. Use this inventory information to answer the question listed below.
Apr1. inventory 120 units at 33$
10. purchased 40 units at 36$
19. sold 60 units
24. purchased 50 units at 39$
Using a perpetual system, what is the inventory balance on April 30 if the company accounted for inventory using weighted-average?
$1,950
$5,325
$5,400
$5,850
what kind of investment stock does Amazon have?
Amazon (AMZN) is a publicly traded firm with a variety of shares available on the NASDAQ stock exchange. Amazon's market capitalization is about $1.7 trillion as of June 2021, making it one of the world's most valuable firms. Let's look at some of the different forms of stock that Amazon offers.
Common Stock
Amazon's common stock is the most commonly known type of stock. They are traded on public markets and are frequently referred to as equities. When someone buys a share of common stock, they are purchasing a small piece of ownership in the corporation. Common stockholders have voting rights on company matters such as electing board members and other decisions, as well as the ability to earn dividends if the corporation decides to issue them.
Preferred Stock
Preferred stock is another kind of stock that Amazon offers. Preferred stockholders receive a higher dividend rate than common stockholders, but they do not have the same voting rights. If a corporation issues dividends, preferred stockholders are paid before common stockholders. If the company goes bankrupt, preferred stockholders have a priority claim on company assets ahead of common stockholders.
Amazon Stock Purchase Plan
Amazon also provides an employee stock purchase plan (ESPP) for its employees. This enables workers to purchase Amazon shares at a discount price. This is not available to the general public, but only to Amazon employees.
The ownership structure of Amazon, as well as its financial health and growth prospects, can all affect the type of stock that an investor may want to buy.
As previously mentioned, Amazon has both common and preferred shares available, which means that investors must decide which type of investment is best for them. Common stockholders may be interested in having a say in corporate decisions, while preferred stockholders may be more concerned with earning a consistent dividend payout. It's important to understand how these different forms of stock operate, as well as the risks and benefits of owning them. Investors should always consult with a financial advisor before making investment decisions.
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Project A requires a $280,000 initial investment for new machinery with a five-year life and a salvage value of $30,000, Project A is expected to yield annual income of $20,000 per year and net cash flow of $70,000 per year for the next five years. Compute Project A's accounting rate of return.
Accounting Rate of Return (ARR) is a capital budgeting metric that is used to determine the profitability of a project. Project A's accounting rate of return is 22.86%
To calculate Project A's accounting rate of return, we can use the following formula:
ARR = (Average Annual Income / Initial Investment) × 100
Where: Average Annual Income = (Total Income - Salvage Value) / Number of Years
Total Income = Net Cash Flow × Number of Years
Let's now calculate the accounting rate of return for Project A using the given data.
Initial Investment (I) = $280,000
Salvage Value (S) = $30,000
Net Cash Flow (NCF) = $70,000
Number of Years (n) = 5
Total Income = Net Cash Flow × Number of Years
= $70,000 × 5
= $350,000
Average Annual Income = (Total Income - Salvage Value) / Number of Years
= ($350,000 - $30,000) / 5
= $64,000
Now, let's substitute these values into the ARR formula
ARR = (Average Annual Income / Initial Investment) × 100
= ($64,000 / $280,000) × 100
= 22.86%
Therefore, Project A's accounting rate of return is 22.86%.
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In any given week, Anne receives satisfaction only from the consumption of goods and from the consumption of leisure LL, which is measured in hours. Obviously, Anne consumes many different types of goods, but for simplicity we aggregate the dollar value of all the goods that she consumes during the week and call it CC. Assume that if Anne chooses to work, the hourly wage rate is w=5 and she has to sleep 8 hours per day. Potentially, if she wants, she can work up to 7 days a week.
1) If Anne chooses to devote 0 hours to leisure during the week, how much can she consume? C= ?
2) If Anne chooses to devote all available hours (except those she has to sleep) to leisure during the week, how much can she consume? C =?
3) If Anne chooses to devote 30 hours to leisure during the week, how much can she consume? C
4) Suppose w=5w=5 and the government gives Anne a subsidy of $250. She receives this money unconditionally, regardless of how many hours she works. We define Anne's budget set over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has a kink at (C,L)=(250,____) (fill in the blank)
5) Suppose w=5w=5 and the government gives Anne a subsidy such that her consumption is at least $250. That is, if she does not work at all, the government gives her $250. If she works enough to earn some d<250d<250 dollars towards consumption, the government gives her $250−d$250−d. If she works enough to earn d≥250d≥250, the government does not give her anything. We define Anne's budget set over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has two kinks. One kink - the one with the higher LL of the two - is at (C,L)=(250,____) (fill in the blank)
If Anne chooses to devote 0 hours to leisure during the week, how much can she consume? C= ?If Anne chooses to devote 0 hours to leisure during the week, she will have 7 * 24 - 8 * 7 = 112 available hours for work. Her budget set can be written as 112w = C or C = 112 * 5 = 560. Thus, if Anne chooses to devote 0 hours to leisure during the week, she can consume $560.2)
If Anne chooses to devote all available hours (except those she has to sleep) to leisure during the week, how much can she consume? C =?If Anne chooses to devote all available hours (except those she has to sleep) to leisure during the week, she will have no time for work. So, her budget set can be written as
0 = C or C = 0.
Thus, if Anne chooses to devote all available hours to leisure during the week, she can consume $0.3) If Anne chooses to devote 30 hours to leisure during the week, how much can she consume? C If Anne chooses to devote 30 hours to leisure during the week, she will have 7 * 24 - 8 * 7 - 30 = 50 available hours for work.
Her budget set can be written as
50w + LL = C or C = 250 + 5LL.
Given that Anne devotes 30 hours to leisure during the week, her budget set can be written as
C = 250 + 5 * 30 = 400.
Thus, if Anne chooses to devote 30 hours to leisure during the week, she can consume $400.4) Suppose w=5w=5 and the government gives Anne a subsidy of $250. She receives this money unconditionally, regardless of how many hours she works. We define Anne's budget set over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set.
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Can a surplus always be beneficial when compared to a deficit?
Why?
(emphasis on always)
No, a surplus cannot always be beneficial when compared to a deficit. Whether a surplus or a deficit is beneficial depends on the specific economic context and conditions. Here's a more detailed explanation:
1. Economic Context: In certain situations, a surplus may be undesirable or indicate underlying problems in the economy. For example, if there is a surplus of unsold goods or excess production capacity, it can lead to reduced investment, layoffs, and economic downturn. In such cases, a deficit might be preferred as it indicates higher levels of demand and economic activity.
2. Macroeconomic Policies: Surpluses and deficits can also be influenced by macroeconomic policies. In some cases, a government may deliberately run a deficit to stimulate the economy through increased spending and investment. This can be beneficial during periods of economic recession or low growth. On the other hand, running persistent deficits can lead to unsustainable levels of debt, higher interest rates, and inflation, which can have negative consequences in the long run.
3. External Factors: Surpluses and deficits in international trade can also have different implications. While a surplus in trade can indicate competitiveness and export strength, it may also lead to trade imbalances, protectionism, and disputes with trading partners. On the other hand, a deficit in trade can be indicative of reliance on imports or lack of competitiveness in certain sectors, but it can also signify strong domestic consumption and investment.
Therefore, it is not accurate to say that a surplus is always beneficial compared to a deficit. The impact of surpluses and deficits depends on various factors, including the economic context, macroeconomic policies, and external factors. It is crucial to assess the specific circumstances and consequences to determine the desirability of a surplus or a deficit in a given situation.
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Describe four product types and purchasing practices with an example of each product type.
Supplier selection is a process to identify the most viable business partner(s) and develop a long-term relationship between an organization and suppliers. Supplier selection is crucial for the following:
Reduce purchase risks (quality of the product)
Save an organization’s financial resources (proper pricing)
Smooth operation (matching capability and delivery commitment)
Sensitive to business integrity and intellectual properties.
Suppliers as a partner can be part of the success of any organization.
Convenience goods, shopping goods, specialty goods, and unsought goods are four types of product types.
Supplier selection is crucial for reduce purchase risks (quality of the product), save an organization’s financial resources (proper pricing), smooth operation (matching capability and delivery commitment), and suppliers as a partner can be part of the success of any organization. Therefore, the correct options are option 1, 2, 3, and 5.
The four product types are convenience goods, shopping goods, specialty goods, and unsought goods. Each of these types has different purchasing practices and examples.
1. Convenience goods: Convenience goods are inexpensive products that consumers purchase regularly and without much thought. The purchasing practices for convenience goods are that they are usually sold in many places, are priced affordably, and require little research to purchase.
Example: Soft drinks, toothpaste, and newspapers.
2. Shopping goods: Shopping goods are products that consumers purchase less frequently and take more time and effort to research. Consumers are willing to spend more time and money on these products. Purchasing practices include comparative shopping, a longer decision-making process, and seeking out quality information.
Example: Electronics, furniture, and clothing.
3. Specialty goods: Specialty goods are high-end products that are not sold in many locations. They are more expensive than convenience and shopping goods, and consumers usually have a brand preference. Purchasing practices include seeking out specific stores and locations, researching quality, and higher price points. Example: Luxury cars, designer clothing, and fine wines.
4. Unsought goods: Unsought goods are products that consumers do not know about or do not want to purchase. They require more marketing effort and consumer persuasion. Purchasing practices include creating awareness and interest in the product, providing incentives and promotional pricing.
Example: Burial plots, life insurance, and funeral services.
The supplier selection process is essential for all of the following reasons except D) Sensitive to business integrity and intellectual properties.
Supplier selection is crucial for the following reasons:
A) Reducing purchase risks, such as ensuring the quality of the product and timely delivery.
B) Saving an organization’s financial resources by ensuring proper pricing and reducing costs.
C) Ensuring smooth operations by matching supplier capability and delivery commitments.
E) Building long-term relationships with suppliers who can contribute to the organization's success.
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briefly introduce the features of international business
negociation
International business negotiation is a term used to describe the process of bargaining between two or more parties from different countries or cultures in order to achieve a mutually acceptable agreement.
The following are the features of international business negotiation:1. Cross-cultural communication: International business negotiations require communicating effectively with individuals from different cultures. Knowledge of foreign markets: In order to negotiate successfully, one must have a good understanding of the foreign markets one is dealing with.The complexity of the negotiation process: International business negotiations are usually more complicated than domestic negotiations because of the number of factors that must be taken into account.
Understanding legal and political environments: Negotiators must be familiar with the legal and political environments of the countries where they will be conducting business. Managing interpersonal relationships: Building and maintaining interpersonal relationships is a crucial part of the negotiation process, particularly in international negotiations. Negotiating across language barriers: Negotiators must be able to overcome language barriers and communicate effectively, both orally and in writing, in a foreign language.
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According to Keynes 1) monetary policy is particularly adept at managing the economy due to the high sensitivity of investment to the real interest rate 2) fiscal policy is counterproductive because the economy is always at full employment 3) monetary policy is better policy tool for managing the economy than fiscal policy 4)monetary policy can be ineffective because of the increased uncertainty during a recession
The statement that is true according to Keynes is that monetary policy can be ineffective because of the increased uncertainty during a recession.Keynes suggested that during a recession, monetary policy could be ineffective due to the increased uncertainty and pessimism that comes with the economic downturn. As a result, investment and consumption fall, causing an increase in unemployment.
Additionally, Keynes argued that fiscal policy is more effective during times of recession since it directly affects the demand for goods and services, thereby leading to an increase in employment.The other statements are not true according to Keynes. Keynes believed that fiscal policy is more effective than monetary policy in managing the economy, particularly during recessions.
He argued that fiscal policy can stimulate demand for goods and services by increasing government spending and lowering taxes, which can lead to an increase in employment and output. Keynes did not believe that the economy is always at full employment, as he observed that economies can experience periods of high unemployment due to insufficient aggregate demand.
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On January 1, 2020, Blossom Manufacturers had 294,000 common shares outstanding. On April 1, the corporation issued 29,400 new common shares to raise additional capital. On July 1, the corporation declared and distributed a 10% stock dividend on its common shares. On November 1, the corporation repurchased on the market 11.700 of its own outstanding common shares to make them available for issuances related to its key executives' outstanding stock options, Assume that Blossom Manufacturers had a 1-for-10 reverse stock split instead of a 10% stock dividend on July 1, 2020. Calculate the weighted average number of shares outstanding as at December 31, 2020. (Round answer to 0 decimal places, eg 5,255.) shares Weighted average number of shares outstanding
The value of the weighted average number of shares outstanding as at December 31, 2020 is 229,350 shares.
Calculation of weighted average number of shares outstanding using 1-for-10 reverse stock split:
When the corporation had a 1-for-10 reverse stock split instead of a 10% stock dividend on July 1, the number of shares outstanding would be 294,000 + 29,400 - 11,700 = 311,700 common shares.
For the first half of the year, the weighted average number of shares outstanding was:
294,000 × 3/12 = 73,500 shares
For the second half of the year, the weighted average number of shares outstanding was:
311,700 × 1/2 = 155,850 shares
Therefore, the weighted average number of shares outstanding as at December 31, 2020 would be:73,500 + 155,850 = 229,350 shares.
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Productivity growth is also closely linked to ____________________. a. trade balance b. GDP per capita c. the average level of wages d. the current minimum wage
b. GDP per capita. Productivity growth is closely linked to GDP per capita.
Productivity measures the efficiency with which inputs (such as labor and capital) are used to produce goods and services, while GDP per capita represents the average economic output per person in a country. When productivity increases, more output can be produced with the same amount of inputs, leading to higher GDP per capita.
Trade balance (a) refers to the difference between a country's exports and imports and is not directly linked to productivity growth. The average level of wages (c) and the current minimum wage (d) are factors related to labor compensation and income distribution but do not necessarily determine productivity growth.
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You plan to purchase 400 shares of Meridian Inc. at $50.00 per share on marain. The initial margin is 55.00%, the maintenance margin is 30.00%. What is the maximum amount that you are allowed to borrow for this position?
In order to find out the maximum amount that you are allowed to borrow for this position, you need to first calculate the total value of the position. This can be done using the following formula:Total value of position = Number of shares x Price per share= 400 x $50.00 = $20,000.
In this scenario, you plan to purchase 400 shares of Meridian Inc. at $50.00 per share on margin. The initial margin is 55.00%, and the maintenance margin is 30.00%.The maximum amount that you are allowed to borrow for this position is determined by the initial margin, which is the percentage of the total value of the position that you must put up as equity. In this case, the initial margin is 55%, which means you need to put up 55% of the total value of the position as equity. The rest can be borrowed.
To calculate the maximum amount you can borrow, you first need to calculate the total value of the position. This can be done by multiplying the number of shares by the price per share. In this case, the total value of the position is 400 shares x $50.00 = $20,000.Once you have the total value of the position, you can calculate the initial margin by multiplying the total value by the initial margin percentage. In this case, the initial margin is 55%, so the initial margin is 55% x $20,000 = $11,000.The amount you can borrow is simply the total value of the position minus the initial margin. In this case, the amount you can borrow is $20,000 - $11,000 = $9,000.
In conclusion, the maximum amount that you are allowed to borrow for this position is $9,000. This is calculated by subtracting the initial margin from the total value of the position. The initial margin is 55% of the total value of the position, which means you need to put up $11,000 as equity. The rest can be borrowed, which gives you a maximum borrowing amount of $9,000.
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On June 1, Grill Master Ltd. had an inventory of 10 barbeques at a cost of $440 each. Grill Master uses a periodic inventory system. During the month of June the following transactions occurred:
Jun 3 Purchased 25 barbeques at a cost of $440 each from BBQ King Ltd., terms n/30.
5 Paid $200 freight for the barbeques purchased on June 3.
6 Sold 12 barbeques to Outdoor Grill for $760 each, term n/30. The returns estimate was 5%.
7 Received credit from BBQ King for the return of two defective barbeques.
13 Issued a credit to Outdoor Grill for the return of one defective barbeque.
16 Received a credit from BBQ King for the defective barbeque returned by Outdoor Grill.
19 Purchased 10 barbeques from Backyard Barbecues at a cost of $440 each, terms 2/10, n/30.
20 Paid freight of $200 on the June 19 purchase.
On June 30, Grill Masters ending inventory was $6,440
Instructions
(a) Prepare journal entries to record the above transactions.
and explanations!
In June, Grill Master Ltd. recorded several transactions, including purchases, sales, returns, and freight payments. The corresponding journal entries were made to accurately reflect these transactions.
To record the transactions for Grill Master Ltd. in the month of June, the following journal entries would be made:
June 3:
Inventory (25 x $440) 11,000
Accounts Payable 11,000
(To record the purchase of 25 barbeques from BBQ King Ltd.)
June 5:
Inventory 200
Accounts Payable 200
(To record the freight payment for the barbeques purchased on June 3)
June 6:
Accounts Receivable 9,120
Sales Revenue 9,120
(To record the sale of 12 barbeques to Outdoor Grill)
Cost of Goods Sold 4,368
Inventory 4,368
(To record the cost of goods sold for the 12 barbeques sold)
June 7:
Accounts Payable 880
Inventory 880
(To record the return of two defective barbeques to BBQ King)
June 13:
Accounts Receivable 760
Sales Returns and Allowances 40
Inventory 40
(To record the return of one defective barbeque from Outdoor Grill)
June 16:
Accounts Payable 440
Inventory 440
(To record the return of the defective barbeque from Outdoor Grill to BBQ King)
June 19:
Inventory (10 x $440) 4,400
Accounts Payable 4,400
(To record the purchase of 10 barbeques from Backyard Barbecues)
June 20:
Inventory 200
Accounts Payable 200
(To record the freight payment on the June 19 purchase)
June 30:
Cost of Goods Sold 8,000
Inventory 8,000
(To record the cost of goods sold for the remaining inventory)
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All of the accounts from the Smyth Company Balance Sheet for the
year ending December 31, 2021 are given below: Accounts
payable=\$18,900 Accounts epsilon receivable=$29,780;
accruals=$13,390 Accumula
Accounts Payable: $18,900; Accounts Receivable: $29,780; Accruals: $13,390.
What are the account balances on the Smyth Company Balance Sheet for the year ending December 31, 2021, including Accounts Payable, Accounts Receivable, and Accruals?The accounts listed in the Smyth Company Balance Sheet for the year ending December 31, 2021 include Accounts Payable of $18,900, Accounts Receivable of $29,780, and Accruals of $13,390.
Accounts Payable represents the outstanding amount owed by the company to its suppliers or creditors for goods or services received but not yet paid for.
Accounts Receivable, on the other hand, represents the amount owed to the company by its customers for goods or services provided on credit.
Lastly, Accruals refer to expenses that have been incurred but not yet paid for or recorded, typically related to services received or goods consumed.
These accounts provide insight into the company's short-term liabilities (Accounts Payable) and short-term assets (Accounts Receivable), while Accruals help capture the company's current financial obligations that have yet to be settled.
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Joe’s house cleaning is a company that provide household junk
removal services. The owner of the company thinks they can cross
sell power washing (that is, cleaning the outside of a house and
drivew
Joe’s House Cleaning, as the name implies, is a company that specializes in household junk removal.
The owner of the company is considering expanding his offerings by including power washing, which entails cleaning the outside of a house and driveway. Cross-selling is a strategy that can aid businesses like Joe's House Cleaning in boosting sales by offering additional services to existing customers. In this case, the goal is to persuade existing clients who use the junk removal service to use the power washing service as well.
The company already has an existing customer base who trust them and are familiar with their services. By cross-selling the power washing service, the company can leverage this established relationship to expand its business offerings and create new revenue streams. Cross-selling will also make the company more competitive by providing a full range of services. Offering power washing to clients will also provide an additional revenue stream that would have been lost if customers had to hire another company to handle power washing.
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If two projects have the same risks, the same payback periods, and the same initial investments, they are equally attractive.
a. True.
b. False.
False, If two projects have the same risks, the same payback periods, and the same initial investments,
they may not be equally attractive. There are other factors to consider in evaluating the attractiveness of projects, such as the profitability, cash flows over the project's lifespan, and the desired rate of return.
While the risk level, payback period, and initial investment are important considerations, they do not provide a complete picture of the project's attractiveness.
Profitability is a crucial factor, as it determines the return on investment and the potential for generating future cash flows. Projects with higher profitability would generally be more attractive than those with lower profitability, even if they have the same risk and payback period.
Additionally, the timing and magnitude of cash flows can vary between projects. Projects that generate a higher and more consistent cash flow stream over the project's lifespan may be more attractive,
as they provide better returns and potential for reinvestment. The time value of money is also a key consideration, as cash flows in the future are typically worth less than cash flows in the present.
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4. an organization
has a loaned BD 820,000 to buy the needed machines. The loan holds
an interest rate of 5% per year and is to be returned in equal
payments over the next seven years. calculate
The annual equal payments required to repay the loan of BD 820,000 over the next seven years at a 5% interest rate is approximately BD 68,884.62.
To calculate the equal payments for repaying the loan of BD 820,000 over seven years at an interest rate of 5% per year, we can use the present value annuity factor formula. The present value annuity factor can be calculated using the following formula:
Present Value Annuity Factor = (1 - (1 + r)^(-n)) / r
where r is the interest rate per period and n is the number of periods.
In this case, r = 5% = 0.05 and n = 7. Plugging these values into the formula, we have:
Present Value Annuity Factor = (1 - (1 + 0.05)^(-7)) / 0.05
= (1 - 1.402551) / 0.05
= 0.5954902 / 0.05
= 11.909804
To calculate the equal payments, we divide the loan amount by the present value annuity factor:
Payment = BD 820,000 / 11.909804
≈ BD 68,884.62
Therefore, the equal payments that need to be made over the next seven years to repay the loan of BD 820,000 at an interest rate of 5% per year is approximately BD 68,884.62 per year.
""
4. an organization has a loaned BD 820,000 to buy the needed machines. The loan holds an interest rate of 5% per year and is to be returned in equal payments over the next seven years. Calculate the equal payments that need to be made over the next seven years to repay the loan of BD 820,000 at an interest rate of 5% per year.
""
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Clear Visions Company has 40% debt and 60% equity, as optimal capital structure. Their stock price is $57, last dividend distributed was $5.2, growth rate is expected as 5%, corporate tax rate is 25% and flotation costs are 10%. They can borrow at 12% rate up to $17 million, above which interest rate rises to 14%. Their expected net income for next year is $18 million, and 45% will be distributed as dividends. They have three projects under analysis: a has 19 million cost, 18% IRR, ß has 25 million cost and 16% IRR and 2 has 15 million cost and 14% IRR. a. Please calculate component costs, and break point(s). b. Please calculate WACC's. c. What will be the optimal capital budget?
For the three projects under analysis, a. component costs are debt 9% and equity 16.10%, and break point is 6.47%. b. The WACC's is 12.90%. c. The optimal capital budget is $15,000,000..
a. Calculation of component costs
1. Debt:
Wd = D/(D+E)
Wd = 40%
D = $17,000,000(1 - 10%) = $15,300,000
E = $23,000,000
Cost of Debt before-tax rate = rd = 12%
Corporate Tax Rate = T = 25%
Cost of Debt after-tax rate = rd(1-T)
rd(1-T) = 12%(1-25%) = 9%
2. Equity:
We will use the CAPM model to calculate the cost of equity as follows:
CAPM Model: Ke = Rf + β * (Rm - Rf)
Where, Ke = cost of equity, Rf = Risk-Free rate = 2.50%, β = beta coefficient, Rm = Expected Market return = 12.00% (given in the question)
Ke = 2.50% + 1.40*(12.00% - 2.50%) = 16.10%
Weighted Average Cost of Capital (WACC)
WACC = (1 - T)*rd * Wd + Ke * We
WACC = (1 - 25%)*9%*40% + 16.10%*60%
WACC = 12.90%
3. Breakpoints
We can calculate Breakpoints as follows:
BPN1 = amount of financing at which the before-tax cost of debt rises above the cost of equity. To calculate the breakpoint, we can use the following formula:
BPN1 = D/(D+E)*rd
Before-tax cost of debt rises above the cost of equity, when D/(D+E)*rd > KeBPN1 = $15,300,000/($15,300,000 + $23,000,000)*12%
BPN1 = 7.49%
BPN2 = amount of financing at which the before-tax cost of debt rises above 14%.
To calculate the breakpoint, we can use the following formula:
BPN2 = D/(D+E)*rd
BPN2 = $15,300,000/($15,300,000 + $23,000,000)*14%
BPN2 = 6.47%
b. Calculation of WACC
WACC = (1-T)*rd*Wd + Ke*We
WACC = (1-25%)*9%*40% + 16.10%*60%
WACC = 12.90%
c. Calculation of optimal capital budget
To determine the optimal capital budget, we need to calculate the NPV and IRR of each project, and choose the projects that have positive NPV and IRR greater than the cost of capital.
Project a:
NPV = -$19,000,000 + $18,000,000 / (1 + 12.9%) + $19,000,000 * 18% / (1 + 12.9%) ^ 2
NPV = -$2,626,343
IRR = 18%
Project β:
NPV = -$25,000,000 + $18,000,000 / (1 + 12.9%) + $25,000,000 * 16% / (1 + 12.9%) ^ 2
NPV = -$9,291,261
IRR = 16%
Project 2:
NPV = -$15,000,000 + $18,000,000 / (1 + 12.9%) + $15,000,000 * 14% / (1 + 12.9%) ^ 2
NPV = $1,399,183
IRR = 14%
We can conclude that project 2 is the optimal investment as it has the highest NPV and IRR greater than the cost of capital. Therefore, the optimal capital budget is $15,000,000.
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harvest cereals imports wheat as an ingredient for its product line. the current price of wheat per bushel will allow for a reasonable profit margin. but, harvest understands that the global price of wheat changes, sometimes quite often, and is worried that the price of the next shipment due in the near future will change from its current level. given this scenario, what option position will provide the best wheat hedge?
In order to hedge against the potential price changes of wheat, the option position that will provide the best wheat hedge would be: Buy put options on wheat. (Option 3)
Buying put options on wheat allows Harvest Cereals to have the right, but not the obligation, to sell wheat at a predetermined price (the strike price) within a specified period of time (until the option's expiration date). By purchasing put options, Harvest Cereals can protect itself from potential price decreases in wheat. If the price of wheat falls below the strike price, the put options will gain value, offsetting the loss in the physical wheat purchase.
Writing (selling) put options (option 1) exposes Harvest Cereals to the risk of having to purchase wheat at a higher price if the market price drops below the strike price.
Writing straddles (option 2) involves simultaneously selling both put and call options on wheat. This strategy may not be the best choice for hedging a specific directional price risk, as it benefits from high volatility and uncertainty rather than protecting against price changes.
Writing call options (option 4) would expose Harvest Cereals to potential losses if the price of wheat rises above the strike price, as they would be obligated to sell wheat at a lower price.
Buying call options (option 5) does not provide an effective hedge against potential price decreases in wheat, as it only allows the right to buy at a predetermined price and would result in a loss if the price decreases.
Therefore, buying put options on wheat (option 3) is the most suitable option to hedge against potential price changes and protect Harvest Cereals from unfavorable price movements in their wheat imports.
The correct question is:
Harvest Cereals imports wheat as an ingredient for its product line. The current price of wheat per bushel will allow for a reasonable profit margin. But, Harvest understands that the global price of wheat changes, sometimes quite often, and is worried that the price of the next shipment due in the near future will change from its current level. Given this scenario, what option position will provide the best wheat hedge?
1. Write put options on wheat
2. Write straddles on wheat
3. Buy put options on wheat
4. Write call options on wheat
5. Buy call options on wheat
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Which of the following is not one of the differences between international trade and domestic trade? A. International trade typically requires the use of foreign exchange markets. B. There are actual or potential barriers to the flow of inputs in international trade. C. There are actual or potential barriers to the flow of outputs in international trade. D. The law of comparative advantage does not apply in domestic trade, only in international trade.
The answer is D. The law of comparative advantage does not apply in domestic trade, only in international trade.
The law of comparative advantage is a fundamental principle in international trade that states that countries should specialize in producing goods and services in which they have a lower opportunity cost and trade with other countries to maximize overall efficiency and welfare. This principle applies to international trade because different countries have different resources, technologies, and production capabilities.
In domestic trade, within a single country, the law of comparative advantage does not play a significant role because the country does not face the same resource constraints and trade-offs as it does when engaging in international trade. Domestic trade is primarily driven by market forces, supply and demand, and domestic policies, rather than the concept of comparative advantage.
Therefore, option D is the correct answer as it highlights a difference between international trade and domestic trade.
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Communication among employees at social gatherings tends to , _________________________whether the gatherings are sponsored by the employer or not.
A. Encourage vertical but not horizontal communication B. Promote a strong organizational culture C. Generate negative interpersonal relations
D. Create a grapevine where one does not exist
The correct option is D. Create a grapevine where one does not exist.
Communication among employees at social gatherings tends to create a grapevine where one does not exist, whether the gatherings are sponsored by the employer or not. The grapevine is a form of informal communication system in an organization that is often gossipy and unreliable. It is usually based on rumors, hearsay, and informal conversations among employees. It can transmit information quickly, but it can also create misunderstandings and false beliefs.The grapevine is an essential part of organizational communication. It provides a means for employees to exchange information and ideas outside of formal communication channels. The grapevine can help employees stay informed about important issues in the organization and can also provide social support. However, it can also spread misinformation and rumors that can be harmful to the organization.Communication among employees at social gatherings can create a grapevine where one does not exist because employees are more relaxed and open outside of work. They may share information and opinions that they would not share in a formal setting. This can lead to the spread of rumors and other forms of gossip that can be damaging to the organization.
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Given the following information, calculate the net operating income assuming below-line treatment of capital expenditures: property: 4 office units, contract rents perunit: $2,500 per month; vacancy and collection losses: 15%; operating expenses: $42,000, capital expenditures: 10%. Please show your work
With a net operating income (NOI) of $60,000 after taking into account the final disposal of capital expenditures.
To calculate net operating income (NOI) given the capital expenditure treatment below, it is necessary to consider real estate rental income, vacancy and recovery losses, and operating expenses. Here is the breakdown of the calculation:
Rental income:
Number of office units:
Four
Contract rent per unit:
$2,500/month
Total monthly rental income:
4 units * $2,500 = $10,000
Annual rental income:
$10,000 * 12 = $120,000
Vacancy and collection loss:
Vacancy rate and collection loss rate:
15D44 Vacancies and Recovery Losses:
$120,000 * 0.15 = $18,000
Effective gross income:
Effective Gross Income (EGI) = annual rental income – vacancies and recovery losses
EGI = $120,000 – $18,000 = $102,000
Operating expenses:
Operating expenses:
$42,000
Net operating income:
Net Operating Income (NOI) = EGI – Operating Expenses
NOI = $102,000 – $42,000 = $60,000
investment:
Investment rate:
10.Capital investment:
$102,000 * 0.10 = $10,200
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Your view of the barriers or enablers to making project management and your study more effective in the future with regard to critical thinking.
Critical thinking is a critical component of project management. When project managers employ critical thinking skills, they are better prepared to confront challenges and execute the project more effectively.
The following are some of the barriers and enablers that might make project management and study more effective in the future regarding critical thinking:
Barriers to effective project management with regard to critical thinking include:Lack of critical thinking training: Lack of training may prevent project managers from grasping the true value of critical thinking. As a result, project managers may disregard critical thinking when they face difficulties, resulting in negative outcomes.Lack of interest in innovation and creative thinking: Project managers must maintain a strong interest in innovation and imaginative thinking to utilize critical thinking to its full potential.Individuals' biases: Project managers' biases might influence their decision-making, which can lead to undesirable consequences.Enablers to effective project management with regard to critical thinking include:Providing critical thinking training:Project managers will be better prepared to incorporate critical thinking into their projects if they have been educated and trained in this area.Breaking down problems: Project managers can use their critical thinking abilities to break down issues into manageable parts. This will help them to make more well-informed decisions.Increased involvement of stakeholders: When stakeholders are actively engaged, they can provide a fresh perspective on project management and help project managers identify previously overlooked obstacles or opportunities. This can significantly improve project outcomes.Learn more about critical thinking at:
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Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $280,000 in return for 50 percent of the corporation’s stock. Hermione contributed a building and land with the following fair market values and adjusted basis in return for 50 percent of the corporation’s stock: FMV Tax-Adjusted Basis Building 168,000 42,000 Land 252,000 168,000 Total $ 420,000 $ 210,000 To equalize the exchange, Wizard Corporation paid Hermione $140,000 in addition to her stock. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.) rev: 10_05_2018_QC_CS-141665 a. What amount of gain or loss does Ron realize on the formation of the corporation? What amount, if any, does he recognize? b. What is Ron’s tax basis in the stock he receives in return for his contribution of property to the corporation?c. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?d. What is Hermione’s tax basis in the stock she receives in return for her contribution of property to the corporation?e. What adjusted basis does Wizard Corporation take in the land and building received from Hermione? (Do not round intermediate calculations.)Assume Hermione’s adjusted basis in the land was $280,000. f. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? (Do not round intermediate calculations.)Assume Hermione’s adjusted basis in the land was $280,000. g. What adjusted basis does Wizard Corporation take in the land and building received from Hermione?Assume Hermione’s adjusted basis in the land was $420,000. h. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?Assume Hermione’s adjusted basis in the land was $420,000. i. What adjusted basis does Wizard Corporation take in the land and building received from Hermione?
a. Ron realizes no gain or loss on the formation of the corporation because he contributed cash in exchange for stock. He recognizes no gain or loss.
b. Ron’s tax basis in the stock he receives is equal to the amount of cash he contributed, which is $280,000.
c. Hermione realizes a gain of $210,000 on the formation of the corporation because the fair market value of the property she contributed ($420,000) is greater than her adjusted basis in the property ($210,000).
However, she does not recognize this gain because the exchange of property for stock in a corporation is generally a non-taxable event.
d. Hermione’s tax basis in the stock she receives is equal to her adjusted basis in the property she contributed ($210,000) plus the amount of cash she received ($140,000), for a total of $350,000.
e. Wizard Corporation takes an adjusted basis in the land and building received from Hermione equal to her adjusted basis in the property ($210,000).
f. If Hermione’s adjusted basis in the land was $280,000 instead of $168,000, her total adjusted basis in the property she contributed would be $322,000.
She would realize a gain of $98,000 on the formation of the corporation ($420,000 - $322,000). However, she would still not recognize this gain because the exchange of property for stock in a corporation is generally a non-taxable event.
g. If Hermione’s adjusted basis in the land was $280,000 instead of $168,000, Wizard Corporation would take an adjusted basis in the land and building received from Hermione equal to her adjusted basis in the property ($322,000).
h. If Hermione’s adjusted basis in the land was $420,000 instead of $168,000, her total adjusted basis in the property she contributed would be $462,000.
She would realize no gain or loss on the formation of the corporation because her adjusted basis would be equal to the fair market value of the property she contributed ($420,000).
i. If Hermione’s adjusted basis in the land was $420,000 instead of $168,000, Wizard Corporation would take an adjusted basis in the land and building received from Hermione equal to her adjusted basis in the property ($462,000).
Thus, Wizard Corporation would take an adjusted basis in the land equal to Hermione's adjusted basis.
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What are the two sub-methodologies of Six Sigma? Define them
Six Sigma is a highly structured problem-solving methodology that focuses on the continuous improvement of processes and products to achieve customer satisfaction. Six Sigma has two sub-methodologies which are DMAIC and DMADV.DMAIC stands for Define, Measure, Analyze, Improve, and Control.
It is a data-driven methodology used to improve an existing process. It is used when the process has not been performing at the expected level and has the potential to be improved. The DMAIC methodology is a cyclical process consisting of five phases, and the end goal of the methodology is to achieve a Six Sigma quality level.DMADV, which is also known as DFSS (Design for Six Sigma), is a data-driven methodology used to design a new process, product, or service. It stands for Define, Measure, Analyze, Design, and Verify. This methodology is used to develop a new product, process, or service from scratch. The DMADV methodology is also a cyclical process consisting of five phases, and the end goal of the methodology is to achieve a Six Sigma quality level.
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onstruct a PERT chart from the following task table ( make sure
you also put TE and TL and slack time)
0 Time Estimate in (weeks) R P 1 1 2 3 2 3 3 5 5 2 4 4 1 1 2 1 2 4 4 4 6 8 3 2 Estimated Time (O+4R+6)/6 1.83 3.3 3.3 3.3 5 5 2.5 1.8 Preceeding Activity 1 1 2,3 4 4 6 5,7
In the PERT chart, the following data used the formula i.e., Total Slack = LF-EF or LS-ES.
An effective project management tool for planning, coordinating, and scheduling work within a project is a PERT chart, often known as a PERT diagram.
Project managers can analyze each individual job in the project by using the graphical depiction of the project's chronology that is provided.
The calculation for TE(Early Start and Early Finish) and TL(Late Start and Late Finish) is:
Expected time = (O + 4×R + P) / 6
Therefore, the formula is used to calculate the PERT chart as follows:
Early Start (ES) = Maximum (or Highest) EF value from immediate Predecessor(s)
Early Finish (EF) = ES + Duration
Late Start (LS) = LF – Duration
Late Finish (LF) = Minimum (or Lowest) LS value from immediate Successor(s)
Total Slack = LF-EF or LS-ES
The following calculation is shown in the figure.
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Embleton Company estimates that variable costs will be 55% of sales, and fixed costs will total $837,000. The selling price of the product is $4.
New attempt is in progress. Some of the new entries may impact the last attempt grading.
Your answer is partially correct.
Calculate the break-even point in units and dollars.
Break-even point units
Break-even point $
eTextbook and Media
Incorrect answer icon
Your answer is incorrect.
Assuming actual sales are $2,480,000, calculate the margin of safety in dollars and as a ratio.
Margin of safety $
Margin of safety ratio %
The margin of safety is $620,000 and the margin of safety ratio is 25%.
How to find the margin of safetyTo calculate the break-even point in units, we can use the formula:
Break-even point (in units) = Fixed costs / Contribution margin per unit
First, we need to calculate the contribution margin per unit:
Contribution margin per unit = Selling price per unit - Variable cost per unit
Given that variable costs are 55% of sales and the selling price is $4, we can calculate:
Variable cost per unit = 55% of $4 = $2.20
Contribution margin per unit = $4 - $2.20 = $1.80
Now we can calculate the break-even point in units:
Break-even point (in units) = $837,000 / $1.80 = 465,000 units
Therefore, the break-even point in units is 465,000 units.
To calculate the break-even point in dollars, we can multiply the break-even point in units by the selling price per unit:
Break-even point (in dollars) = 465,000 units * $4 = $1,860,000
Now let's calculate the margin of safety:
Margin of safety (in dollars) = Actual sales - Break-even point (in dollars)
Margin of safety (in dollars) = $2,480,000 - $1,860,000 = $620,000
To calculate the margin of safety ratio, we divide the margin of safety in dollars by actual sales and multiply by 100:
Margin of safety ratio = ($620,000 / $2,480,000) * 100 = 25%
Therefore, the margin of safety is $620,000 and the margin of safety ratio is 25%.
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TRUE / FALSE. "The
destination marketing environment is a complex system consisting of
numerous stakeholders, external opportunities, threats, and
trends.
The given statement "The destination marketing environment is a complex system consisting of numerous stakeholders, external opportunities, threats, and trends" is true because destination marketing is the promotion of a place, city, state, or nation to potential visitors.
Destination marketing is a technique that incorporates aspects of marketing and advertising to entice visitors to choose a particular destination for their holiday or vacation. The primary goal of destination marketing is to raise brand awareness and attract visitors. Therefore, the destination marketing environment is a complex system consisting of various stakeholders, external opportunities, threats, and trends.
Stakeholders are individuals or organizations that have a direct or indirect interest in a particular industry. Stakeholders are those who contribute to the organization or are impacted by its operations and activities. In destination marketing, stakeholders may include hotels, travel agencies, airlines, restaurants, and local residents. External opportunities are opportunities for growth and development in the market that may be exploited. Threats, on the other hand, are potential factors that may harm an organization. Trends, on the other hand, are shifts in customer behaviour that can be exploited or posed a risk to an organization. These three elements are essential components of the destination marketing environment.
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Which of the following is true of a structural model?
It indicates that the shape of the distribution of a variable is equal both above and below the mean.
It analyzes the linear relationship between two variables by estimating coefficients for an equation for a straight line.
It is a visual representation of the relationships between the variables of interest.
It determines the best-fitting line by minimizing the vertical distances of all the points from the regression line.
It is an indicator of the importance of an independent variable in predicting a dependent variable.
The statement "It analyzes the linear relationship between two variables by estimating coefficients for an equation for a straight line" is true of a structural model.
The objective of a structural model is to analyze the relationship between variables and estimate the coefficients for an equation that captures that relationship. A structural model would estimate the coefficients for a straight line equation in the case of a linear relationship between two variables typically using methods like linear regression.
In order to comprehend and quantify the relationships between variables, evaluate the effect of independent variables on a dependent variable, and predict or draw conclusions based on the estimated coefficients, structural models are used. They shed light on the dynamics and underlying structure of the variables under investigation.
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Which of the following policies would dramatically and permanently reduce government outlays?
A raising the age to receive Social Security to 75 B. lowering wages for workers involved in all government construction projects DC reducing the number of people eligible for Medicare and Medicaid by half DD reducing the number of overseas military bases OE lowering Medicare and Social Security taxes
The one that would dramatically and permanently reduce government outlays is reducing the number of overseas military bases. option D.
The term government outlays are defined as the total amount of money that the government spends or disburses in a specific period.
The given options are policies that could potentially reduce the government's outlays:A) raising the age to receive Social Security to 75 - This policy might lead to a reduction in Social Security payouts, but it will not result in significant and permanent reductions in government outlays.
B) lowering wages for workers involved in all government construction projects - This policy may reduce the overall cost of construction projects, but it may not result in a significant and permanent reduction in government outlays.
C) reducing the number of people eligible for Medicare and Medicaid by half - This policy might lower the overall cost of Medicare and Medicaid programs, but it would also affect the people that benefit from these programs. This policy will not result in a significant and permanent reduction in government outlays.
D) reducing the number of overseas military bases - This policy could lead to significant reductions in government outlays as military bases abroad are one of the primary sources of government expenditures.
The maintenance and operations of such bases require huge amounts of money, which could be significantly reduced by cutting down the number of overseas military bases.
E) lowering Medicare and Social Security taxes - This policy will lead to a reduction in the revenue generated by the government from Medicare and Social Security taxes, but it will not result in a significant and permanent reduction in government outlays.
Thus, we can conclude that reducing the number of overseas military bases would dramatically and permanently reduce government outlays. So Option D is correct.
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Last month when Holiday Creations, Incorporated, sold 40,000 units, total sales were $160,000, total variable expenses were $112,000, and fixed expenses were $35,800. Required: 1. What is the company's contribution margin (CM) ratio?
The company's contribution margin (CM) ratio is 0.3 or 30%.
To calculate the company's contribution margin (CM) ratio, we need to first calculate the contribution margin. The contribution margin is the difference between total sales and total variable expenses.
In this case:
Total sales = $160,000
Total variable expenses = $112,000
Contribution Margin (CM) = Total Sales - Total Variable Expenses
CM = $160,000 - $112,000
CM = $48,000
The contribution margin ratio is the contribution margin divided by total sales:
CM Ratio = CM / Total Sales
CM Ratio = $48,000 / $160,000
To simplify the ratio, we can divide both the numerator and denominator by 1,000:
CM Ratio = 48 / 160
CM Ratio = 0.3
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Human Resources: Designing Compensation and benefits
packages
Explain the legally required benefits in compensation.
The legally required benefits in compensation are Social Security and Medicare Taxes, Paid Time Off , Health Insurance.
Social Security and Medicare Taxes: Employers are required to pay Social Security and Medicare taxes for their employees, which is usually matched by the employee.
Paid Time Off (PTO): Some states in the United States require employers to offer paid time off for vacation or illness purposes. This could be in the form of a specific number of days or hours each year.
Health Insurance: Employers with a certain number of employees are required to provide health insurance coverage to their full-time employees.
This requirement is under the Affordable Care Act (ACA).Workers’ Compensation: Employers are required to have workers’ compensation insurance in case their employees get injured or become ill as a result of their job.
Other benefits may not be legally required, but can be used to attract and retain employees. These may include retirement plans, life insurance, and tuition reimbursement.
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