(w₁X + w₂Y - I) represents the budget constraint. By solving the Lagrangian optimization problem, we can find the optimal values of X and Y that maximize the consumer's utility while satisfying the budget constraint.
The consumer's budget constraint can be derived from the total income and the share of expenditure on good X. The FOC (First-Order Condition) for optimal consumption choice can be obtained by setting up a Lagrangian optimization problem.
1. The consumer's budget constraint can be written as follows:
For country 1: w₁X₁ + w₂Y₁ = I₁
For country 2: w₁X₂ + w₂Y₂ = I₂
Here, w₁ and w₂ represent the prices of goods X and Y, respectively, while I₁ and I₂ represent the total income of the consumer in each country.
2. To derive the FOC for optimal consumption choice, we need to set up a Lagrangian optimization problem. The Lagrangian function can be defined as follows:
L(X,Y,λ) = XY¹-8 + λ(w₁X + w₂Y - I)
Here, λ is the Lagrange multiplier, and (w₁X + w₂Y - I) represents the budget constraint.
To find the optimal consumption choice, we differentiate the Lagrangian function with respect to X, Y, and λ, and set the derivatives equal to zero: ∂L/∂X = Y¹-8 + λw₁ = 0
∂L/∂Y = X - 8Y¹-7 + λw₂ = 0
∂L/∂λ = w₁X + w₂Y - I = 0
Solving these equations simultaneously will give us the FOC for optimal consumption choice, which represents the condition for utility maximization subject to the budget constraint.
By solving the Lagrangian optimization problem, we can find the optimal values of X and Y that maximize the consumer's utility while satisfying the budget constraint.
These FOCs provide the necessary conditions for determining the optimal consumption bundle given the consumer's preferences and income.
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at crayola, the majority of its raw material suppliers were located within a few hours of the processing facility. describe if this would have a positive or negative effect on pipeline inventory for crayola. show a formula to justify your response.
Having the majority of raw material suppliers located within a few hours of the processing facility would have a positive effect on pipeline inventory for Crayola. The formula to justify this response is: Pipeline Inventory = Lead Time + Transit Time
Pipeline inventory refers to the inventory that is currently in transit or being transported from suppliers to the processing facility. The shorter the distance between suppliers and the processing facility, the lower the time it takes for raw materials to reach the facility.
This results in reduced lead time and transit time, which in turn decreases the pipeline inventory. The formula to justify this response is:
Pipeline Inventory = Lead Time + Transit Time
When the lead time and transit time are minimized due to close proximity between suppliers and the processing facility, the pipeline inventory decreases. This is advantageous for Crayola as it helps to streamline the supply chain, reduce costs associated with inventory holding, and improve overall operational efficiency.
In conclusion, having suppliers located within a few hours of the processing facility has a positive effect on pipeline inventory for Crayola. It enables faster delivery of raw materials, reduces lead time and transit time, and ultimately leads to a more efficient supply chain management process.
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Shippers and 3PL providers strive towards reducing costs, securing more profits, which may not adhere with various environmental concerns. O True O False In the push system production orders begin upo
The given statement, "Shippers and 3PL providers strive towards reducing costs, securing more profits, which may not adhere with various environmental concerns" is True.
This statement explains that Shippers and 3PL providers may not consider environmental concerns while trying to reduce costs and increasing their profit.Increasing environmental concerns about the impact of logistics operations have highlighted the need for logistics to become more sustainable. Shippers are trying to respond to environmental concerns by changing their logistics practices. According to a study, shippers have started making logistics decisions that are environmentally friendly, such as changing the transportation mode or investing in new transportation equipment.
The involvement of 3PL providers (third-party logistics providers) in logistics operations has a considerable impact on the sustainability of logistics operations. The 3PL providers also aim to increase their profit and reduce costs. Thus, the cooperation between shippers and 3PL providers must involve ensuring the sustainability of logistics operations. Therefore, the given statement is True.In 200 words, Shippers and 3PL providers strive towards reducing costs, securing more profits, which may not adhere to various environmental concerns.
With the environmental concerns about the impact of logistics operations, the logistics industry is becoming more sustainable. Shippers and 3PL providers are taking several steps to address these environmental concerns.The shippers have started making logistics decisions that are environmentally friendly, such as changing the transportation mode or investing in new transportation equipment. For example, some shippers are replacing road freight with more environmentally friendly rail freight or are using hybrid or electric trucks for their transportation operations.The involvement of 3PL providers in logistics operations has a significant impact on the sustainability of logistics operations. The 3PL providers also aim to increase their profit and reduce costs.
However, the cooperation between shippers and 3PL providers must involve ensuring the sustainability of logistics operations.The implementation of green logistics practices may increase the costs, but this may also increase the efficiency of logistics operations. Moreover, implementing green logistics practices can improve the public image of the shippers and 3PL providers. Thus, shippers and 3PL providers should address environmental concerns and take steps towards becoming more sustainable.
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Question 20 2 pts During a detention hearing, a juvenile will be informed if their case will be waived to adult court. O True O False D Question 21 2 pts What is the purpose of a disposition hearing? Having a judge or jury try the case Informing the juvenile of their rights and getting their plea Decide whether the youth should be allowed to remain in the community, or be placed in a secure facility while awaiting trial It takes place after the youth is found guilty, and it is where treatment decisions are made 2 pts D Question 22 Juveniles in court are not entitled to the same due process rights as adults in court. True False
Question 20:During a detention hearing, a juvenile will be informed if their case will be waived to adult court. The statement is True.Question 21:The purpose of a disposition hearing is to decide whether the youth should be allowed to remain in the community, or be placed in a secure facility while awaiting trial.
The answer is Option C. Juvenile court judges hold a disposition hearing after a youth has been found guilty or has admitted guilt for the offense. A disposition hearing is a fact-finding process in which a judge determines the most appropriate and just outcome for a juvenile offender's case.Question 22:Juveniles in court are not entitled to the same due process rights as adults in court. The statement is False.
Juveniles in court are entitled to many of the same due process rights as dispositioin court. However, the nature and extent of these rights may vary depending on the state in which the juvenile court is situated, the seriousness of the charges, and the age of the offender.
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The statement that during a detention hearing, a juvenile will be informed if their case will be waived to adult court, is False.
The purpose of a disposition hearing is C. Decide whether the youth should be allowed to remain in the community, or be placed in a secure facility while awaiting trial
The statement that Juveniles in court are not entitled to the same due process rights as adults in court. is False.
What is the purpose of a disposition hearing ?The purpose of a disposition hearing is to determine the appropriate disposition or outcome for a juvenile's case. This includes deciding whether the youth should be allowed to remain in the community, placed in a secure facility while awaiting trial, or receive specific treatment or rehabilitative services.
Juveniles in court are entitled to due process rights, although they may differ in certain aspects from the rights afforded to adults.
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You have the following investment opportunities with an initial investment outlay of R375 000.00: Interest rate Investment A 11.86% Investment B 14.06% Investment C 11.25% Investment D 10.00% REQUIRED: Normal view Formula view Year 0 375 000 375 000 375 000 375 000 Year 1 Year 2 Year 3 - Year 4 the above in an Excel workbook and calculate the future value of each of the investment opportunities by making use of Excel formulas. Give your answer in: 100,000 100,000 100,000 100,000 22,500 100,000 37,500 15,000 150,000 100,000 37,500 100,000 (4 marks) (4 marks) Based on the calculations, which will be the best investment opportunity and why? (2 marks)
It outperforms the other investment opportunities due to its higher interest rate of 14.06%. Therefore, investing in Investment B would yield the best returns compared to the other options.
Based on the provided information, the best investment opportunity would be Investment B with an interest rate of 14.06%. Here's the step-by-step explanation:
1. Calculate the future value of Investment A:
- Year 1: 375,000 + (375,000 * 11.86%) = 420,975
- Year 2: 420,975 + (420,975 * 11.86%) = 470,985.57
- Year 3: 470,985.57 + (470,985.57 * 11.86%) = 525,812.79
- Year 4: 525,812.79 + (525,812.79 * 11.86%) = 585,897.58
2. Calculate the future value of Investment B:
- Year 1: 375,000 + (375,000 * 14.06%) = 428,625
- Year 2: 428,625 + (428,625 * 14.06%) = 489,145.88
- Year 3: 489,145.88 + (489,145.88 * 14.06%) = 556,900.24
- Year 4: 556,900.24 + (556,900.24 * 14.06%) = 632,636.46
3. Calculate the future value of Investment C:
- Year 1: 375,000 + (375,000 * 11.25%) = 417,187.50
- Year 2: 417,187.50 + (417,187.50 * 11.25%) = 464,990.63
- Year 3: 464,990.63 + (464,990.63 * 11.25%) = 519,238.07
- Year 4: 519,238.07 + (519,238.07 * 11.25%) = 580,436.88
4. Calculate the future value of Investment D:
- Year 1: 375,000 + (375,000 * 10.00%) = 412,500
- Year 2: 412,500 + (412,500 * 10.00%) = 453,750
- Year 3: 453,750 + (453,750 * 10.00%) = 499,125
- Year 4: 499,125 + (499,125 * 10.00%) = 548,037.50
Based on these calculations, Investment B has the highest future value after four years, reaching R632,636.46.
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Peru has 600 workers/citizens. Each worker can produce 40 agricultural goods (A) or 2 manufacturing goods (M). Each resident in Peru currently consumes 20A and 1M. Colombia has 680 workers/citizens. Each can produce 50A or 4M. Colombia's residents consume 25A and 2M. The ‘terms of trade’ (international prices) are 1M = 16A. Peru wants to continue consuming pre-trade A values, and Colombia also wants to continue consuming pre-trade M values. Given this information, in the case of Colombia, match the answers.
"- A. B. C. D. consumption before trade is __ A.
- A. B. C. D. consumption before trade is __ M.
- A. B. C. D. production before trade is __A.
- A. B. C. D. production before trade is __M.
- A. B. C. D. After trade, total exports would be: __M.
- A. B. C. D. production after trade is __M.
- A. B. C. D. production after trade is __A.
- A. B. C. D. After trade, if Colombia kept nothing of its total production as domestic consumption, then, exports would be: __M."
Let's analyze the given information for Colombia and fill in the blanks accordingly:
Colombia:
Population/Workers: 680
Production per worker: 50A or 4M
Consumption per person before trade: 25A and 2M
Filling in the blanks:
A. Consumption before trade is __ A.
Answer: 25A (as given)
B. Consumption before trade is __ M.
Answer: 2M (as given)
C. Production before trade is __ A.
To determine the production before trade, we need to calculate the total production of agricultural goods (A) by multiplying the production per worker (50A) by the number of workers (680):
Total production of A = 50A * 680 workers = 34,000A
Answer: 34,000A
D. Production before trade is __ M.
To determine the production before trade, we need to calculate the total production of manufacturing goods (M) by multiplying the production per worker (4M) by the number of workers (680):
Total production of M = 4M * 680 workers = 2,720M
Answer: 2,720M
After trade, total exports would be: __M.
To calculate the total exports, we need to determine the difference between the total production of manufacturing goods (M) and the domestic consumption of manufacturing goods (2M):
Total exports = Total production of M - Domestic consumption of M = 2,720M - 2M
Answer: 2,718M
Production after trade is __ M.
Since the total exports are given as 2,718M, the production after trade would be the total production of manufacturing goods (M) minus the total exports:
Production after trade = Total production of M - Total exports = 2,720M - 2,718M
Answer: 2M
Production after trade is __ A.
Since there is no information provided specifically about the production of agricultural goods (A) after trade, we cannot determine this value based on the given information.
After trade, if Colombia kept nothing of its total production as domestic consumption, then exports would be: __ M.
If Colombia kept nothing of its total production as domestic consumption, then all of the manufacturing goods (M) produced would be exported:
Answer: 2,720M
Please note that without additional information, we cannot determine the production of agricultural goods (A) after trade or the exact consumption values after trade.
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Uber - Riding the Gig Economy 1. Apply the five steps of the Planning Process to Uber's development of it's app-driven online cab service. 2. Outline the Strategic, Tactical and Functional plans Uber has concerning its new self-driving car program. Show at least one plus and one minus within each of the plans. 3. Plans rarely absolutely go to plan! It is impossible as variables in the environment keep changing and impact the company in different ways. What planning tools might Uber use to deal with some of the unexpected issues Uber has faced with its online cab business model. 4. How might Uber use Management by Objectives to work with municipalities and provinces to create the infrastructure and legislation needed to achieve its self-driving car goals?
Applying the five steps of the Planning Process to Uber's development of its app-driven online cab service involved establishing objectives, such as creating a convenient ride-hailing service.
They developed premises, recognizing the potential demand and technological advancements. Uber generated alternative courses of action, exploring driver recruitment and pricing models. They evaluated alternatives, considering market size and regulatory challenges. Finally, they selected the best alternative and implemented it by launching their app-based service.
Uber's strategic plan for self-driving cars involves disruption and increased safety, but potential job losses and regulatory challenges are drawbacks. Their tactical plan includes testing, partnerships, and pilot programs, with benefits of innovation and concerns of public skepticism. The functional plan focuses on hiring skilled personnel and building infrastructure, with advantages of attracting talent and challenges of high costs.
Planning tools Uber could employ to address unexpected issues include scenario planning to anticipate disruptions, contingency planning to mitigate impacts, and risk management to identify and manage risks and uncertainties.
Using Management by Objectives, Uber can work with municipalities and provinces by setting clear objectives, establishing performance metrics, fostering communication, and adapting objectives as needed to achieve self-driving car goals. This approach facilitates collaboration and alignment with government entities.
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Covid-19 has created a volatile operating environment for all companies and one major concern is the impact on asset values. Companies will need to carefully consider the impairment of their assets and will need to make key judgements and sensitivity of assumptions regarding their recoverable amount calculations.
Required: Briefly discuss the impact of Covid-19 on any two aspects of the impairment testing on intangibles. Please ensure that your discussion is relevant to the assets specified. (5 Marks)
The SARS-CoV-2 virus, which causes Covid-19, is a highly contagious respiratory infection also known as the coronavirus sickness of 2019. A global pandemic resulted from it after it was initially discovered in Wuhan, China, in December 2019.
The impact of Covid-19 on the impairment testing of intangibles is as follows:
1. Future cash flows of the asset When a company purchases intangible assets, it expects to earn a certain amount of future cash flows from them. The outbreak of Covid-19 and the ensuing pandemic, on the other hand, have had a negative impact on the economy as a whole. As a result, firms are required to re-evaluate their estimates of the future cash flows to be earned from such assets.
The management of the company will have to take an educated guess as to how long the negative impact of Covid-19 will last. They must also decide if the intangible asset will retain its marketability in the future. The company should investigate whether the asset's cash-generating capabilities have been influenced by any governmental or legal actions.
2. Determination of fair value There are different ways to determine the fair value of intangible assets. One of the most popular approaches is the "income approach," which considers the asset's future cash flows to be earned. The Covid-19 epidemic has made it difficult for businesses to make predictions about the future. As a result, the management must exercise extreme caution when assessing the value of intangible assets. This implies that any analysis must be based on current conditions since the pandemic's impact on the economy and the company's future earnings is unknown.
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Ahmed contributed cash of $20,000 into the partnership. The journal entry to record this transaction is: Cash $20,000 Dr: partnership $20,000 Cr
True
False
Sure. The journal entry to record Ahmed's contribution of cash into the partnership is ; Debit: Cash $20,000 Credit: Ahmed, Capital $20,000.
The debit to Cash increases the asset account Cash by $20,000. The credit to Ahmed, Capital increases the owner's equity account Ahmed, Capital by $20,000. This entry reflects the fact that Ahmed has contributed $20,000 of cash to the partnership, which has increased the partnership's assets and equity. The journal entry you provided is incorrect because it credits Partnership instead of Ahmed, Capital. Partnership is a general ledger account that represents the total assets and liabilities of the partnership. Ahmed, Capital is a specific ledger account that represents Ahmed's ownership interest in the partnership.
Here is a breakdown of the journal entry:
Debit: Cash $20,000
This entry increases the asset account Cash by $20,000.
Credit: Ahmed, Capital $20,000
This entry increases the owner's equity account Ahmed, Capital by $20,000.
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On September 1, 2013 Apex Corp. issued 25,000 shares of $0.50 par value common stock for $1.25 per share.
Record the stock issue in general journal form.
On August 15, 2013 Troy Ellison accepted 1,500 shares of $2.50 par common stock at par value for legal services he provided in the formation of XYZ Corp.
Make the journal entry to record the transaction.
On May 12, 2012 Wiley Corporation declared a $75,000 cash dividend on its common stock. The dividend is to be paid on July 1, 2012.
Prepare the journal entries to record the transaction on May 12th & July 1st.
Journal entry for stock issue: Date Accounts Debit Credit Sep 1, 2013Cash 31250 ($1.25 × 25,000) Common Stock 12500 ($0.50 × 25,000) Premium on Common Stock 18750Explanation:Issuing stock for more than the par value generates the premium on the common stock.
Journal entry for accepting shares: Date Accounts Debit Credit Aug 15, 2013Legal Services Expense 3750 ($2.50 × 1,500) Common Stock 3750Explanation:Troy Ellison accepted 1,500 shares of $2.50 par common stock at par value for legal services he provided in the formation of XYZ Corp. The journal entry for accepting 1,500 shares of $2.50 par common stock at par value is recorded as shown above.
Journal entry for the declaration of cash dividend: Date Accounts Debit Credit May 12, 2012Retained Earnings 75,000 Dividends Payable 75,000July 1, 2012Dividends Payable 75,000 Cash 75,000 On May 12, 2012, Wiley Corporation declared a $75,000 cash dividend on its common stock.
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"i’ve been at my job for four days, and i’ve already met all my coworkers!" amber says. which type of business does ember most likely work for?
Based on Amber's statement, it is likely that she works for a small-sized business or a company with a limited number of employees.
In larger organizations, it is generally challenging to meet and become acquainted with all coworkers within just four days, as there are typically numerous departments, teams, and employees spread across different locations or floors.
In a small business or a startup, with a smaller workforce, it is more feasible to interact with and get to know everyone in a short period. The close-knit environment of such organizations often allows for easier and quicker integration into the team.
However, it's important to note that the context provided is limited, and there could be other factors at play. It's always advisable to gather more information to make a more accurate determination about the type of business Amber works for.
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Using expansionary demand side policies to deal with an economy in stagflation (SRAS has shifted left) has the adverse consequence of:
A. Increasing unemployment
B. Decreasing output
C. Increasing the aggregate price level
D. Depreciating the real exchange rate
The correct answer is: C. Increasing the aggregate price level
Stagflation refers to a situation where an economy experiences both stagnant economic growth (low or negative output) and high inflation (increase in the aggregate price level). In such a scenario, expansionary demand-side policies, which are typically used to stimulate economic growth, can have adverse consequences.
When the aggregate supply curve (SRAS) has shifted left, it indicates a decrease in the economy's potential output due to factors such as supply shocks or reduced productivity. In response, policymakers may implement expansionary demand-side policies, such as increasing government spending or reducing taxes, to boost aggregate demand and try to stimulate economic growth.
However, in the case of stagflation, these expansionary policies can exacerbate inflationary pressures. Increasing aggregate demand when the economy is already experiencing reduced output can lead to a situation where the demand for goods and services outpaces the economy's ability to supply them, causing prices to rise. Therefore, the adverse consequence of using expansionary demand-side policies in stagflation is an increase in the aggregate price level (C).
The other options are not necessarily adverse consequences of using expansionary demand-side policies in stagflation:
A. Increasing unemployment: While expansionary policies can potentially lead to higher employment levels, the specific impact on unemployment depends on various factors, such as the effectiveness of the policies and the structure of the labor market. It is not a necessary adverse consequence.
B. Decreasing output: Stagflation already implies a decrease in output, and expansionary policies aim to counter this by increasing output. Therefore, decreasing output would not be an adverse consequence of these policies in the context of stagflation.
D. Depreciating the real exchange rate: The impact on the real exchange rate depends on various factors, including the specific policy measures taken and the response of international markets. While expansionary policies can affect the real exchange rate, it is not an inherent adverse consequence in dealing with stagflation.
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Question 10 1 pts In the market for tomatoes, assume the market demand is perfectly elastic and the market supply is elastic. If a tax is placed on the suppliers in this market, how will the tax burden be distributed? O Consumers will bear all the tax O Producers will bear all the tax O Consumers and producers will bear the tax burden equally O Producers will bear a greater burden of the tax, but not all of the tax. O Consumers will bear a greater burden of the tax, but not all the tax.
In the case of a perfectly elastic demand, the suppliers will bear a very small part of the tax, and consumers will bear the majority of the burden.
If a tax is imposed on the tomato suppliers in a market where the market demand is perfectly elastic and the market supply is elastic, the tax burden will be distributed between the consumers and producers. The answer is option E, that consumers will bear a greater burden of the tax, but not all of the tax. Perfectly elastic demand occurs when a tiny increase or decrease in price results in an infinite decrease or increase in the quantity of goods bought by customers. In other words, the amount demanded of a good is infinitely sensitive to price changes. The demand curve in a perfectly elastic market is horizontal or flat. The tax burden is a term that refers to how the financial burden of a tax is distributed between buyers and sellers in the market. The tax burden can be shared between the two parties, or it can be borne entirely by one group. In a perfectly elastic market, when a tax is imposed on suppliers, they will pass on the burden of the tax to the buyers in the form of higher prices. In the case of a perfectly elastic demand, the suppliers will bear a very small part of the tax, and consumers will bear the majority of the burden.
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The Parent Company purchased common stock of Sub Company in a series of open-market purchases in 2020 and 2022. January 1, 2020 purchased 1,000 shares at $15 per share. January 1, 2022 purchased 8,000 shared at $18 per share. Sub Company had 15,000 shares of $10 par value common stock outstanding for the entire period. Dividends of 67000 were paid on December 31, 2022. The Parent Company uses the cost method to account for the investment. Any investment the Parent Company owns less than 20% is classified as available for sale securities.
The amount of dividend income the Parent Company recognizes in 2022 is 4670 Incorrect
The amount of realized gain reflected in the Parent's retained earnings would be 37360
The amount of dividend income the parent company recognizes in 2022 is $5,000. The parent company purchased the common stock of the subcompany in a series of open-market purchases in 2020 and 2022.
On January 1, 2020, I purchased 1,000 shares at $15 per share.
On January 1, 2022, 8,000 shares were purchased at $18 per share. Sub Company had 15,000 shares of $10 par value common stock outstanding for the entire period. Dividends of $67,000 were paid on December 31, 2022. The parent company uses the cost method to account for the investment. Any investment the parent company owns less than 20% of is classified as available-for-sale securities.
The parent company's total investment in the sub-company would be as follows:
Investment on January 1, 2020, = $15 × 1,000 = $15,000
Investment on January 1, 2022, = $18 × 8,000 = $144,000
Total investment = $15,000 + $144,000
= $159,000
Since the parent company owns less than 20% of the subsidiary, the cost method is used to account for the investment. In the cost method, the investor records its investment in the stock at cost and recognizes dividends when they are received. Dividend income is the portion of a company's profit that is paid out to shareholders. Thus, dividend income can be calculated by multiplying the dividends paid by the proportion of shares owned by the investor.
Here, the parent company owns 1,000 shares plus 8,000 shares, or 9,000 shares, out of the 15,000 shares that the subcompany had outstanding throughout the period. Dividend income recognized in 2022 = Dividends paid × Proportion of shares owned by the investor
Dividend income recognized in 2022 = $67,000 × (9,000 / 15,000)
= $40,200However, the parent company uses the cost method to account for the investment. Therefore, it recognizes only the dividend income it received as revenue. Dividend income received in 2022 = $18 × 1,000 + $18 × 8,000
= $5,000The amount of realized gain reflected in the parent's retained earnings would be $42,000.
The calculation is done as follows: Parent Company's investment in
Sub Company on January 1, 2022, = $18 × 8,000 shares = $144,000
Sub Company's dividend per share = $67,000 ÷ 15,000 shares
= $4.47
Sub Company's dividend on 8,000 shares purchased in 2022 = $4.47 × 8,000 shares
= $35,760
The parent company's cost basis in these 8,000 shares = $18 × 8,000 shares
= $144,000
Realized gain = Sale proceeds - Cost basis = $35,760 - $18,000 = $17,760
The total realized gain on the sale of 8,000 shares = $17,760 × 2 = $35,520
On December 31, 2022, the parent company sold 2,000 shares of the subcompany's common stock for $37,360 ($18.68 per share), resulting in a realized gain of $35,520. This gain would be reflected in the parent company's retained earnings.
Therefore, the amount of realized gain reflected in the parent's retained earnings would be $35,520 (and not $37,360). Thus, the amount of dividend income the parent company recognizes in 2022 is $5,000, and the amount of realized gain reflected in the parent's retained earnings would be $35,520.
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netflix focuses on innovation and high individual employee performance. netflix pursues a differentiation strategy and employees have a significant portion of their pay at risk. T/F
"Netflix places a strong emphasis on innovation and outstanding individual worker performance. It is TRUE that Netflix pursues a differentiation strategy, putting a sizeable percentage of its employees' salaries at risk.
Netflix is a well-known streaming service provider that started in 1997 as a DVD mail-order service. It has since developed into an online streaming service that offers a wide selection of films and television shows. Netflix's business strategy includes being more than simply a streaming service provider; it also focuses on innovating its product offerings and the way it provides them to customers.
Netflix's focus on innovation and high individual employee performance is a key part of its business strategy. Netflix believes that by fostering a culture of innovation and excellence, it can produce better products and services for its customers. Netflix also believes that by focusing on innovation and high individual employee performance, it can attract and retain the best talent in the industry. Furthermore, Netflix pursues a differentiation strategy to distinguish itself from other streaming service providers by offering a unique product mix that is tailored to specific customer requirements.
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.Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below:
Whitman Company Income Statement Sales (39,000 units x $40.60 per unit) $1,542,800
Cost of goods sold (38,000 units x $24 per unit) 912,000
Gross margin 630,800
Selling and administrative expenses 437,000
Net operating income $193,800
The company's selling and administrative expenses consist of $285,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $24 per unit product cost given above is computed as follows:
Direct materials $11
Direct labor 5
Variable manufacturing overhead 3
Fixed manufacturing overhead ($240,000 x 48,000 units) 5
Absorption costing unit product cost $24
1. Prepare the company's income statement in the contribution format using variable costing.
2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement.
1. Whitman Company Income Statement (Variable Costing)
Sales: (39,000 units x $40.60 per unit) $1,542,800
Variable Expenses:
- Direct materials: (39,000 units x $11 per unit) $429,000
- Direct labor: (39,000 units x $5 per unit) $195,000
- Variable manufacturing overhead: (39,000 units x $3 per unit) $117,000
- Variable selling and administrative expenses: (39,000 units x $4 per unit) $156,000
Total Variable Expenses: $897,000
Contribution Margin: $1,542,800 - $897,000 = $645,800
Fixed Expenses:
- Fixed manufacturing overhead: $240,000
- Fixed selling and administrative expenses: $285,000
Total Fixed Expenses: $525,000
Net Operating Income: $645,800 - $525,000 = $120,800
2. Reconciliation of Net Operating Income:
Absorption Costing Net Operating Income: $193,800
Variable Costing Net Operating Income: $120,800
Difference = Absorption Costing Net Operating Income - Variable Costing Net Operating Income
= $193,800 - $120,800
= $73,000
The difference of $73,000 represents the increase in net operating income under absorption costing compared to variable costing. This difference is due to the fixed manufacturing overhead being absorbed into the product cost under absorption costing. Since the company produced more units (39,000) than it sold (38,000), the fixed manufacturing overhead allocated to each unit is higher, resulting in a higher product cost and higher net operating income under absorption costing.
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Daily 120 patients come to a walk-in clinic to visit the doctors or get tested. The clinic operates 8 hours a day, and is closed on both Saturdays and Sundays. On average, there are 5 patients in the clinic at any point in time. 3-1. What is the weekly rate of patients visit at this clinic? What is the monthly rate, considering that the clinic works 22 days a month (write down the unit for your calculated value)?
The weekly rate of patients in a clinic is close to 280 patients per week.
Any person who receives medical treatment from trained experts is referred to as a patient. Most frequently, the patient is ill or hurt and needs care from a doctor, nurse, optometrist, dentist, veterinarian, or other healthcare professional.
Originally, the word "patient" meant "one who suffers." The Latin word patients, the present participle of the deponent verb patior, which means "I am suffering," is the source of our English term. It is related to the Greek verb v and its corresponding noun (pathos).
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.Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 69,960 units during the year, but by September 30 only the following activity had been reported.
Units
Inventory, January 1 0
Production 2,000
Sales 2,000
Inventory, September 30 400
The division can rent warehouse space to store up to 1,000 units. The minimum inventory level that the division should carry is 50 units. Mr. Cavalas is aware that production must be at least 200 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 1,500 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 600 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost.
Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? (The basic formula for computing the required production for a period in a company is Expected sales + Desired ending inventory - Beginning inventory = Required production.) Show computations and explain your answer. Will the number of units scheduled for production affect the division's reported income or loss for the year? Explain.
Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduled for production during the last quarter? (See the formula in 1 above.) Explain.
Identify the ethical issues involved in the decision Mr. Cavalas must make about the level of production for the last quarter of the year.
To determine the number of units that should be scheduled for production during the last quarter of the year, we can use the formula: Expected sales + Desired ending inventory - Beginning inventory = Required production.
Given information:
- Expected sales for the last quarter: 600 units
- Beginning inventory: 400 units
- Desired ending inventory: The minimum inventory level that should be carried is 50 units.
Using the formula, we can calculate the required production:
Required production = 600 + 50 - 400 = 250 units
Therefore, 250 units should be scheduled for production during the last quarter of the year.
The number of units scheduled for production will affect the division's reported income or loss for the year. In variable costing, fixed manufacturing overhead is not included in the product cost. Therefore, if more units are produced, the fixed manufacturing overhead cost will be spread over a larger number of units, resulting in lower per-unit fixed manufacturing overhead and potentially higher reported income. Conversely, if fewer units are produced, the fixed manufacturing overhead cost will be spread over a smaller number of units, resulting in higher per-unit fixed manufacturing overhead and potentially lower reported income.
If the division is using absorption costing and the divisional manager wants to maximize the division's operating income for the year, the number of units scheduled for production during the last quarter should be calculated based on the absorption costing formula: Expected sales + Desired ending inventory - Beginning inventory. This is because absorption costing includes fixed manufacturing overhead in the product cost. By producing more units, the fixed manufacturing overhead cost will be spread over a larger number of units, resulting in a lower per-unit fixed manufacturing overhead and potentially higher reported operating income.
The ethical issues involved in Mr. Cavalas' decision about the level of production for the last quarter include:
1. Reporting accuracy: Mr. Cavalas needs to ensure that the reported income or loss for the year is accurately represented, regardless of the costing method used.
2. Integrity and transparency: Mr. Cavalas should make decisions based on ethical principles, maintaining transparency and ensuring that stakeholders have access to accurate and reliable financial information.
3. Conflict of interest: As the divisional manager, Mr. Cavalas may face a conflict of interest if his decision on production levels is influenced by personal gain, such as maximizing his bonus, rather than acting in the best interest of the company and its stakeholders.
4. Compliance with accounting standards: Mr. Cavalas should ensure that the division's accounting practices comply with relevant accounting standards and regulations and that the decision on production levels does not violate any ethical or legal requirements.
Overall, Mr. Cavalas must make an ethical decision by considering the financial impact, stakeholder interests, and adherence to accounting standards while maintaining integrity and transparency in reporting.
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Wildhorse Company purchased a delivery truck for $40,000 on July 1, 2022. The truck has an expected salvage value of $4,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2022 and 12,000 in 2023. Wildhorse uses the straight-line method of depreciation. (a) Your answer is partially correct. Compute depreciation expense for 2022 and 2023. Depreciation Expense 2022 2023 Straight-line method $ $ $ 4500 Prepare the journal entry to record 2022 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Prepare the journal entry to record 2023 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Show how the truck would be reported in the December 31, 2023, balance sheet. WILDHORSE COMPANY Partial Balance Sheet
To calculate the depreciation expense for 2022 and 2023, we will use the straight-line method:
(a) Depreciation Expense for 2022:
Depreciation Expense 2022 = ($40,000 - $4,000) / 8
(b) Depreciation Expense for 2023:
Depreciation Expense 2023 = ($40,000 - $4,000) / 8
Now let's prepare the journal entries for recording the depreciation expense:
(a) Journal entry to record 2022 depreciation:
Date: December 31, 2022
Account Titles and Explanation Debit Credit
Depreciation Expense $4,500
Accumulated Depreciation - Truck $4,500
(Record the depreciation expense for 2022)
(b) Journal entry to record 2023 depreciation:
Date: December 31, 2023
WILDHORSE COMPANY
Partial Balance Sheet
As of December 31, 2023
Asset:
Truck $31,000
Less: Accumulated Depreciation ($4,500)
Net Truck $26,500
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ABC Company owns a bookstore and has to decide how many copies to order of a new book. The book’s retail price is 30 TL and the wholesale price is 22 TL. The publisher will buy back the retailer’s leftover copies at a full refund but the bookstore incurs a 4 TL in shipping and handling costs for each book returned to the publisher. The demand forecast can be represented by a normal distribution with a mean 250 and standard deviation 85.
a) The company will consider this book to sell more than 450 units. What is the probability of such amount of selling ?
b) The company believes that there is also a probability of selling the book less than 55 percent of the mean forecast. What is the probability of such amount of selling?
c) What order quantity maximizes the company’s expected profit?
d) Suppose that the company orders 250 copies of the book. What would be the fill rate?
Please clearly explain each process step by step in the solution.
(a) The probability of selling more than 450 units is approximately 0.0228 or 2.28%.
(b) The probability of selling less than 55% of the mean forecast is approximately 0.0926 or 9.26%.
(c) The order quantity with the highest expected profit would be the optimal choice.
(d) The unfilled demand would be 1 - 0.5 = 0.5 or 50%. The fill rate would be (1 - 0.5) * 100 = 50%.
a) To calculate the probability of selling more than 450 units, find the area under the normal distribution curve to the right of 450.
First, standardize the value 450 using the mean and standard deviation given:
Standardized value = (450 - mean) / standard deviation
Standardized value = (450 - 250) / 85
Standardized value = 2
Next, find the cumulative probability to the left of this standardized value using a standard normal distribution table or a statistical calculator. The cumulative probability to the left of 2 is approximately 0.9772.
Finally, subtract this cumulative probability from 1 to find the probability to the right of 450:
Probability = 1 - 0.9772
Probability = 0.0228
Therefore, the probability of selling more than 450 units is approximately 0.0228 or 2.28%.
b) To calculate the probability of selling less than 55% of the mean forecast, find the area under the normal distribution curve to the left of this value.
First, calculate 55% of the mean forecast:
55% of 250 = 0.55 * 250 = 137.5
Next, standardize this value using the mean and standard deviation:
Standardized value = (137.5 - mean) / standard deviation
Standardized value = (137.5 - 250) / 85
Standardized value = -1.3294
Using a standard normal distribution table or a statistical calculator, we find the cumulative probability to the left of -1.3294, which is approximately 0.0926.
Therefore, the probability of selling less than 55% of the mean forecast is approximately 0.0926 or 9.26%.
c) To determine the order quantity that maximizes the company's expected profit, consider the profit for each possible order quantity.
Let's denote the order quantity as Q. The demand follows a normal distribution with a mean of 250 and a standard deviation of 85. The profit can be calculated as follows:
Profit = (Revenue - Cost) * Quantity
Revenue = Retail Price * Min(Demand, Quantity)
Cost = Wholesale Price * Quantity + Shipping and Handling Costs * Max(0, Quantity - Demand)
To find the order quantity that maximizes the expected profit, we calculate the profit for different order quantities and choose the one with the highest expected profit.
Let's calculate the expected profit for different order quantities:
Order Quantity: 0
Profit = (30 - 22) * 0 - 4 * Max(0, 0 - 250)
= -4 * 250
= -1000
Order Quantity: 1
Profit = (30 - 22) * 1 - 4 * Max(0, 1 - 250)
= 8 - 4 * 249
= -988
Order Quantity: 2
Profit = (30 - 22) * 2 - 4 * Max(0, 2 - 250)
= 16 - 4 * 248
= -984
...
Continue calculating the profit for different order quantities until a pattern emerges.
By calculating the profit for different order quantities, you can identify the order quantity that maximizes the expected profit. The order quantity with the highest expected profit would be the optimal choice.
d) The fill rate is the percentage of demand that is satisfied by the available stock. To calculate the fill rate, we compare the demand with the available stock.
If the company ordered 250 copies of the book and the demand follows a normal distribution with a mean of 250 and a standard deviation of 85, we can calculate the fill rate as follows:
1. Calculate the z-score for the demand of 250 copies:
z-score = (250 - mean) / standard deviation
= (250 - 250) / 85
= 0
2. Using a standard normal distribution table or a statistical calculator, find the cumulative probability to the left of the z-score of 0. This gives us the proportion of demand that is below or equal to 250.
3. Subtract the cumulative probability from 1 to find the proportion of demand that is above 250. This represents the unfilled demand.
4. Calculate the fill rate by subtracting the unfilled demand from 1 and multiplying by 100 to get the percentage:
Fill rate = (1 - Unfilled demand) * 100
For example, if the cumulative probability to the left of the z-score of 0 is 0.5, it means that 50% of the demand is below or equal to 250. Therefore, the unfilled demand would be 1 - 0.5 = 0.5 or 50%. The fill rate would be (1 - 0.5) * 100 = 50%.
Remember to calculate the cumulative probability and fill rate using the actual values from the standard normal distribution table or a statistical calculator for a z-score of 0.
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Given K units of capital and L units of labor, a company produces Q = 2K1/2 [1/3 units of its product. Each unit of capital costs $3 and each unit of labor costs $1. The selling price for the product is $3 per unit. What is the maximum profit? A. 4 B. 6 C. 8 D. 12 25. In a market, the inverse supply function is given by på (q) = aq + b for some positive constants a and b. The equilibrium price is 7 and the equilibrium quantity is 2. If the producer surplus is 4, then A. a = 1, b = 5 B. a = 2, b=3 C. a = 3, b=1 D. a = 3, b = 2
the maximum profit of the company is $12.38. Hence, option D is the correct choice. Answer: D. 12.
Given K units of capital and L units of labor, a company produces
Q = 2K1/2 [1/3]
units of its product. Each unit of capital costs $3 and each unit of labor costs $1. The selling price for the product is $3 per unit. What is the maximum profit?We have given the following information, Units of capital, K = kUnits of labor,
L = lProduct produced, Q = 2K1/2 [1/3]
Price of each unit of capital, pK = $3Price of each unit of labor, pL = $1Selling price per unit of product, P = $3Now, we need to find the Maximum ProfitSo, the profit function is given by;
Profit = Total Revenue - Total CostTotal
Revenue = Quantity x Price of the product= Q x P = 3Q
Total Cost = (pK x K) + (pL x L)= 3K + L
Now,Profit = 3Q - (3K + L)Profit = 3 (2K1/2 [1/3]) - (3K + L)
Profit = 6K1/2 [1/3] - 3K - L
Now, we need to maximize the profit using the first-order condition of the profit function.
dProfit/dK = 3K - 3 (2/3) K-2/3= 0 (For Maximum profit)dProfit/dL = -1= 0 (For Maximum profit)3K - 3 (2/3) K-2/3 = 03K = 3 (2/3) K-2/33K5/3 = 2Q = 3K1/2 [1/3]
We have to maximize the profit at
Q = 3K1/2 [1/3]
Then,3K5/3 = 2 x (3K1/2 [1/3])5K5/3 = 24K = (24/5)5/3= 17.7
Units of labor, L = 3K + L = 3(17.7) + 1 = 53.1
Maximum Profit = Profit (at K = 17.7, L = 53.1)
Maximum Profit = 6K1/2 [1/3] - 3K - L= 6 x (17.7)1/2 [1/3] - 3 x 17.7 - 53.1= $12.38
Therefore, the maximum profit of the company is $12.38. Hence, option D is the correct choice. Answer: D. 12.
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Based on past experience, a bank believes that 12% of the people who receive loans will not make payments on time. The bank has recently approved 500 loans. Answer the following questions. a) What are the mean and standard deviation of the proportion of clients in this group who may not make timely payments? + (O) = 0.12 SD (P) = 0.015 (Round to three decimal places as needed.) b) What assumptions underlie your model? Are the conditions met? A. With reasonable assumptions about the sample, all the conditions are met. OB. The 10% condition is not met. O C. The randomization and success/failure conditions are not met. OD. The success/failure condition is not met. O E. The randomization condition is not met. Based on past experience, a bank believes that 12% of the people who receive loans will not make payments on time. The bank has recently approved 500 loans. Answer the following questions. Tuo Turuvimicurvu unu vuvvvvurunur vonUILIVIT un Tum OD. The success/failure condition is not met. O E. The randomization condition is not met. OF. The randomization and 10% conditions are not met. O G. The 10% and success/failure conditions are not met. O H. Without unreasonable assumptions, none of the conditions are met. c) What is the probability that over 13% of these clients will not make timely payments? plô>0.13) =((Round to three decimal places as needed.)
a) Which is 0.12. The standard deviation of the proportion can be calculated using the formula: SD(P) = sqrt(p * (1 - p) / n), We get SD(P) = sqrt(0.12 * (1 - 0.12) / 500) ≈ 0.015 .
b) We do not have information about randomization or the 10% condition. Therefore, option D is the most appropriate answer: "The success/failure condition is not met."
c) To calculate the probability that over 13% of clients will not make timely payments, we need to use the normal distribution approximation. We can use the z-score formula: z = (x - μ) / σ,
z = (0.13 - 0.12) / 0.015 ≈ 6.67.
The probability can be obtained by finding the area under the normal curve to the right of the z-score, which is essentially 1 minus the cumulative probability.
Probability is a measure of the likelihood or chance of an event occurring. It quantifies the degree of uncertainty associated with an outcome. Probability values range from 0 to 1, where 0 represents an impossible event and 1 represents a certain event. Probability allows us to make informed predictions and decisions based on the likelihood of different outcomes in a given situation.
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points Save Answer Assume today's settlement price on a CME EUR futures contract is $1.3146/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next day' settlement price is $1.3051. Calculate the balance of the account at the end of the day. (USD, no cents)
Today's settlement price on a CME EUR futures contract is $1.3146/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next day's settlement price is $1.3051
.To find: Calculate the balance of the account at the end of the day solution:
Daily Price Limit of CME Euro FX futures contract
= $0.0050/EUR (Currency Futures)The price movement of the futures contract
= $1.3146/EUR - $1.3051/EUR
= $0.0095/
EURAs 1 Euro futures contract consists of 125,000 Euros,
thus Dollar value of 1 Euro = 1.3051 * 125,000
= $163,137.5
Dollar value of the short position = 163,137.5
The profit and loss per contract would be = 0.0095 * 125,000
= $1,187.5
As the short position was taken, it resulted in a profit:
Profit = 1,187.5 dollars
Therefore, new balance in the account will be the sum of old balance and profit
= $1,700 + $1,187.5 = $2887.5
Thus, the balance of the account at the end of the day is $2,887.5 (USD, no cents).
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T/F (Qualitative) A stock with a higher market capitalization will have a higher beta, and vice versa. ANSWER Type your answer here.... BY 5 5 Pts
The statement is false. Market capitalization and beta are two distinct measures that provide different insights into a stock.
Market capitalization refers to the total value of a company's outstanding shares in the market. It is calculated by multiplying the current share price by the number of outstanding shares. Market capitalization categorizes stocks into different groups, such as large-cap, mid-cap, and small-cap, based on their total market value.
Beta, on the other hand, is a measure of a stock's systematic risk or volatility compared to the overall market. It indicates the sensitivity of a stock's returns to fluctuations in the market. A beta greater than 1 implies that the stock tends to be more volatile than the market, while a beta less than 1 suggests lower volatility.
There is no direct relationship between market capitalization and beta. Stocks with higher market capitalization can have a wide range of beta values. Some large-cap stocks may have low beta values, indicating lower volatility compared to the market. Similarly, small-cap stocks can exhibit a wide range of beta values, including both high and low values.
The beta of a stock is influenced by various factors such as the company's business model, industry dynamics, financial leverage, and market conditions. Market capitalization alone does not determine a stock's beta. It is important to consider the specific characteristics and risk factors associated with the individual stock or company when assessing its beta.
In summary, market capitalization and beta are independent measures that provide different information about a stock. Market capitalization does not directly determine the beta of a stock, and stocks with higher market capitalization can have a wide range of beta values.
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A person borrows the amount of $1,000 to be repaid in 5 years at an interest rate of 20% per year. How much would this person pay at the end of year 5?
At the end of year 5, the person would need to pay back the borrowed amount of $1,000 plus the interest accrued. The total payment at the end of year 5 will include both the principal amount and the accumulated interest.
To calculate the total payment at the end of year 5, we need to consider the interest rate and the duration of the loan. In this case, the person borrowed $1,000 at an interest rate of 20% per year for 5 years.
The interest accrued each year can be calculated by multiplying the principal amount by the interest rate. In this case, the annual interest is $1,000 multiplied by 20%, which equals $200. Since the loan lasts for 5 years, the total interest accrued over the 5-year period is $200 multiplied by 5, which equals $1,000.
Therefore, at the end of year 5, the person would need to pay back the initial borrowed amount of $1,000 plus the accumulated interest of $1,000, resulting in a total payment of $2,000. This payment includes both the repayment of the principal amount and the interest that has accrued over the 5-year period.
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When a floor manager empowers this team members, his power:
a. multiplies in direct proportion to the number of people receiving a power share.
b. increases.
c. remains approximately the same.
d. decreases.
When a floor manager empowers his team members, his power "increases", hence option b is correct.
To empower someone means to give them the power, authority, or confidence to do something, this process is known as empowerment. In a workplace context, this means allowing employees to make decisions, take ownership of tasks, and work autonomously to achieve team goals. A floor manager, or floor supervisor, is responsible for overseeing the day-to-day operations of a specific area of a business, such as a department or floor. Part of their role is to empower team members to work independently and collaboratively to achieve their goals. By empowering team members, a floor manager can create a more efficient and effective team. This can lead to higher morale, increased productivity, and better results for the business as a whole. Additionally, when team members feel empowered, they are more likely to take ownership of their work and be more invested in the success of the team and the business as a whole.Therefore, when a floor manager empowers his team members, his power increases.
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Sunscreen and beach towels are complementary goods. If the price of sunscreen increases, ceteris paribus, _____.(1 point)
1. the income of consumers will decrease the income of consumers will decrease
2. the quantity demanded of beach towels will increase for every possible price
3. the quantity demanded of beach towels will decrease for every possible price(I think it is this one)
4.the income of consumers will increase
Sunscreen and beach towels are complementary goods. If the price of sunscreen increases, ceteris paribus, the quantity demanded of beach towels will decrease for every possible price.
Complementary goods are products or services that people use together. For example, automobiles and gasoline, as well as hot dogs and buns, are complementary goods. When two or more goods are complementary, an increase or decrease in the price of one will result in an opposite movement in the demand for the other good.
Given that sunscreen and beach towels are complementary goods. Thus, if the price of sunscreen increases, the quantity demanded of beach towels will decrease for every possible price. The key here is that the increase in the price of sunscreen, with all other things constant, causes the quantity demanded of beach towels to fall. This is because the two goods are complementary; sunscreen is usually used with beach towels.The price of sunscreen has a direct effect on the demand for beach towels, but not the other way around. This is why option 3, which states that the quantity demanded of beach towels will decrease for every possible price, is the correct answer. The demand curve for beach towels shifts to the left, indicating that people demand less of it at every possible price as a result of the increase in sunscreen prices.
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Rianna is 60 years old. She purchased a deferred annuity for $40,000. The annuity will begin paying her $400 per month at age 65 for the rest of her life. At age 65 her expected return multiple is 20. In the year that she is 67 years old, how much of the annuity will be taxable? Select one: a. $0. b. $2,000. c. $2,800. d. $4,000.
Rianna purchased a deferred annuity for $40,000. The annuity will begin paying her $400 per month at age 65 for the rest of her life. At age 65 her expected return multiple is 20. In the year that she is 67 years old, how much of the annuity will be taxable.
GivenRianna is 60 years old.Purchased a deferred annuity for $40,000.Annuity will begin paying her $400 per month at age 65Expected return multiple is 20 at age 65To find: How much of the annuity will be taxable?SolutionThe amount of the annuity would be $400 per month, so over a year, she would receive:$400 * 12 = $4,800.Rianna is 67 years old, which is two years since the annuity started. Therefore, two years would have been paid out to Rianna before the start of the tax year.
She would have received:$400 * 24 = $9,600.In the year that Rianna is 67 years old, she would receive $4,800, but $9,600 would have already been received from the deferred annuity. Therefore, the taxable amount for the year when Rianna is 67 years old would be:$4,800 - $9,600/20 = $0. Thus, the answer is a. $0.
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Please answer only 3 of the following 5 questions in short paragraphs, between 250-500 words for each question. The questions cover material from chapters 11, 13, 14 and 15. 1. Because it is worried about inflation in the near term, the government has decided to restrict aggregate demand. Which tool of fiscal policy (or combination) do you believe it should use: government purchases, taxes, or transfers? Why? a. | 2. The president has just retained you to advise him on whether to change government fiscal policy. You understand that any change in spending or taxation that the administration proposes will have to be considered for a number of months by Congress, and then that the full impact of the policy change on the economy will not occur until several months after it is enacted. Under these circumstances, what is your advice? 3. The Fed has three conventional tools that it can use to change the money supply under normal economic conditions: open-market operations, changes in the banks' required reserve ratio, and changes in policies regarding lending to member banks. Which do you think is the most useful, the least useful? Does the Fed really need three tools-wouldn't one do just as well? 4. What should government do to avoid another Great Recession like the last one during 2007-09 period? What policies have been undertaken? Are they adequate? 5. Do you think monetary or fiscal policy is likely to be the more effective tool of stabilization policy? Why?
As the government is worried about inflation in the near term, the use of which tool of fiscal policy or combination should it use: government purchases, taxes, or transfers? Why?The tool of fiscal policy the government should use depends on the state of the economy.
Suppose the economy is booming and inflation is increasing, a restriction in aggregate demand will be a good policy. This means that the government should reduce the amount of money in circulation by increasing taxes or reduce transfer payments. This policy will decrease the disposable income of people.
On the other hand, if the economy is in a recession, and aggregate demand is low, the government should increase its spending or reduce taxes to stimulate the economyUnder the given circumstance, my advice to the president would be that it is not wise to make changes in the government fiscal policy immediately.
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1. Explicit and Implicit Costs Juan and Julia contributed $50,000 of their own money to the company They bought equipment for $3,000 They hired an employee with a salary of $20,000 Juan quit his job where he earned $30,000 Julia quit part of her job where she earned $15,000 · Purchases of materials for the business were $10,000 · At the end of the year the value of the equipment is $28,000 · A business loan of $100,000 pays 6% annual interest The normal profit based on the above data from running the business is $30,000. True or false?
Explicit and Implicit Costs The normal profit based on the given data from running the business is $30,000. False.An explicit cost is the money that the business spends, which includes the wages paid to employees, the rent, and the cost of supplies.
When the business purchases a new piece of equipment or hires a new employee, this is a clear cost that is easily measured and accounted for. The implicit cost is a little more complicated. It is a cost that a company pays but that is not explicitly stated in the business records. When a company uses its own funds to purchase equipment or pay salaries, it incurs implicit costs.
The normal profit based on the above data from running the business is $30,000. False, it is a loss as we can calculate it as follows:
Total explicit costs = $50,000 + $3,000 + $20,000 + $10,000 + $6,000 (interest expense) = $89,000 Total implicit costs = $30,000 + $15,000 + $30,000 = $75,000Total revenue = $0Therefore, normal profit = Total Revenue - Total Explicit Costs - Total Implicit Costs = $0 - $89,000 - $75,000 = ($164,000)
This means that the company is operating at a loss of $164,000.
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Many companies have switched from absorption costing to variable costing for internal reporting: Select one: a. to comply with external reporting requirements as required by GAAP b. to increase bonuses for managers c. so the denominator level is more accurate d. to reduce the undesirable incentive to build up inventories that would show higher operating income
Many companies have switched from absorption costing to variable costing for internal reporting to reduce the undesirable incentive to build up inventories that would show higher operating income.
The decision to switch from absorption costing to variable costing for internal reporting is often driven by the desire to eliminate the impact of fixed manufacturing overhead costs on inventory valuation. Under absorption costing, fixed manufacturing overhead costs are allocated to units produced and included in the cost of inventory. This means that as inventory levels increase, more fixed overhead costs are allocated and reported as part of the cost of goods sold.
By using variable costing, fixed manufacturing overhead costs are treated as period costs and are not allocated to units produced. This eliminates the incentive for managers to build up inventories to reduce reported operating income. Instead, variable costing focuses on the direct costs incurred to produce units, such as direct materials and direct labor.
The switch to variable costing provides a more accurate representation of the costs incurred by the company for internal reporting purposes. It helps align the reported costs with the actual costs incurred to produce the goods and allows for better analysis and decision-making based on the true cost structure of the company.
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