Answer:
b. A cost that differs across decision alternatives.
Explanation:
When managers make business decisions, some costs are incurred when such decisions are made. They are called relevant cost. The main purpose of relevant cost is to avoid duplication of data that are not necessary, which could further make business decisions complicated.
Example of relevant cost is when a business or an organization checks whether or not to sell a business unit. The cost incurred in such decision is called relevant cost.
An asset used in a four-year project falls in the five-year MACRS class for tax purposes The asset has an acquisition cost of $5,100,000 and will be sold for $1,600,000 at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to Table 10.7 (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
$1,449,068.80
Explanation:
Book value on purchase $5,100,000
Less: Accumulated depreciation $4,218,720
(5,100,000*(0.2+0.32+0.192+0.1152)
Book value on sales $881,280
Salvage value of paint $1,600,000
Book value of as set $881,280
Gain on disposal $718,720
Tax on gain on disposal = $718,720 * 21% = $150,931.20
After tax cash flow = $1,600,000 - $150,931.20
After tax cash flow = $1,449,068.80
The Classical Theory is based on the assumption that an economy has ______________ or, if nudged away, quickly returns to that condition.
Answer:
c. full employment
Explanation:
The classical theory refers to a theory in which there is an existence of the full employment. The unemployment would be arise by including the legislation of the trade union and the legislation of the minimum wages in the market system i.e. free based.
Therefore according to the given situation, the option c is the correct and the same is to be considered
A loan of $1000 is to be paid off in 10 equal annual payments. The interest rate is 5% per year compounded annually.
A) If the first payment is made at EOY 1, what is the annual payment?
B) If the first payment is made at EOY 0, what is the annual payment?
Answer:
a. $129.50
b. $123.34
Explanation:
We are Calculating the Annual Payment Using the TVM Calculation,
a. PV = 1,000, FV = 0, T= 10, I = 0.05. If the first payment is made at end of year 1, the TVM calculator is adjusted to End mode
Annual payment = PMT(PV, FV, T, I]
Annual payment = PMT( 1,000, 0, 10, 0.05)
Annual payment (PMT) = $129.50
b. PV = 1,000, FV = 0, T= 10, I = 0.05. If the first payment is made at end of year 0, the TVM calculator is adjusted to Beginning mode
Annual payment = BEG PMT(PV, FV, T, I]
Annual payment = BEG PMT( 1,000, 0, 10, 0.05)
Annual payment (PMT) = $123.34
What is the present value of the following series of cash flows discounted at 12 percent:
$40,000 now;
$50,000 at the end of the first year;
$0 at the end of year the second year;
$60,000 at the end of the third year; and
$70,000 at the end of the fourth year
Answer:
The present value of the following series of cash flows discounted at 12 percent is:
$171,890
Explanation:
a) Data and Calculations:
Discount rate = 12%
$40,000 now;
$50,000 at the end of the first year;
$0 at the end of year the second year;
$60,000 at the end of the third year; and
$70,000 at the end of the fourth year
Future Value Discount Factor Present Value
$40,000 1 $40,000
$50,000 0.893 $44,650
$0 0.797 $0
$60,000 0.712 $42,720
$70,000 0.636 $44,520
Total present value $171,890
b) The present value is the discounted cash flow from series of future cash flows. The discount factor is applied to the individual cash flows, based on the number of years before the cash flow occurs.
Using email for ____ purposes has many benefits, including low cost, immediate communication, interactivity, and the ability to contact multiple customers.
Answer: a. marketing
Explanation:
Using email for marketing purposes has become a very effective method of advertising since the advent of the internet and subsequently email services. It is quite low cost and yet has a wide coverage.
It also enables immediate communication that can be quite interactive thereby ensuring that customers can be personally catered for. It also allows for creativity in marketing as a multitude of methods can be used ranging from newsletters to posters.
Jake Shirt Co. used 5,300 square yards of polyester to produce 3,000 shirts. The standard quantity of material for the 3,000 shirts produced is 6,100 square yards. The standard price for direct materials is $4.00 per square yard. The entry to record the direct materials quantity variance would include a:_____________
a. debit to Direct Materials Quantity Variance for $3,200.
b. credit to Direct Materials Quantity Variance for $3,200.
c. debit to Direct Materials Quantity Variance for $12,000.
d. credit to Direct Materials Quantity Variance for $12,000.
Answer:
b. credit to Direct Materials Quantity Variance for $3,200.
Explanation:
Direct material quantity variance = Standard quantity - Actual quantity * Standard price for direct material
Direct material quantity variance = (6,100 - 5,300) * $4
Direct material quantity variance = 800 * $4
Direct material quantity variance = $3,200 Favorable
The entry to record the direct materials quantity variance would include a credit to Direct Materials Quantity Variance for $3,200
1. If rs increases to 10%, what would be the value of the constant growth stock? (Note: D0 is $1.15 and the expected constant growth rate g = 4%.)
Answer: 19.93
Explanation:
The constant growth stock is $19.16. P = D/(r-g), where P is the current price, D is the next dividend to be paid, g is the expected dividend growth rate, and r is the required rate of return for the company.
What is a Constant growth rate?
A constant growth rate is defined as the average rate of return on investment over the time period required to achieve the total growth percentage that an investor seeks.
Given
Rate (r) = 10%
Growth (g) = 4%
Dividend (D) = $1.15
Required to calculate growth stock =?
growth stock P = D/(r-g)
growth stock = 1.15 / (10 - 4) = $19.16
Thus, the constant growth is $19.16. A constant growth rate is defined as the average rate of return on an investment during the time period required to achieve the total growth percentage desired by the investor.
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You borrow $10,000 today at a nominal rate of 5%; inflation for the past 10 years has been exactly 2%. Today, inflation instantly rises to 7% and stays that way for the duration of your loan. Based on the above information, ceteris paribus (all else equal), today: Group of answer choices
Here is the answer choice to the question
a. the real rate of interest on your loan is 14%.
b. the real rate of interest on your loan was previously 10% and is now 35%.
c. the real rate of interest on your loan is now –2%.
d. you will pay the lender back exactly $9,500.
e. you will pay the lender back exactly $10,700
Answer:
C. the real interest rate on your loan is now -2%
Explanation:
The real interest rate of can be gotten by subtracting the nominal interest rate from the inflation rate from nominal interest rate
Inflation rate = 7%
Nominal interest rate= 5%
= 5 percent - 7 percent
= -2%
The real interest rate can be defined as the rate of interest an investor, saver or lender is going to receive after they have allowed for inflation.
A deposit of $1000 is made in a bank account that pays 24% interest per year compounded quarterly. Approximately how much money will be in the account after 10 years
Answer:
$10,285.72
Explanation:
In this scenario, we can use the compound interest formula to calculate the total after 10 years. The formula is the A = P * [tex](1 + r/n)^{nt}[/tex]
where,
A = final value after interest
P = initial investment amount
r = annual interest rate in decimal form
n = number of time the interest is compounded based on t
t = total amount of time
In this case, the interest is compounded quarterly meaning 4 times a year, therefore we can plug all the values into the formula and solve for A
A = P * [tex](1 + r/n)^{nt}[/tex]
A = 1000 * [tex](1 + 0.24/4)^{4*10}[/tex]
A = 1000 * [tex](1.06)^{40}[/tex]
A = 1000 * 10.2857
A = 10,285.72
Therefore after 10 years the account will have a total of $10,285.72
A stock had returns of 18.58%, -5.58%, and 20.81% for the past three years. What is the variance of returns?
Answer:
Variance = 0.02141851
Explanation:
We first calculate the mean for the stocks
Mean = (0.1858 - 0.0558 + 0.2081) / 3
Mean = 0.3381 / 3
Mean = 0.1127
Variance = [(0.1858 - 0.1127)^2 + (- 0.0558 - 0.1127)^2 + (0.2081 - 0.1127)^2] / 3 -1
Variance = [0.0731^2 + (-0.1685^2) + 0.0954^2] / 2
Variance = 0.00534361 + 0.02839225 + 0.00910116 / 2
Variance = 0.04283702 / 2
Variance = 0.02141851
The variance of returns is 0.02141851
a. What is the price of a $1,000 par value bond with a 6% coupon rate paid semiannually, if the bond is priced to yield 5% and it has 9 years to maturity?
b. What would be the price of the bond if the yield rose to 7%.
c. What is the current yield on the bond if the YTM is 7%?
Answer:
a.
Bond Price = $1071.766818 rounded off to $1071.77
b.
Bond Price = $934.0515914 rounded off to $934.05
c.
Current Yield = 0.06423 or 6.423%
Explanation:
a.
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) = 1000 * 0.06 * 6/12 = $30
Total periods (n) = 9 * 2 = 18
r or YTM = 0.05 * 6/12 = 0.025 or 2.5%
The formula to calculate the price of the bonds today is attached.
Bond Price = 30 * [( 1 - (1+0.025)^-18) / 0.025] + 1000 / (1+0.025)^108
Bond Price = $1071.766818 rounded off to $1071.77
b.
Replacing YTM or r with = 7% * 6/12 = 3.5% or 0.035 in the above formula with everything else being constant, we calculate the price to be,
Bond Price = 30 * [( 1 - (1+0.035)^-18) / 0.035] + 1000 / (1+0.035)^108
Bond Price = $934.0515914 rounded off to $934.05
c.
The current yield is the coupon or interest payment made by the bond over a year which is expressed as a percentage of its current price.
Current Yield = (30 * 2) / 934.05
Current Yield = 0.06423 or 6.423%
MCQS
(i) Compensation of employees includes ________.
(a) wages, salaries, fringe benefits, Social Security contributions, and health and pension plans
(b) wages, salaries and taxes
(c) wages, salaries taxes and zakat
(d) non of the above
(ii) The difference between the income received from abroad for rendering factor services by the normal residents of the country to the rest of the world and income paid for the factor services rendered by nonresidents in the domestic territory of a country is known as-------
(a) Net Factor Income from Abroad
(b) Capital Consumption Allowances
(c) Depreciation
(d) None of these
(iii) Suppose that in year 1 an economy produces 75 unit of apple that sell for $5 each and 100 mobile that sell for $6 each. The next year the economy produces 110 apple that sell for $3.75 each and 80 mobile that sell for $5 each. The real GDP is
(a) 812.5
(b) 975
(c) 1030
(d) 980
(iv) What of the following does NOT enter GDP?
(a) Public Service
(b) Public education
(c) Life Expectancy
(d) National Defence
(v) The sum of all kinds of income received by the individuals from all sources is called---------
(a) Personal Income
(b) Private Income
(c) Personal Disposable Income
(d) None
Answer:
MCQS
(i) Compensation of employees includes ________.
(a) wages, salaries, fringe benefits, Social Security contributions, and health and pension plans .
(ii) The difference between the income received from abroad for rendering factor services by the normal residents of the country to the rest of the world and income paid for the factor services rendered by nonresidents in the domestic territory of a country is known as-------
(a) Net Factor Income from Abroad .
(iii) Suppose that in year 1 an economy produces 75 unit of apple that sell for $5 each and 100 mobile that sell for $6 each. The next year the economy produces 110 apple that sell for $3.75 each and 80 mobile that sell for $5 each. The real GDP is
(c) 1030 .
(iv) What of the following does NOT enter GDP?
(c) Life Expectancy.
(v) The sum of all kinds of income received by the individuals from all sources is called---------
(a) Personal Income.
Explanation:
1) Employee Compensation includes the salaries, wages, benefits, and other incentives paid to employees in exchange for their services to the company.
3) The Net factor income from abroad is the difference between the factor income earned from abroad by normal US residents and the factor income earned by non-residents (foreigners) in the US domestic territory.
4) The real GDP is the gross domestic product adjusted for the effect of inflation on prices. The real GDP for year 2 should be based on the prices of year 1 and is calculated as follows (110 * 5 + 80 * 6 = 1030).
5) Personal income is the sum of all kinds of income received by the individuals from all sources. It is used in the calculation of the US GDP. It is a subset of private income. Private income, which is broader than personal income, consists of personal income, profit tax, and undistributed profit.
A company has a pension liability of $440,000,000 that it must pay in 29 in years. If it can earn an annual interest rate of 4%, how much must it deposit today to fund this liability?
a. $141,086,622.46.
b. $122,766,607.13.
c. $47,049,210.09.
d. $135,660,213.91.
e. $112,973,212.81.
Answer:
a. $141,086,622.46.
Explanation:
Calculation for how much must it deposit today
Using this formula
Present Value = Future Value / [ ( 1 + r) n]
Where,
Future Value = 440,000,000
r = rate of Interest= 4%
n = Number of years = 29
Let plug in the formula
Present Value = 440,000,000 / [ ( 1 + 0.04)29]
Present Value= 440,000,000 / 3.1186514519
Present Value= $141,086,622.46
Therefore the amount it must deposit today to fund this liability will be $141,086,622.46
A company is involved in a lawsuit for which the contingent liability is remote. How should the liability be treated on the balance sheet?
a. It should be disclosed in the notes only.
b. It should not be recorded and need not be disclosed.
c. It should be recorded as a current liability.
d. It should be recorded as a long-term liability.
Answer:
b. It should not be recorded and need not be disclosed.
Explanation:
A contingent liability must be recorded in the balance sheet only if its outcome is very probable and the company can estimate its cost.
If the liability is only possible or its amount cannot be determined exactly, then it must be disclosed in the footnotes.
If the liability is only a remote outcome, or it is unlikely to happen, then it doesn't need to be recorded or disclosed.
What is the most important aspects of many businesses
0 / 1 pts Your firm has a potential project that will cost $5,000 now to begin. The project will then generate after-tax cash flows of $900 at the end of the next three years and then $1400 per year for the three years after that. If the discount rate is 8% then what is the PI
Answer:
PI=103.67%
Explanation:
Calculation for PI
To calculate PI (PROFITABILITY INDEX) the first step is to calculate the NPV ( Net present value) using Financial calculator by following the below step
CF0= -$5,000
C01=$900
FO1=3years
CO2= $1,400
FO2=3 years
NPV=?
I=8%
The next step is to enter the down arrow Cpt
Hence,
NPV = $183.48
Since we have know the NPV Now let calculate the PI using this formula
PI=(NPV+Potential project)/Potential project
Let plug in the formula
PI= ($183.48+$5,000)/$5,000
PI=$5,183.48/$5,000
PI= 1.03669*100
PI=103.67%
Therefore the PI will be 103.67%
PLEASE HELP!
Things of value provided by employers in addition to wages are ______. *
Answer:
Employee Benefits
Explanation:
Tallpenny Tower was built in 1985. However, the building has been constantly maintained and remodeled. In valuation terms, the building's _________ age is greater than the building's _________ age.
a) chronological age, effective age
b) effective age, chronological age
c) depreciated age, projected age
d) projected age, depreciated age
Answer:
a) chronological age, effective age
Explanation:
The chronological age of a building is simply how old it is in years: E.g. a house built in year 2000 is 20 years old.
The effective age of a building depends on the condition of the building and how well it has been maintained. E.g. two houses built on year 2000, but one has never gotten any type of maintenance and is really on a bad shape will have a higher effective age than the other house that has been continuously and properly maintained and repaired.
Under the ABC costing method,
a. departments are identified as activities.
b. activity rates are calculated by dividing the budgeted activity cost by the total activity-base usage.
c. the budgetary activity costs are assigned to products using factory overhead rates for each activity.
d. All of these choices are correct.
Answer:
d. All of these choices are correct.
Explanation:
Activity Based Costing system is the cost attribution to cost units (products) on the basis of benefits received from indirect activities, that is overheads that can not be allocated to a particular product or process.
So the process involves identifying activities driving the overheads. Determining the activity rates and assigning the costs using activity rate.
So, all the options given are applicable.
Walters manufactures a specialty food product that can currently be sold for $21.90 per unit and has 19,900 units on hand. Alternatively, it can be further processed at a cost of $11,900 and converted into 11,900 units of Deluxe and 5,900 units of Super. The selling price of Deluxe and Super are $31.10 and $19.90, respectively. The incremental income of processing further would be:_______.
a. $39,790.
b· $51,690.
c· $17,900.
d· $43,900.
e· $11,900.
Answer:
a. $39,790.
Explanation:
The computation of the incremental income of processing further is shown below:
Sales - Deluxe - 11,900 Units × $31.10 $370,090
Sales - Super - 5,900 Units × $19.90 $117,410
Total Sales $487,500 (a)
Further Processing Costs $11,900
Sale Price of speciality Food $435,810
19,900 Units × $21.90
Total $447,710 (b)
Net Incremental Income $39,790 (a - b)
Hence, the correct option is a.
Which type of data do companies collect from customers or potential customers?
A. Positioning data
B. Market share data
C. Primary data
D. Secondary data
Answer: Primary data
Explanation: There are essentially three different ways that companies collect data about their customers. By asking them directly for it, indirectly tracking them, and by acquiring it from other companies.
How can formal business documents help managers solve problems? A. By presenting well-organized, accurate information about a problem O B. By eliminating the need for schedules and budgets to track progress C. By making decisions so the managers do not have to handle them O D. By creating a record of every action taken during a meeting
Answer:
the answer is A
Explanation:
The process by which management plans, evaluates, and controls investments in fixed assets is called capital investment analysis.
a. True
b. False
Answer:
a. True
Explanation:
The process by which management plans, evaluates, and controls investments in fixed assets is called capital investment analysis. This process is also known as capital budgeting.
Generally, capital investment analysis or capital budgeting is used by business firms or governmental agencies to assess and measure the profitability of a long-term investment on a fixed asset such as real estate, machinery or factory equipments etc.
Hence, the management is able to choose the best option for investment after an assessment of which investment would yield a higher level of profits.
Connie’s employer provided her with a company vehicle that she is allowed to drive home.Connie is allowed to use the vehicle for personal use. What portion of the vehicle usage is taxable to Connie?
a) Connie’s business and personal use of the vehicle are taxable.
b) None of the vehicle usage is taxable to Connie.
c) Only the personal use portion that is not commuting to and from work is taxable.
d) Connie’s personal use of the vehicle is taxable.
Answer:
d) Connie’s personal use of the vehicle is taxable.
Explanation:
The IRS considers the following as personal use of a company's car:
commuting to and from work (it is your responsibility to get to work, not the company's)vacation useif a family member, friend or anyone else not employed by the company uses the carany trips that is not strictly for business purposes, and this includes trips for medical issuesPersonal use of a car company is considered a fringe benefit which is taxed as ordinary income.
Answer:
D
Explanation:
You have $425 today which is enough to buy 17 shirts. If the price of shirts are expected to increase by 2% over the next year, what (precise) nominal rate would you have to earn to be able to buy 20 shirts next year
Answer:
The precise nominal rate you have to earn to be able to buy 20 shirts next year is $510.
Explanation:
a) Data and Calculations:
Earnings today = $425
Number of shirts bought = 17
Therefore, the cost of each shirt = $425/17 = $25
If the price of shirts increases by 2%, the new cost will be $25.50 ($25 * 1.02)
This implies that to be able to buy 20 shirts next year, you will earn $510 ($25.50 * 20).
b) In this case, earnings are influenced by the number and price of shirts needed next year.
In 1882, the first group of immigrants to be excluded from the United States on the basis of their nationality were:______
a. Chinese.
b. Japanese.
c. Mexicans.
d. Slavs.
e. Irish.
Answer:
a. Chinese.
Explanation:
The first group of people that were excluded to their nationality were Chinese citizens. In the mid-1800's Chinese immigrants flooded into the United States as laborers in order to work on the transcontinental railroads that were being built. This influx of Chinese immigrants did not stop after the railroads were finished in 1862, and more and more Chinese immigrants kept coming into the US looking for a better life. This led to the US government passing the The Chinese Exclusion Act of 1882 in order to prevent any more Chinese citizens from immigrating into the US.
Consider a production function that only uses labor as its variable input, and all other inputs are fixed. Within this procution, it is optimal to hire labor units in the short run as long as:______.
1) value marginal product of labor is greater than wage.
2) marginal product of labor is less than product price.
3) average product of labor is greater than wage.
4) value marginal product of labor is less than product price.
Answer:
1) value marginal product of labor is greater than wage.
Explanation:
In the case when the labor is considered to be the variable input while the other inputs are considered to be fixed
So, the equation would be
VMPL = MPL x Output price
where,
VMPL = Function of labor demand
And, in the short run, the hiring is the optimum as bigger as VMPL as it is more than or equivalent to the wage rate
Therefore the correct option is 1.
1. Why do you think that there’s a huge gap in theory (what we know we should do) and practice (what we’re actually doing) of leadership development?
2. What are some reasons that companies might not be addressing Gen Y leadership development programs?
Answer:
1. Theories are based on assumptions. It is practice that verifies the underlying assumptions behind every theory, using real-life experiences. If theories are not put to use, they remain theories with untested assumptions.
2. The current leadership does not understand the millennials. The millennials are operating with tools that look too sophisticated for the current leadership. There is much confusion between what the Gen Y millennials want to achieve and the expected achievement targets being set by the current leadership. Leadership development programs for the Gen Y can only be implemented when misunderstanding is removed.
Explanation:
Leadership development includes all the processes that expand the capacities of individuals to perform in leadership positions by facilitating the execution of a company's strategy, building alignments, and winning mindsets while growing the capabilities of others to succeed the current leaders.
There is a more gap between the theory and the practice because the theories are totally based on the assumptions whereas the practice is fully depending on the theory.
Why there is a gap between theory and practice?(1).
There is a huge gap in theory and practice in the leadership style because the theories are established or fully founded on assumptions.
But in the practice, it confirms the implicit premises or assumptions behind every theory by using real experiences of life.
Its theories are not taken place, then the practice is also not works.
(2).
The cutting-edge management does now no longer recognize the time period.
The time period is run away with power train, that visual aspect too state-of-the-art for the cutting-edge management.
Leadership improvement packages for the Gen Y can handiest be carried out whilst false impression is removed.
There is a lot of confusion among what the Gen Y millennials need to accomplish, and the expected fulfillment targets being set through the cutting-edge management.
Therefore, there are the difference between the theory and practice.
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Reducto Co. pays a weekly payroll of $95,000 that includes federal taxes withheld of $12,000 FICA taxes withheld of $7,250, and retirement withholdings of $6,000. What is the effect on assets and liabilities from this transaction?
A. Assets decrease $71,310 and liabilities decrease $25,690.
B. Assets decrease $97,000 and liabilities decrease $71,310.
C. Assets decrease $71,310 and liabilities increase $25,690.
D. Assets decrease $97,000 and liabilities increase $97,000.
Answer: Assets decrease $69,750 and liabilities increase $25,250
Explanation:
Based on the scenario in the question, Decrease in assets will be calculated as:
= $95,000 - $12,000 - $7,250 - $6,000 = $69,750
Increase in liabilities will be calculated as:
= $12,000 + $7,250 + $6,000
= $25,250
The effect on assets and liabilities from this transaction is that assets decrease $69,750 and liabilities increase by $25,250
QUESTION 22 In a competitive market, A. no single buyer or seller can influence the price of the product. B. there are only a small number of sellers. C. the goods offered by the different sellers are unique. D. accounting profit is driven to zero as firms freely enter and exit the market.
Answer:
A
Explanation:
In a competitive market there are no single buyer or seller that can influence the price of the product.
Such a market has numerous producers who compete with each other to provide goods and services. Not one producer can influence the market prices by increasing his output or by decreasing it.
Same goes for the consumer. One consumer can not influence the prices either.
