Beer prices at major league baseball stadiums are usually much higher than prices at a bar or restaurant. This is mainly because

Answers

Answer 1

The question is incomplete:

Beer prices at major league baseball stadiums are usually much higher than prices at a bar or restaurant. This is mainly because

a. it costs the owners of the baseball teams more money to buy the beer from distributors

b. demand is much higher at a baseball game than at a bar

c. baseball team owners have market power and can change a higher price when they are the only sellers of beer

d. the government forces the owners of baseball teams to change price.

e. the owner's baseball teams are not profit maximizing

Answer:

c. baseball team owners have market power and can change a higher price when they are the only sellers of beer

Explanation:

The situation at the major league baseball stadiums is that the owner of the team is the only one that sells the beer which means that they have the power to establish the price they want as people won't have another option to buy the beer in the stadium and they will try to get as much benefits as possible by setting a high price. According to this, the answer is that this is mainly because baseball team owners have market power and can change a higher price when they are the only sellers of beer .

The other options are not right because the owners of the teams pay the same price for the beer as everyone else, the demand is not higher at the baseball game, the government doesn't regulate the prices and the owners are trying to get as much profits as possible.


Related Questions

Data mining is important because any customer can become a brand advocate or adversary by freely expressing opinions and attitudes that reach millions of other customers on social media.a. Trueb False

Answers

Answer: False

Explanation:

Dta mining is the generation of new information by examining large databases that are already in existence. In data mining, raw data will be eventually turned to useful information which will be used to increase sales, develop marketing strategies, and decrease costs.

The information that data mining is important because any customer can become a brand advocate or adversary by freely expressing opinions and attitudes that reach millions of other customers on social media is false.

Differentiate between team and teamwork

Answers

Team - A team is a group of individuals working together to achieve their goal(s).

Teamwork - Teamwork is the collaborative effort of a group to achieve a common goal or to complete a task in the most effective and efficient way. This concept is seen within the greater framework of a team, which is a group of interdependent individuals who work together towards a common goal.

(From Wikipedia)

Answer:

The correct answer is

Explanation:

Team: A group of people working together to achieve their goals.

Teamwork: A skill used by a group of people to achieve their required goal. It helps to finish the work perfectly and efficiently. It also shows that the members of that particular group are skillful and hard working.

Hope this helps....

Have a nice day!!!!

Disturbed Corp. needs to raise $57 million to fund a new project. The company will sell shares at a price of $23.70 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. The direct flotation costs associated with the issue are $725,000 and the indirect costs are $445,000. How many shares need to be sold?

Answers

Answer: 2653438 shares

Explanation:

From the information given in the question, the following can be deduced:

The share price will be:

= $23.70 × (1 - 7.5%)

= $23.70 × (1 - 0.075)

= $23.70 × 0.925

= $21.9225

The money that will be raised will be:

= 57,000,000 + 725,000 + 445,000

= $58,170,000

The number of shares that are needed to be sold will be:

= $58,170,000/$21.9225

= 2653438 shares

Beginning in 6 years, (beginning of years 6, 7,8 and 9) Sally Mander will receive four annual benefit checks of $12,000 each. If Sally assumes an interest rate of 7%, what is the present value of these checks?

Answers

Answer:

$28,980

Explanation:

The present value can be calculated by multiplying annual cashflows with the discount factor. The table to calculate the Present Value has been made below.

DATA

Annual benefit = $12,000

Discount rate = 7%

Present value =?

Calculation

Year      Cash inflows Discount factor Present Value

6            $12,000                   0.666              $7,992

7            $12,000                   0.623              $7,476

8            $12,000                   0.582              $6,984

9            $12,000                   0.544              $6,528  

Total                                                               $28,980

Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales in Units
April 70,000
May 85,000
June 110,000
July 90,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 15% of the following month’s sales. The inventory at the end of March was 10,500 units.
Required:
Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Sales in Units

April 70,000

May 85,000

June 110,000

July 90,000

Desired ending inventory= 15% of the following month’s sales.

The inventory at the end of March was 10,500 units.

To calculate the production required for each month, we need to use the following formula:

Production= sales + desired ending inventory - beginning inventory

April:

Sales= 70,000

Desired ending inventory= 85,000*0.15= 12,750

Beginning inventory= (10,500)

Total production= 72,250

May:

Sales= 85,000

Desired ending inventory= 110,000*0.15= 16,500

Beginning inventory= (12,750)

Total production= 88,750

June:

Sales= 110,000

Desired ending inventory= 90,000*0.15= 13,500

Beginning inventory= (16,500)

Total production= 107,000

Total quarter= 268,000

Based on the following information, calculate the variable overhead rate variance. Actual variable overhead cost $15,500 Actual hours used 4,200 Standard hours allowed 4,000 Standard variable overhead rate $3.75 per hour

Answers

Answer:

Rate variance = $250 favorable

Explanation:

The variable overhead rate variance is the difference between the actual variable cost and the standard variable overhead  cost the actual actual hours used.

We would compare the actual cost to the standard cost of the actual hours used . This is done below as follows:

                                                                                               $

4,200 hours should have cost (4200 × 3.75 )               15,750

but did cost                                                                       15,500

Rate variance                                                                      250  Favorable

Note the actual hours of 4,200 cost $250 less than it should be have cost . Hence the variance is favorable

Rate variance = $250

Assuming that the firm is maximizing profits, the marginal cost of the last unit produced equals:________

Price Quantity Total cost
10 10 80
9 20 100
8 30 130
7 40 170
6 50 230
5 60 300
4 70 380


a. $4
b. $40
c. $5
d. $50
e. $6

Answers

Answer: b. $40

Explanation:

A firm maximises its profits where Marginal Revenue equals marginal cost.

Marginal revenue is the additional revenue gained by selling one more unit of production.

At 40 units, the marginal revenue is equal to;

= Total revenue at 40 units - total revenue at 30 units

= ( 7 * 40) - ( 8 * 30)

= 280 - 240

= $40

At 40 units the marginal cost is;

= total cost at 40 units - total cost at 30 units

= 170 - 130

= $40

MR=MC which is $40.

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:
Net income $ 86,800
Depreciation expense 13,500
Gain on sale of land 6,800
Increase in merchandise inventory 3,550
Increase in accounts payable 7,650
A) $97,600.
B) $15,850.
C) $31,400.
D) $16,850.
E) $38,200

Answers

Answer:

A) $97,600

Explanation:

Calculation for the net cash provided or used by operating activities

OPERATING ACTIVITIES

Net Income $86,800

Depreciation Expense 13,500

Gain on Sale of Land (6,800)

Increase in Merchnadize Inventory (3,550)

Increase in Accounts Payable 7,650

Net Cash provided by Operations $97,600

Therefore the net cash provided or used by operating activities will be $97,600

An organization wants to reduce the possibility of outages when changes are implemented on the network. What should the organization use

Answers

Complete Question:

An organization wants to reduce the possibility of outages when changes are implemented on the network. What should the organization use?

A. Change management

B. Configuration management

C. Configuration management database

D. Simple Network Management Protocol

Answer:

A. Change management.

Explanation:

An organization wants to reduce the possibility of outages when changes are implemented on the network. What the organization should use is a change management.

You just won the lottery, which promises you $260,000 per year for the next 20 years, starting today (annuity due). If your discount rate is 7%, what is the present value of your winnings?

Answers

Answer:

the present value of your winnings will be $2,947,254.76.

Explanation:

The Present Value, PV of the Annuity due can be calculated as follows :

Pmt = $260,000

P/yr = 1

n = 20

r = 7%

Fv = $0

Pv = ?

Using a financial Calculator, the Present Value, PV of the Annuity due is $2,947,254.76

A(n) ____ is a computer-based information system designed to help knowledge workers select one of many alternative solutions to a problem.

Answers

Answer: decision support system (DSS)

Explanation:

A decision support system better known as (DSS) is a computer based program which is used to support or aid determinations, judgments, and courses of action been taken in an organization or a business. A DSS browses through and analyzes massive amounts of data, thereby compiling comprehensive information which can be used to solve problems and make important decisions in and organization or business.

Once a firm reaches the lowest point on the Long Run Average Total Cost Curve then the firm will automatically charge a lower prices for their product or service. The cost analysis model that we studied in Chapter 9 said that this is always the best strategy to effectively capture the maximum market share.
A- True
B- False

Answers

Answer:

B. False

Explanation:

As it is mentioned in the question that When a firm reaches a lowest point on the Long Run Average Total Cost Curve then it automatically charged a less price for the product and services they are rendering to the customer. But this lowest point deals in the only perfect competition also it would not capture the maximum market share but it would result into optimum production and goods supply at minimum price

According to the FTC's historical guidelines for mergers, would the FTC approve a merger between two firms that would result in an HHI of 1,025 after the merger?A: Maybe. The FTC would scrutinize the merger and make a case-by-case decision.B: Yes, the FTC would ignore the merger and allow it to go through.C: No, the FTC would probably challenge the merger.2. Instead of defining a market and counting up total sales, what are antitrust regulators looking at today when determining whether to allow a merger or not?A: HHIB: industry competitionC: four-firm concentration ratioD: innovation3. Price cap regulations are a market regulatory device governments utilize, where the top price a firm can charge is locked in for a defined period of time. All of the following statements are true, except:_________.A: The government sets a price by looking at the firm's average costs and then adding a normal rate of profit.B: The firm can make high profits by producing a higher quantity than expected.C: The firm can make high profits by producing at lower costs.D: The government sets a price level for a few years.

Answers

Answer and Explanation:

1. A: Maybe. The FTC would scrutinize the merger and make a case-by-case decision

the ftc would historically make a case-by-case decision for HHI( Herfindahl-Hirschman Index ) between 1000 and 1800 but nowadays antitrust enforcement agencies dontvdeoend much on ratios such as HHI in measuring competition but would rather perform in depth analysis of each industry under study

2.industry competition

Antitrust regulators look out for the level of competition in an industry in allowing mergers and rely more on case-by-case analysis in making it's evaluations

3.True

price cap regulations are used by government to control prices based on inflation levels or price cap index .price cap regulations set a cap on the price that can be charged by businesses for a product. They are set for a defined period of time.

4.A: The government sets a price by looking at the firm's average costs and then adding a normal rate of profit.

Government doesn't consider costs and normal rate of profit to the firm in setting price ceiling or floor for products

Costs that are capitalized because they are expected to have future value are called product costs; costs that are expensed are called period costs. This classification is important because it affects the amount of costs expensed in the income statement and the amount of costs assigned to inventory on the balance sheet. Product costs are commonly made up of direct materials, direct labor, and overhead. Period costs include selling and administrative expenses.

A service company has which of the following costs

a. Direct Material
b. Overhead Costs
c. Product Costs
d. Expensed in the period incurred

Answers

Answer:

b. Overhead Costs

d. Expensed in the period incurred

Explanation:

-Direct material refers to the cost of the material used to manufacture a product.

-Overhead costs are the costs related to the operation of the business and they can't be assigned to a good or service.

-Product Costs are the costs to manufacture a product.

-Expensed in the period incurred are the period costs which are costs not related to the production of a good.

According to these definitions, a service company has the following costs: overhead costs and expensed in the period incurred because these are costs that are not related to the creation of a product.

On the other hand, the other options direct material and product costs are not right because these costs are directly related to products.

The price of oil in the United States has been very volatile over the last 50​ years, with the real price of oil showing a few dramatic swings. When did these swings​ occur, and what can explain​ them? The first dramatic swing happened in the 1970s when there was a sharp ▼ drop rise in the real price of oil caused by ▼ a large financial crisis the formation of OPEC increased demand from emerging economies . The second swing happened in the 2000s when there was a sharp ▼ rise drop in the real price of oil caused by ▼ increased demand from emerging economies a large financial crisis the formation of OPEC . The most recent swing happened in 2008 when there was a sharp ▼ rise drop in the real price of oil caused by

Answers

Answer:

The first dramatic swing happened in the 1970s when there was a sharp rise in the real price of oil caused by the formation of OPEC.

In 1973, the World saw it's first oil spike when members of the Organization of Oil Exporting Countries (OPEC) being mostly Muslims, decided to punish the Western World for their perceived support of the Israelis in the Yom Kippur War. They placed an embargo on the sale of oil to the West and because they controlled 56% of the then World supply, this was enough to force the price of oil up due to the reduction in demand.

The second swing happened in the 2000s when there was a sharp rise in the real price of oil caused by increased demand from emerging economies.

From the early 2000s to 2008, the price of oil kept rising steadily till it reached around $147.30 in July 2008. This rise in prices was due to increased demand from newly industrialized and emerging nations like China that needed the oil to maintain their rapid growth.

The most recent swing happened in 2008 when there was a sharp drop in the real price of oil caused by a large financial crisis.

By December 2008, the price of oil had fallen to $32 and this was down to the global recession that was ravaging the World known as the Great Recession. As the world saw economic output fall, demand for oil decreased sharply thereby forcing the price of oil to fall dramatically.

Petrus Framing's cost formula for its supplies cost is $2,300 per month plus $6 per frame. For the month of March, the company planned for activity of 861 frames, but the actual level of activity was 856 frames. The actual supplies cost for the month was $7,790. The activity variance for supplies cost in March would be closest to:

Answers

Answer:

$30 Favorable

Explanation:

Calculation for the activity variance for supplies cost in March

Using this formula

Activity variance = (Actual units - Budgeted units) * Variable cost

Where,

Actual units=856

Budgeted units=861

Variable cost=$6

Let plug in the formula

Activity variance=(856-861) * $6

Activity variance=5*$6

Activity variance=$30 Favorable

Therefore the activity variance for supplies cost in March would be closest to: $30 Favorable

The practice of changing prices for products in real time in response to supply and demand conditions is referred to as

Answers

Answer:

Dynamic pricing

Explanation:

In simple words, Dynamic pricing, often alluded to as rising rates, vibrant pricing as well as period-based pricing, relates to the pricing technique under which companies set variable prices for goods or commodities on the basis of existing consumer demands. A main benefit of competitive pricing seems to be the opportunity to increase the income with each consumer.

Effects of fixed and variable cost behavior on the risk and rewards of business opportunities LO 11-2

Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $5,000 per course taught. Denton pays its instructors $250 per student enrolled in the class. Both universities charge executives a $450 tuition fee per course attended.


Required

Prepare income statements for Kenton and Denton, assuming that 20 students attend a course.

Kenton University embarks on a strategy to entice students from Denton University by lowering its tuition to $240 per course. Prepare an income statement for Kenton assuming that the university is successful and enrolls 40 students in its course.

Denton University embarks on a strategy to entice students from Kenton University by lowering its tuition to $240 per course. Prepare an income statement for Denton, assuming that the university is successful and enrolls 40 students in its course.

Prepare income statements for Kenton and Denton Universities, assuming that 10 students attend a course, and assuming that both universities charge executives a $450 tuition fee per course attended.

Answers

Answer and Explanation:

The Preparation of income statement of each point is shown below:-

 A.                           Kenton and Denton Universities

                                             Income Statement

Particulars                                   Kenton        Denton

Revenue (20 × $450)                  $9,000      $9,000

Less: Instruction fees

Per course fees                         $5,000

Per student fee (20 × $250)                           $5,000

Net income                                 $4,000         $4,000

B.                                          Kenton Universities

                                             Income Statement

Particulars                                   Kenton      

Revenue (40 × $240)                  $9,600

Less: Instruction fees

Per course fees                           $5,000

Net income                                  $4,600

C.                                           Denton Universities

                                             Income Statement

Particulars                                     Denton  

Revenue (40 × $240)                  $9,600

Less: Instruction fees

Per student fee (40 × $250)       $10,000

Net income                                  -$400

D.                            Kenton and Denton Universities

                                             Income Statement

Particulars                                   Kenton        Denton

Revenue (10 × $450)                  $4,500      $4,500

Less: Instruction fees

Per course fees                         $5,000

Per student fee (10 × $250)                           $2,500

Net income                                 -$500         $2,000

We simply deduct all the expenses from the revenue to arrive at net income and a net loss

Wookie Company issues 8%, five-year bonds, on January 1 of this year, with a par value of $108,000 and semiannual interest payments.

Semiannual Period-End Unamortized Premium Carrying Value
(0) January 1, issuance $8,271 $116,271
(1) June 30, first payment 7,444 115,444
(2) December 31, second payment 6,617 114,617
Use the above straight-line bond amortization table and prepare journal entries for the following:

a) The issuance of bonds on January 1.

b) The first interest payment on June 30.

c) The second interest payment on December 31.

Answers

Answer:

See the journal entries and explanation below.

Explanation:

The journal entries will look as follows

a) The issuance of bonds on January 1.

Date         Accounts title                              Debit ($)         Credit ($)  

Jan. 1        Cash                                              111,671

                   Premium on Bonds Payable                                8,271

                   Bonds Payable (w.1)                                        108,000

          (To record issuance of bonds.)                                                  

b) The first interest payment on June 30.

Date         Accounts title                                 Debit ($)         Credit ($)  

Jun. 30    Interest Expense (w.4)                       3,493  

                 Premium on Bonds Payable (w.2)      827

                 Cash (w.3)                                                                 4,320

               (To record first interest payment)                                              

c) The second interest payment on December 31.

Date         Accounts title                                 Debit ($)         Credit ($)  

Dec. 31    Interest Expense (w.4)                       3,493  

                 Premium on Bonds Payable (w.5)      827

                 Cash (w.6)                                                                 4,320

               (To record second interest payment)                                              

Workings:

w.1: Bond payable = Cash - Premium on Bonds Payable = $111,671 - $8,271

w.2: Premium on Bonds Payable = January 1 Unamortized Premium - June 30 Unamortized Premium = $8,271 - $7,444 = $827

w.3: Cash = $108,000 * 8% * (6 / 12) = $4,320

w.4: Interest expense = w.3 - w.2 = $4,320 - $827 = $3.493

w.5: Premium on Bonds Payable = June 30 1 Unamortized Premium - December 31 Unamortized Premium = $7,444 - $6,617 = $827

w.6: Cash = $108,000 * 8% * (6 / 12) = $4,320

w.7: Interest expense = w.6 - w.5 = $4,320 - $827 = $3,493

Domingo Corporation uses the weighted...
Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,300 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent Complete
Materials costs $7,400 50%
Conversion costs $3,600 20%
A total of 8,700 units were started and 8,000 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $160,600
Conversion costs $122,300
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. How many units are in ending work in process inventory in the first processing department at the end of the month?
a. 700.
b. 1,700.
c. 6.400.
d. 2,700.

Answers

Answer:

3,000 units

Explanation:

Calculation for How many units are in ending work in process inventory

Using this formula

Ending work in process units =Beginning work in process units + Units started into production - Transferred to the second processing department units

Let plug in the formula

Ending work in process units= 2,300 units + 8,700 units - 8,000 units

Ending work in process units= 3,000 units

Therefore 3,000 units are in the ending work in process inventory in the first processing department at the end of the month.

A company releases a? five-year bond with a face value of? $1000 and coupons paid semiannually. If market interest rates imply a YTM of 8%, which of the following coupon rates will cause the bond to be issued at a? premium?

A. 6%

B.10%

C. 8%

D. 5%

Answers

Answer: B.10%

Explanation:

For a bond to be issued at a premium, the Coupon rate needs to be higher than the current Market Yield to Maturity as this will cause the price of the bond to be higher than Par signifying that the bond is an attractive one.

If the Coupon rate is equal to the YTM then the bond will trade at Par.

If the Coupon rate is less than the YTM then the bond will trade at a discount.

Only 10% of the coupon rate will allow the bond by issued at a premium.

The coupon rate of a a bond refers to the amount of interest income earned each year based on the face value.

The yield to maturity of a band refers to the total estimated return if the bond is held until maturity.

When coupon rate is equal to YTM at issue, then, bond is issued at par value.

When coupon rate is lower than YTM at issue, then, bond is issued at a discount.

When coupon rate is higher than YTM at issue, then, bond is issued at a premium.

Therefore, the Option B is correct because only 10% of the coupon rate will allow the bond by issued at a premium

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brainly.com/question/17030252

The declaration, record, and payment dates in connection with a cash dividend of $77,000 on a corporation's common stock are October 1, November 7, and December 15.

Required:
Journalize the entries required on each date.

Answers

Answer:

Oct 1

Dr Cash Dividend $77,000

Cr Dividend Payable $77,000

Nov 7

No Entry required on the record date

Dec 15

Dr Dividend Payable $77,000

Cr Cash

Explanation:

Preparation of the Journal entries for each date

Based on the information given we were told that the cash dividend of the amount of $77,000 was a corporation's common stock are October 1, November 7, and December 15 which means that the transaction will be recorded as:

Oct 1

Dr Cash Dividend $77,000

Cr Dividend Payable $77,000

Nov 7

No Entry required on the record date

Dec 15

Dr Dividend Payable $77,000

Cr Cash

Torrid Romance Publishers has total receivables of $3,000, which represents 20 days’ sales. Total assets are $75,000. The firm’s operating profit margin is 5%. Find the firm's ROA and asset turnover ratio.

Answers

Answer:

Assets turnover ratio= 0.73

ROA= 3.65%

Explanation:

Torrid romance publishers have a total receivables of $3,000, it represents a 20 days sales

The total assets is $75,000

The operating profit margin is 5%

= 5/100

= 0.05

The first step is to calculate the total sales

= $3,000×365/20

= $3,000×18.25

= $54,750

The asset turnover ratio can be calculated as follows

= Total sales/Total assets

= $54,750/$75,000

= 0.73

The ROA can be calculated as follows

= Assets turnover ratio×operating profit margin

= 0.73×0.05

= 0.0365×100

= 3.65%

Hence the assets turnover ratio and ROA is 0.73 and 3.65% respectively.

Ink Inc. has a capital structure consisting of 25 percent debt and 75 percent common equity financing. The company has $800 million in net income and plans to pay out 40 percent of their earnings as dividends. What is the maximum amount of new financing that the company can raise without selling new common stock?

Answers

Answer:

$640 million

Explanation:

The computation of maximum amount of new financing is shown below:-

New financing from equity = $800 million × (1 - 40%)

= $480 million

New financing from debt = $480 million ÷ 75% × 25%

= $160 million

Now the maximum amount of new financing is

= $480 million + $160 million

= $640 million

Hence, the maximum amount of new financing is $640 million

Variable versus absorption costing Colorado Business Tools, manufactures calculators. Costs incurred in making 9,500 calculators in February included 29,450 of fixed manufacturing overhead. The total absorption cost per calculator was $10.25.

Required:

a. Calculate the variable cost per calculator.

b. The ending inventory of pocket calculators was 750 units higher at the end of the month than at the beginning of the month. By how much and in what direction (higher or lower) would operating income for the month of February be different under variable costing than under absorption costing?

c. Express the pocket calculator cost in a cost formula.

Answers

Answer:

Variable cost per unit = 7.15

Difference in profit = $2,325

Cost formula : Y =    3.1 + 7.15X

Explanation:

Variable cost per calculator =Full cost - Fixed cost per unit

Full cost= $10.25

Fixed cost per unit = Total fixed costs / Number of units

                          = $29,450/9,500 units= 3.1

Variable cost per calculator = $10.25 -  3.1  = 7.15

Difference in profit = OAR (fixed cost per unit)× change in inventory

                             = 3.1 × 750 = $2,325

The absorption costing profit would be higher if there is an increase in increase at the end of the period and vice versa. Hence , an increase in inventory by  750 units would mean that absorption costing profit is higher by $2,325

Cost of calculator

Y = a +bx

Y =    3.1 + 7.15X

Y- total cost per unit

Fixed cost per unit = 3.1

Variable cost per unit = 7.15

Variable cost per unit = 7.15

Difference in profit = $2,325

Cost formula : Y =    3.1 + 7.15X

Suppose you have ​$ cash today and you can invest it to become worth ​$ in years. What is the present purchasing power equivalent of this ​$ when the average inflation rate over the first years is ​% per​ year, and over the last years it will be ​% per​ year?

Answers

Answer: $900,599.04

Explanation:

The present purchasing power equivalent is the present worth of this investment.

The investment will earn 5% for the first 7 years and then 9% for the next 10.

As there are different rates, the present worth calculation will have to reflect that.

At the end of the first 7 years, the present worth of the invested amount given 10 more years of investing at 9%. The Present worth is;

= 3,000,000(Present worth factor, 9%, 10 years)

= 3,000,000 * 0.4224

= $1,267,200

Then what is the Present worth of $1,267,200 in the current year given that it will be invested for 7 years at 5% to get to $1,267,200.

= 1,267,200 (Present worth factor, 5%, 7 years)

= 1,267,200 * 0.7107

= $900,599.04

Internal rate of return method The internal rate of return method is used by Testerman Construction Co. in analyzing a capital expenditure proposal that involves an investment of $149,630 and annual net cash flows of $45,000 for each of the six years of its useful life. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Determine the internal rate of return for the proposal.

Answers

Answer:

Testerman Construction Co.

Internal rate of return method in analyzing capital expenditure:

Present value of expenditure = $149,630

Present of cash inflows annuity = $149,630 (using 20% discount rate and present value annuity factor of 3.3251 x $45,000)

NPV = $0 (PV of cash outflow - PV of cash inflow)

Therefore, the IRR = 20%

Explanation:

a) Data and Calculations:

Investment cost = $149,630

Annual net cash flows = $45,000

Investment period = 6 years

Annuity of future cash flows = 3.3251

b) Testerman’s IRR (Internal Rate of Return) is a capital budgeting and analysis tool which determines the discount rate that makes the present value of future inflows equal to the present value of outflows from a project.  This IRR helps the managers to determine the projects that add value and are worth undertaking.  IRR is based on assumptions.  Similar projects with the same IRR will differ in returns due to the differences in timing and the size of the cash, the amount of debts and equity used  to generate the returns, and the assumption of a constant reinvestment may which IRR makes.

In which of the following scenarios would enforcement of specific performance be appropriate? Multiple Choice Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute. You order a current-model, name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer.

Answers

Answer:

Correct Answer:

2. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons.

3. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.

1.  Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day.

Explanation:

In enforcement of specific performance is applied in situations where there there is an established contract that has was not honored. This bridge of contract would then trigger performance enforcement.

Nordquist Company's net income last year was $44,000. The company did not sell or retire any property, plant, and equipment last year. Changes in selected balance sheet accounts for the year appear below:
Increases
(Decreases)
Asset and Contra-Asset Accounts:
Accounts receivable $17,500
Inventory $(4,400)
Prepaid expenses $13,000
Accumulated depreciation $32,000
Liability Accounts:
Accounts payable $17,000
Accrued liabilities $(8,900)
Income taxes payable $3,500
Based solely on this information, the net cash provided by operating activities under the indirect method on the statement of cash flows would be:
a) $78,600
b) $113,700
c) $61,500
d) $26,500

Answers

Answer:

Explanation:

c) $61,500

   Particulars                                                      Amount$

Net Income                                                        44,000

Add Decrease in Inventory                                4,400

Add Accumulated Depreciation                       32,000

Add Increase in Accounts Payable                   17,000

Add Increase in Taxes Payable                         3,500

Less Increase in Accounts Receivables            (17500)

Less Increase in Prepaid Expenses                   (13,000)

Less Decrease in Accrued Liabilities                 (8,900)

Net cash provided by operating activities      $61,500

under the indirect method

A company with 99,006 authorized shares of $8 par common stock issued 48,828 shares at $13 per share. Subsequently, the company declared a 2% stock dividend on a date when the market price was $22 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

A. $43,563
B. $21,484
C. $7,812
D. $13,672

Answers

Answer:

$21,484

Explanation:

A company has 99,006 authorized shares of $8 par

The common stock was issued at 48,828 shares at the price of $13 for one share

The company made a 2% dividend declaration

= 2/100

= 0.02

The market price is $22 per share

Therefore, the amount that was transferred from the retained earnings account to the paid-in capital accounts can be calculated as follows

= 48,828 shares × 0.02 × $22

= $21,484

Hence the amount that was moved from the retained earnings account to the paid-in capital accounts as a result of stock dividend is $21,484

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