Answer:
$6 billion
Explanation:
Calculation to determine what consumption spending would initially decrease by
Using this formula
Decrease in Consumption spending=MPC * New taxes on household income
Let plug in the formula
Decrease in Consumption spending=0.6*$10 billion
Decrease in Consumption spending=$6 billion
Therefore consumption spending would initially decrease by $6 billion
Which of the following is the lowest priority of claims in bankruptcy?
A: Medical debts.
B: Mortgage on principal residence.
Answer:
( B ) Mortgage on principal residence
The claim that has the lowest priority when it comes to bankruptcy claims is B: Mortgage on principal residence.
Which debt has the lower priority?Medical debts have a high priority when a person goes bankrupt due to the importance attached to the health industry.
Mortgages on one's principal residence is lower than medical debts most likely because it is secured by the property.
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Database Systems is considering expansion into a new product line. Assets to support expansion will cost $970,000. It is estimated that Database can generate $2,060,000 in annual sales, with an 6 percent profit margin. What would net income and return on assets (investment) be for the year
Answer and Explanation:
The computation is shown below:
net income is
= sales × profit margin
= $2,060,000 × 0.06
= $123,600
And,
return on assets is
= net income ÷ total assests
= $123,600 ÷ $970,000
= 12.74%
In this way these two things should be calculated
and, the same should be considered
Laila is training new call center associates and wants to ensure they understand the required opening and closing call sequences. What is a good technique for her class of 20 new associates?A. Complete role play time with partnered employees. B. Have a quiz at the end of the session. C. Tell them and have the complete individual written scenarios. D. Use powerpoint slides for each separate concept.
Answer: D. Use PowerPoint slides for each separate concept.
Explanation:
These associates are completely new which means that they have to first be introduced to the required opening and closing call sequences. Several methods would therefore be inappropriate.
Complete roleplay for instance, would be bad for the situation as the associates would have no sequence to fall back on seeing as they are new. A quiz would also not work because it needs to be based on material learnt and individual written scenarios would be wrong as well because the goal is to teach them the company's required sequence not their own.
The best way would be to simply show them these sequences in a PowerPoint presentation.
Paris Corporation holds a $100,000 unrealized net capital gain and a capital loss carryforward that will expire in the current year. Paris is subject to a 14 percent cost of capital. Its marginal tax rate is 40 percent. Should Paris accelerate the recognition of this gain from next year to this year, assuming a net capital loss carryforward in each of the following amounts? Paris is subject to a 14 percent cost of capital. Its marginal tax rate is 40 percent.
a. $40,000
b. $10,000
c. Repeat parts a and b, but assume that Paris is subject to a 6 percent cost of capital.
Answer:
Hence the answer is given as follows,
Osvaldo makes $40,000 a year as a soccer coach. He also owns and rents out a small store for extra income of $60,000 a year. He wants to use the space for a Boba (Pearl tea) shop. His expenses at the boba shop would be $80,000 per ingredients and hiring a worker. He also would pay $20,000 per year in insurance. He would make $140,000 in revenues. What are his economic profits if he opens the ice cream store
Answer:
Osvaldo and Pearl Tea Shop
His economic profits if he opens the ice cream store is:
= ($20,000).
Explanation:
a) Data and Calculations:
Annual salary as a soccer coach = $40,000
Rent income from a small store = $60,000
Expenses for the Pearl tea shop
Ingredients and labor = $80,000
Insurance = 20,000
Total expenses = $100,000
Revenue from the Pearl Tea Shop = $140,000
Less total expenses 100,000
Less opportunity cost (rent income) 60,000
Economic loss = $20,000
His economic profits if Osvaldo opens the ice cream store is ($20,000).
What is economic profit?Economic profit is define as the difference between the revenue received from the sale of an output and the associated costs of all factors of production.
First we need to compute total expenses.
= Ingredients and labor + Insurance
= $80,000 + $20,000
= $100,000
Economic loss
= Revenue from the Pearl Tea Shop - Total expenses - opportunity cost (rent income)
= $140,000 - $100,000 - $60,000
= ($20,000)
Hence, Osvaldo economic profits if he opens the ice cream store is ($20,000)
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Asset cost $35,000Prepaid Insurance $5,000Maintenance costs $3,000Accumulated Depreciation $10,000Book Value $________Based on the information above, the book value of the tractor is __________.a) $33,000b) $43,000c) $25,000d) $28,000
Answer:
25000
Explanation:
Tonto Rain Shields sells 3 types of umbrellas. Umbrella A sells for $20 and has variable cost of $9.00 per unit. Umbrella B sells for $17.00 and has variable cost of $12.00 per unit. Umbrella C sells for $9.00 and has variable costs of $6.00 per unit. The company sells in a mix of 2 units of A, 3 units of B, and 5 units of C. What is the weighted average contribution margin per unit for Tonto
Answer:
$5.2
Explanation:
Weighted average Contribution margin = (Selling Price per unit - Variable Cost per unit) of the 3 umbrella / Number of Unit
Weighted average Contribution margin = [($20-$9)*2 + ($17-$12)*3 + ($9-$6)*5 ] / (2+3+5)
Weighted average Contribution margin = [$22 + $15 + $15] / 10
Weighted average Contribution margin = $52 / 10
Weighted average Contribution margin = $5.2
So, the weighted average contribution margin per unit for Tonto is $5.2
Which of the four costs relevant to aggregate production planning is the most difficult to accurately measure?
Answer:
Backordering Costs.
Explanation:
This is the correct answer I hope this helps.
The following four costs are included in the overall production plan:
initial production expensescosts related to variations in manufacturing rateKeeping inventory expenses.Costs of back ordering.What is aggregate production?An aggregate production function holds constant all other production factors, like as capital, natural resources, and technology, and connects the entire output of an economy to the total amount of labor engaged in that economy.
A stands for the technology component. It is a gauge of overall economic production. K represents the economy's entire non-human capital input. It is expressed in terms of money or monetary units. L represents the total workforce in the economy.
These are the four cost which are most difficult to measure aggregate production.
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Saving is a leakage in the sense that:______.
a. saving is lost to the economy and ultimately leads to stagnation.
b. it often accompanies a trade deficit.
c. consumers spend less than their total income.
d. the financial system often makes negative profits.
Answer:
The correct option is c. consumers spend less than their total income.
Explanation:
Saving is simply a portion of the total income that is not spent by the consumers on goods and services.
Saving is a non-consumption use of income which is leaked out of the circular flow of income and expenditure. Saving therefore makes the consumption lower than the total income.
Based on the explanation above, the correct option is c. consumers spend less than their total income.
1. The first step in preparing a cost of production report is to _____. compute equivalent units of production determine the units to be assigned costs determine the cost per equivalent unit allocate costs to units transferred out and partially completed units 2. The last step in preparing a cost of production report is to _____. compute equivalent units of production determine the units to be assigned costs determine the cost per equivalent unit allocate costs to units transferred out and partially completed units
Answer:
1. The first step in preparing a cost of production report is to _____.
compute equivalent units of production
2. The last step in preparing a cost of production report is to _____.
allocate costs to units transferred out and partially completed units
Explanation:
After determining the equivalent units of production, the total costs of production are determined. The next step is to determine the cost per equivalent unit by dividing the total costs by the equivalent units of production. Finally, the equivalent cost per unit is multiplied by the equivalent units for units transferred out and ending inventory (partially completed units).
Dorsey Co. has expanded its operations by purchasing a parcel of land with a building on it from Bibb Co. for $89,000. The appraised value of the land is $26,000, and the appraised value of the building is $92,000.
Required:
a. Assuming that the building is to be used in Dorsey Co.’s business activities, what cost should be recorded for the land?
b. Indicate why, for income tax purposes, management of Dorsey Co. would want as little of the purchase price as possible allocated to land. (Select all that apply.) Land is a current asset. Land is not a depreciable asset. Land value will not reduce taxable income. Land is a depreciable asset. Land value reduces taxable income.
c. Indicate why Dorsey Co. allocated the cost of assets acquired based on appraised values at the purchase date rather than on the original cost of the land and building to Bibb Co. Appraised values are to be used because they represent the historical asset value. Appraised values are to be used because they represent the book value. Appraised values are to be used because they represent the asset's current value.
d. Assuming that the building is demolished at a cost of $11,000 so the land can be used for employee parking, what cost should Dorsey Co. record for the land?
Answer:
a. Cost of land = $19,610.17
b. Correct options are:
Land is not a depreciable asset.
Land value will not reduce taxable income.
c. Appraised values are to be used because they represent the asset's current value.
d. Cost of Land = $100,000
Explanation:
a. Assuming that the building is to be used in Dorsey Co.’s business activities, what cost should be recorded for the land?
Total appraised value = Appraised value of the land + Appraised value of the building = $26,000 + $92,000 = $118,000
Cost of land = Purchase price * (Appraised value of the land / Total appraised value) = $89,000 * ($26,000 / $118,000) = $19,610.17
b. Indicate why, for income tax purposes, management of Dorsey Co. would want as little of the purchase price as possible allocated to land. (Select all that apply.)
Correct options are:
Land is not a depreciable asset. Note that an asset that is NOT eligible for tax and accounting purposes to register depreciation in compliance with Internal Revenue Service (IRS) rules is considered NOT to be depreciable property. Since land s NOT eligible for tax and accounting purposes to register depreciation, it therefore not a depreciable asset.
Land value will not reduce taxable income. This due to the fact that land is not a depreciable asset as stated above.
c. Indicate why Dorsey Co. allocated the cost of assets acquired based on appraised values at the purchase date rather than on the original cost of the land and building to Bibb Co.
Appraised values are to be used because they represent the asset's current value.
The current value of an asset is the price at which it can be sold or settled as of the current date.
d. Assuming that the building is demolished at a cost of $11,000 so the land can be used for employee parking, what cost should Dorsey Co. record for the land?
Since it is assumed that the building is demolished, the addition of the purchase price and the cost of demolition will be recorded as the cost of land. This is because the demolition cost is the expense of preparing the land for its intended use. Therefore, we have:
Cost of Land = Purchase price + Cost of demolition = $89,000 + $11,000 = $100,000
A contingent liability can be classified as all of the following except for a.Certain b.Probable c.Remote d.Reasonably possible
Answer: D
Explanation:
A contingent liability can be classified as probable, possible, and remote. Thus, option D is correct.
What is the contingent liability?The contingent liabilities are liabilities that an entity may incur based on the outcome of an uncertain future event, such as the outcome of a pending lawsuit.
Contingent liabilities are also important for potential lenders to a company, who will consider these liabilities when determining lending terms.
A contingent liability is a potential future liability, such as pending lawsuits or honouring product warranties. If the liability is likely to occur and the amount can be reasonably estimated, it should be recorded in a company's accounting records.
Therefore, There are three types of contingent liabilities: probable, possible, and remote. So, option D is correct.
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XYZ Co. expects to sell 26,000 pools for $15 each. Direct materials cost is $3 per pool, direct labor cost is $5 per pool, and manufacturing overhead cost is $1.62 per pool. The following inventory levels apply to 2019: Beginning inventory Ending inventory Direct materials 20,000 units 22,000 units Work-in-process inventory 0 units 100 units Finished goods inventory 1,800 units 2,600 units How many pools need to be produced in 2019
Answer:
250120
Explanation:
Total pools is equal to 26,000
Directable cost is equal to $5 per pool
Manufacturing overhead equals 1.62 dollars per pool
Direct costes equals $3 per pool
We add up this costs
5+1.62+3 = 9.62 dollars in total
In 2019 the total amount of pools that needs to be produced can be gotten by multiply 26000 with 9.62
26000x9.62
= 250,120
The following costs were incurred in May:
Direct materials $42,200
Direct labor $32,800
Manufacturing overhead $25,400
Selling expenses $18,800
Administrative expenses $40,200
Conversion costs during the month totaled: __________
Answer:
the conversion cost is $58,200
Explanation:
The computation of the conversion cost is shown below:
The conversion cost is
= Direct Labor + Manufacturing Overhead
= $32,800 + $25,400
= $58,200
Hence, the conversion cost is $58,200
It is the combination of the direct labor and the manfacturing overhead
The price elasticity of gasoline supply in the United States is 0.4. If the price of gasoline rises by 8%, what is the expected change in the quantity of gasoline supplied in the United States?
A. 3.2%
B. + 0.32%
C. + 32.0%
D. + 3.2%
Answer:
a
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
0.4 == quantity / 8
3.2%
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases
Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.
Selected accounts with some amounts omitted are as follows: Work in Process Oct. 1 Balance 23,000 Oct. 31 Goods finished X 31 Direct materials 94,300 31 Direct labor 194,900 31 Factory overhead X Finished Goods Oct. 1 Balance 14,700 31 Goods finished 329,500 If the balance of Work in Process on October 31 is $203,500, what was the amount of factory overhead applied in October? a.$94,300 b.$220,800 c.$421,400 d.$194,900
Answer:
b.$220,800
Explanation:
Calculation to determine what was the amount of factory overhead applied in October
Finished goods during October $ 329,500
Add: Balance of work in progress on October 31 $203,500
Less: Balance of work in progress on October 1 (23,000)
Less: Direct Materials $(94,300)
Less: Direct Labor ($194,900)
Factory Overhead applied in October $$220,800
Therefore the amount of factory overhead applied in October is $220,800
A company issues $17200000, 9.8%, 20-year bonds to yield 10% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $16904864. What is interest expense for 2021, using straight-line amortization
Answer:
$1,691,122
Explanation:
First, calculate the discount on the bond
Discount on the bond = Face value of bond - Proceeds from the bond = $17,200,000 - $16,904,864 = $295,136
Now prepare the bond amortization table
The Bond amortization table is attached with this answer please find that
Now calculate the Interest expense for 2021
Interest Expense = Interest Expense on June 30, 2021 + Interest Expense on December 31, 2021
Interest Expense = $845,493.63 + $845,628.31
Interest Expense = $1,691,121.94
Interest Expense = $1,691,122
Sales and purchase-related transactions using perpetual inventory system The following were selected from among the transactions completed by Essex Company during July of the current year. Essex uses the net method under a perpetual inventory system. July 3. Purchased merchandise on account from Hamling Co., list price $77,000, trade discount 25%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $920 added to the invoice. 5. Purchased merchandise on account from Kester Co., $44,400, terms FOB destination, 2/10, n/30. 6. Sold merchandise on account to Parsley Co., $15,810, terms n/15. The cost of the goods sold was $9,370. 7. Returned merchandise with an invoice amount of $12,750 purchased on July 5 from Kester Co. 13. Paid Hamling Co. on account for purchase of July 3. 15. Paid Kester Co. on account for purchase of July 5, less return of July 7. 21. Received cash on account from sale of July 6 to Parsley Co. 21. Sold merchandise on MasterCard, $248,000. The cost of the goods sold was $130,940. 22. Sold merchandise on account to Tabor Co., $53,800, terms 2/10, n/30. The cost of the goods sold was $35,600. 23. Sold merchandise for cash, $37,930. The cost of the goods sold was $20,540. 28. Paid Parsley Co. a cash refund of $6,420 for returned merchandise from sale of July 6. The cost of the returned merchandise was $2,990. 31. Paid MasterCard service fee of $3,850. Required: Journalize the transactions.
Answer:
Essex Company
Journal Entries:
July 3. Debit Inventory $57,515
Credit Accounts payable (Hamling Co.) $57,515
To record the purchase of inventory at list price of $77,000, trade discount 25%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $920 added to the invoice.
July 5. Debit Inventory $43,512
Credit Accounts payable (Kester Co.)
To record the purchase of goods on account at list price of $44,400, terms FOB destination, 2/10, n/30.
July 6. Debit Accounts receivable (Parsley Co.) $15,810
Credit Sales revenue $15,810
To record the sale of goods on credit terms n/15.
Debit Cost of goods sold $9,370
Credit Inventory $9,370
To record the cost of goods sold.
July 7. Debit Accounts payable (Kester Co.) $12,495
Credit Inventory $12,495
To record the return of goods with invoice amount of $12,750 purchased on July 5 from Kester Co.
July 13. Debit Accounts payable (Hamling Co.) $57,515
Credit Cash $57,515
To record the payment on account
July 15. Debit Accounts payable (Kester Co.) $31,017
Credit Cash $31,017
To record the payment on account.
July 21. Debit Cash $15,810
Credit Accounts receivable (Parsley Co.) $15,810
To record the receipt of payment on account.
July 21. Debit Cash (MasterCard) $248,000
Credit Sales revenue $248,000
To record the sale of goods on account.
Debit Cost of goods sold $130,940
Credit Inventory $130,940
To record the cost of goods sold.
July 22. Debit Accounts receivable (Tabor Co.) $52,724
Credit Sales revenue $52,724
To record the sale of goods on account with invoice of $53,800 terms 2/10, n/30.
Debit Cost of goods sold $35,600
Credit Inventory $35,600
To record the cost of goods sold.
July 23. Debit Cash $37,930
Credit Sales revenue $37,930
To record the sale of goods for cash.
Debit Cost of goods sold $20,540
Credit Inventory $20,540
To record the cost of goods sold.
July 28. Debit Sales returns $6,420
Credit Cash (Parsley Co.) $6,420
To record the refund for returned goods.
Debit Inventory $2,990
Credit Cost of goods sold $2,990
To record the cost of goods returned.
July 31. Debit Service fee (MasterCard) $3,850
Credit Cash $3,850
To record the service fee paid to MasterCard.
Explanation:
a) Data and Analysis:
July 3. Inventory $57,515 Accounts payable (Hamling Co.) $57,515 list price $77,000, trade discount 25%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $920 added to the invoice.
July 5. Inventory $43,512 Accounts payable (Kester Co.)
$44,400, terms FOB destination, 2/10, n/30.
July 6. Accounts receivable (Parsley Co.) $15,810 Sales revenue $15,810
terms n/15.
Cost of goods sold $9,370 Inventory $9,370
July 7. Accounts payable (Kester Co.) $12,495 Inventory $12,495
invoice amount of $12,750 purchased on July 5 from Kester Co.
July 13. Accounts payable (Hamling Co.) $57,515 Cash $57,515
July 15. Accounts payable (Kester Co.) $31,017 Cash $31,017
July 21. Cash $15,810 Accounts receivable (Parsley Co.) $15,810
July 21. Cash (MasterCard) $248,000 Sales revenue $248,000
Cost of goods sold $130,940 Inventory $130,940
July 22. Accounts receivable (Tabor Co.) $52,724 Sales revenue $52,724 $53,800 terms 2/10, n/30.
Cost of goods sold $35,600 Inventory $35,600
July 23. Cash $37,930 Sales revenue $37,930
Cost of goods sold $20,540 Inventory $20,540
July 28. Sales returns $6,420 Cash $6,420
Inventory $2,990 Cost of goods sold $2,990
July 31. Service fee (MasterCard) $3,850 Cash $3,850
Steve is part of a production team that has researched and chosen a new manufacturing process to improve product quality. He has discovered data that disputes some of the claims of the production team but decides to ignore the information and support the team's original decision. Steve is being adversely influenced by
Answer: groupthink
Explanation:
Following the information given in the question, it can be deduced that Steve is being adversely influenced by groupthink.
Groupthink is when a group of people reach a consensus and agree on a particular thing without thinking about other alternatives or the consequences. Groupthink is typically based on the desire not to upset others. In this case, Steve doesn't want to upset and dispute the claims of others.
Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2018 fiscal year was $664,000. Depreciation and amortization expense of $95,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash:
Decrease in accounts receivable $30,000
Increase in inventories 10,000
Increase prepaid expenses 9,300
Increase in salaries payable 10,800
Decrease in income taxes payable 19,000
Required:
Prepare the operating activities section of the 2018 statement of cash flows.
Answer:
Net cash flow from operating activities $761,500
Explanation:
The preparation of the operating activities section is as follows;
Net income $664,000
Add: depreciation & amortization $95,000
Add: Decrease in accounts receivable $30,000
Less: Increase in inventories 10,000
Less: Increase prepaid expenses 9,300
Add: Increase in salaries payable 10,800
Less: Decrease in income taxes payable 19,000
Net cash flow from operating activities $761,500
DMC Company manufactures a standard and a custom version of a boat engine. Overhead costs include a significant amount of indirect labor and other costs related to moving materials and setting up machines for each batch of engines that are produced. The rest of the overhead is mostly facility-based. The actual activity for a year was as follows:
Total Standard engines Custom engines
Engines produced 3,000 2,500 500
Machine hours 6,000 4,800 1,200
Batches of products 200 100 100
DMC has used machine hours in the past to allocate all overhead costs. Which of the following statements is true given the data above, if DMC used machine hours as the allocation base for the current year?
a. DMC under allocated overhead costs to the standard engines.
b. DMC paid more for overhead costs than if it used activity-based costing.
c. DMC over allocated the overhead costs to the standard engines.
Answer:
Hence the correct option is option c. DMC over-allocated the overhead costs to the standard engines.
Explanation:
DMC over-allocated the overhead costs to the quality engines
All overheads have now been allocated within the ratio of machine-hours used i.e. 4:1
If however, ABC system were used, overheads associated with found out would are allocated within the ratio of batches i.e. 1:1
And hence, more overheads would are allocated to custom engines and fewer to plain engines.
The amount purchased overheads will remain equivalent. The systems are only used for the allocation of overheads.
Holmes Company produces a product that can be either sold as is or processed further. Holmes has already spent $96,000 to produce 2,425 units that can be sold now for $81,500 to another manufacturer. Alternatively, Holmes can process the units further at an incremental cost of $255 per unit. If Holmes processes further, the units can be sold for $415 each. Should Holmes sell the product now or process it further
Answer: Holmes should process it further to make a profit of $306,496
Explanation:
If Holmes sells now, the selling price would be:
= Amount sold for / No. of units
= 81,500 / 2,425
= $33.61
If the company processes further and sells at $415, they will get a profit per unit of:
= 415 - 255
= $160 per unit
Incremental revenue is:
= (160 - 33.61) * 2,425 units
= $306,495.75
Holmes should process it further.
a businessA business-level strategy is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in:
Answer: specific product market
Explanation:
The aim of a business level strategy is to provide a business with a competitive advantage. It should be noted that a business level strategy is selected according to the strengths and the weaknesses of the products of the company's and based on how the company wants to be perceived by the customers.
The main types of the business level strategy that's utilized is differentiation, cost Leadership, and focus strategies.
Brooke left Mauve Inc. after working in the company for five years. On her last day at work, Lucas, the company's HR Manager, conducted an interview with Brooke asking her to explain the reasons for leaving the organization. Brooke told Lucas that she did not see any career growth in the organization. After the interview, Lucas summarized this information and communicated it with Brooke's managers. Which of the following types of interviews did Lucas conduct in this scenario?
A. An appraisal interview.
B. A job interview.
C. An exit interview.
D. A stay interview.
Answer:
Mauve Inc.
The interview that Lucas conducted in this scenario is:
C. An exit interview.
Explanation:
Since Brooke is leaving Mauve Inc. after working for five years, any interview at this stage is called an exit interview. The essence of such an interview, which is actually the opposite of a job interview, is to ascertain the reasons Brooke decides to leave the company. It provides an opportunity to learn about how an employee feels about her work with the company, including relationships with team members and impressions about the company's working conditions.
Estimated sales units are based on which of the following?
Level of sales
The future inventory
Level of taxes
Net cost to sales
Answer:
Level of sales
Explanation:
Estimated sales units are based on the level of sales already made.
This is because, in business, estimated sales can be predicted or discovered based on demand of those particular products.
Therefore, if a product is in high or low demand, then an estimated sales unit can be made based on this information.
If you place a stop-loss order to sell 100 shares of stock at BDT 55 when the current price is BDT 62, how much will you receive for each share if the price drops to BDT 50?
Answer:
55 per share
Explanation:
A stop-loss is used to immediately sell a stock when it goes down to a certain point. In this example, 50 is beneath 55 so as BDT heads towards 50 it will reach 55. At 55, the selling begins and thus the investor gets 55 per share.
A company purchased $2,000 of merchandise on August 15 with terms 1/10, n/30. On August 17, it returned $200 worth of merchandise. On August 18, it paid the amount due. The amount of the cash paid on August 18 equals:________
a. $2,000.
b. $1,800
c. $1,782
d. $1,620.
e. $1,260.
The amount of the cash paid is $1,782
Let understand the question aims to solve the amount of cash paid for purchase of a merchandise $2,000, there is also some return of the merchandise worth $200.
On Aug 15, Purchase merchandise $2,000, On Aug 17, Return merchandise $200, Discount = 1%Amount of cash paid = ($2,000 - $200) - 1% discount
Amount of cash paid = $1,800 - ($1,800)*1%
Amount of cash paid = $1,800 - $18
Amount of cash paid = $1,782
In conclusion, on August 18, the amount of the cash paid is $1,782.
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Mullis Corp. manufactures DVDs that sell for $5.10. Fixed costs are $33,000 and variable costs are $3.60 per unit. Mullis can buy a newer production machine that will increase fixed costs by $17,600 per year, but will decrease variable costs by $0.80 per unit. What effect would the purchase of the new machine have on Mullis' break-even point in units
Answer:
The break even point in units will changed
Explanation:
Calculation to determine What effect would the purchase of the new machine have on Mullis' break-even point in units
First step is to compute the break even point
Break even point
= (Fixed cost) ÷ (Contribution margin per unit)
Where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
Contribution margin per unit= $5.10 - $3.60
Contribution margin per unit= $1.50
And, the fixed cost is $33,000
Hence,the break even point would be
Break even point= ($33,000) ÷ ($5.10 - $3.60)
Break even point= $33,000 ÷ $1.50
Break even point= 22,000 units
Assuming the VARIABLE COST per unit is DECREASED and the FIXED COST is INCREASED the break even would be:
Break even= (Fixed cost) ÷ (Contribution margin per unit)
Where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
Contribution margin per unit = $5.10 - ($3.60-$0.80)
Contribution margin per unit = $5.10 - $2.80
Contribution margin per unit = $2.30
And, the fixed cost =$33,000 + $17,600
Fixed cost = $50,600
So, the break even point would be
= ($50,600) ÷ ($5.10 - $2.30)
= $50,600 ÷ $2.80
= 18,071 units
The break even point in units will changed
Find the compound amount for the deposit. Round to the nearest cent. $15,000 at 8% compounded semiannually for 10 years
Answer:
$17,866.85
Explanation:
Use the following formula to calculate the compound amount
Compound Amount = Future value of deposit - Initial deposit
Where
Future value of deposit = Initial Deposit x ( 1 + Periodic interest rate )^numbers of compounding periods = $15,000 x ( 1 + ( 8% x 6/12 ) )^(10 x 12/6 ) = $32,866.85
Initial Deposit = $15,000
Placing values in the formula
Compound Amount = $32,866.85 - $15,000
Compound Amount = $17,866.85
A U.S. investor has borrowed pounds, converted them to dollars, and invested the dollars in the United States to take advantage of interest rate differentials. To cover the currency risk, the investor should:
Answer: C. Buy pounds forward.
Explanation:
The investor borrowed in pounds which means that they would have to pay back in pounds. They would therefore need pounds at the end of the investment period but need to be sure of the rate they are converting back to so as to reduce currency risk.
The way to cater for this risk would be to buy pounds in the forward market at a guaranteed rate so that when they are to pay back the pounds, they buy it at the rate they agreed to in the forward market, regardless of what the rate is in the spot market when they want to pay back the pounds.
