Answer:
Total recruitment cost = $316.5
Explanation:
Note:
Given question is incomplete,
The number of employees = 5,000
Given:
Turnover rate for this year = 6.33%
Find:
Total recruitment cost
Computation:
Total recruitment cost = Turnover rate for this year × The number of employees
Total recruitment cost = 5,000 × 6.33%
Total recruitment cost = $316.5
The total recruiting cost will be $316.5 for Digby.
Given information
Assumed the number of employees is 5,000
Turnover rate for this year = 6.33%
Total recruitment cost = Turnover rate for this year * The number of employees
Total recruitment cost = 5,000 * 6.33%
Total recruitment cost = $316.5
Therefore, the total recruiting cost will be $316.5 for Digby.
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A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability. The manager believes there is a 75 percent chance the recession will end in six months and profits will return to $400 million. However, there is a 25 percent chance the recession will not end in six months, resulting in a $5 million loss. The expected profits over the next six months are:
Answer:
Expected profit = $298.75 million
Explanation:
To calculate the expected return or expected profits, we will simply multiply the probability of each event by the return expected in that event and take a sum the answers. Thus, the expected profit can be calculated as follows,
Expected profit = Probability of recession ending * Profit if recession ends + Probability of recession not ending * profit or loss if recession does not end
Expected profit = 0.75 * 400 + 0.25 * -5
Expected profit = $298.75 million
Instead of a dividend of $1.60 per share, the company has announced a share repurchase of $16,000 worth of stock. How many shares will be outstanding after the repurchase?
Answer:
9,690 stocks
Explanation:
some information is missing:
Market Value Balance Sheet
Cash $45,300 Equity $515,300
Fixed assets $470,000
Total $515,300 Total $515,300
total number of shares outstanding = 10,000
stock's market price = $515,300 / 10,000 = $51.53
stocks repurchased = $16,000 / $51.53 = 310.50, but we must round down to 310 stocks
stocks outstanding after repurchase = 10,000 - 310 = 9,690
3. “The International Monetary Fund (IMF) and the World Bank are two institutions that have outlived their usefulness”. Do you agree?
Answer:
“The International Monetary Fund (IMF) and the World Bank"
Have they outlived their usefulness?
No.
The IMF and the World Bank have not outlived their usefulness. They remain very useful and relevant to our world today. The problem they have experienced stem in part from the neglect of their purposes, because of the near-absence of the grassroot touch. They can refocus on their purposes and reduce elitistism, and then they continue to be useful.
But, they cannot rediscover and concentrate on their purposes without the cooperation of member-countries. Recalcitrancy does not allow any organized institutions without police power to function at their best. Member-countries must learn to cooperate with these bodies to achieve their purposes. There is still global poverty ravaging the world population, even among the rich and developed countries of the world.
In most developing countries, their national governments are traditionally entrenched as anti-developmental. While they make long and meaningless speeches at world fora, back home they do not walk their talk and so often renege on their promises. This is why it seems that the impact of these world bodies are not being felt. National governments must be able to show responsibility to allow the effects of monetary policies and agreements to benefit the poor and the vulnerable.
Explanation:
The World Bank is an international body of the United Nations with about 189 member-countries. It works with developing countries to reduce poverty, increase access to wealth, and promote global prosperity. The IMF is responsible for ensuring that the international monetary system is operational and stable to ginger sustainable global economic growth.
f covered interest arbitrage opportunities do not exist, Group of answer choices interest rate parity holds. interest rate parity does not hold. interest rate parity holds, and arbitragers will be able to make risk-free profits. arbitragers will be able to make risk-free profits. interest rate parity does not hold, and arbitragers will be able to make risk-free profits.
Answer: interest rate parity holds
Explanation:
Covered interest arbitrage is a trading strategy that is used by an investor when the person whereby takes advantage of the differences in interest rate between two nations and invest in the currency that brings higher value.
If covered interest arbitrage opportunities do not exist, it simply means that interest rate parity holds.
Marston Manufacturing Company has two divisions, L and H. Division L is the company’s low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division H is considering a project with an expected return of 12%. Should Marston Manufacturing Company accept or reject the project? Reject the project Accept the project On what grounds do you base your accept–reject decision? Division H’s project should be accepted, as its return is greater than the risk-based cost of capital for the division. Division H’s project should be rejected since its return is less than the risk-based cost of capital for the division.
Answer:
Should Marston Manufacturing Company accept or reject the project?
Marston C Company should reject the project because its expected return is lower than Division H's cost of capital.
Since the divisions' risk is so different, and probably their projects are also very different, the company should use different costs of capital to accept of reject the projects based on each division's cost of capital.
Imagine another situation where Division L is evaluating a project that yields 10%. If they used the company's WACC, then they should reject the project, but if they used the division's cost of capital, then they should accept the project (in this case I would recommend accepting it).
Explanation:
Division H's risk = 14%
Division L's risk = 8%
WACC = 11%
Jacob Corcoran bought 10,000 shares of Grebe Corporation stock two years ago for $24,000. Last year, Jacob received a nontaxable stock dividend of 2,000 shares in Grebe Corporation. In the current tax year, Jacob sold all of the stock received as a dividend for $18,000.
Required:
a. Complete the letter to Jacob describing the tax consequences of the stock sale.
b. Prepare a memo for the tax research file describing the tax consequences of the stock sale.
c.
Answer:
Jacob purchased 10000 shares form Grebe corporation two years ago for $24000
last year Jacob received a non taxable stock dividend of 2000 shares from Grebe corporation
In the current year tax year Jacob sold all stock received as dividend that's 2000 shares for $18000
The gain of the sale of 2000 shares can be calculated by subtracting the basis in the shares from the cost price. the cost of shares = ( $24000 / 12000 ) = $2 per share
profit made from the sales of 2000 shares is calculated as follows ; selling price ( $18000 ) - cost price of 2000 shares ( $2 * 2000) , the profit is $14000 and it is in the long term because the original shares bought has been held for at least 1 year
Explanation:
Jacob purchased 10000 shares form Grebe corporation two years ago for $24000
last year Jacob received a non taxable stock dividend of 2000 shares from Grebe corporation
In the current year tax year Jacob sold all stock received as dividend that's 2000 shares for $18000
The gain of the sale of 2000 shares can be calculated by subtracting the basis in the shares from the cost price. the cost of shares = ( $24000 / 12000 ) = $2 per share
profit made from the sales of 2000 shares is calculated as follows ; selling price ( $18000 ) - cost price of 2000 shares ( $2 * 2000) , the profit is $14000 and it is in the long term because the original shares bought has been held for at least 1 year
The required investment cost of a new, large shopping center is $49 million. The salvage value of the project is estimated to be $20 million (the value of the land). The project's life is 15 years and the annual operating expenses are estimated to be $14 million. The MARR for such projects is 15% per year. What must the minimum annual revenue be to make the shopping center a worthwhile venture?
Answer:
The minimum annual revenue is 22.38 million.
Explanation:
Let the minimum annual revenue = X
Therefore,
The present value of cash inflows = Present value of cash outflows
X (P/A,15%,15) + 20 (P/F,15%,15)= 49*1 + 14(P/A,15%,15)
Now look into the annuity table or compound interest factor table and use that values to solve the equation.
X(5.847) + 20 (0.1229) = 49 + 14 (5.847)
X(5.847) = 130.858
X = 130.858 / 5.847
X = 22.38 millions
The minimum annual revenue = 22.38 million.
Though not specifically cited in the producer's contract, the producer is expected to telephone prospects on the insurer's behalf to arrange sales appointments. This is an example of what kind of producer authority?
Answer:
Implied authority
Explanation:
Implied authority defines an authority with respect to agent that involves jurisdiction to perform the acts so that the objectives of the organization could be achieved. Also, it is a binding contract on other person behalf or company
Therefore according to the given situation, this is an example of implied authority
Longman Company manufactures shirts. During June, Longman made 1,900 shirts but had budgeted production at 2,150 shirts. Longman gathered the following additional data:
Variable overhead cost standard $0.80 per DLHr
Direct labor efficiency standard 4.50 DLHr per shirt
Actual amount of direct labor hours 8,620 DLHr
Actual cost of variable overhead $10,344
Fixed overhead cost standard $0.10 per DLHr
Budgeted fixed overhead $968
Actual cost of fixed overhead $1,033
Required:
a. Calculate the variable overhead cost variance.
b. Calculate the variable overhead efficiency variance.
c. Calculate the total variable overhead variance.
d. Calculate the fixed overhead cost variance.
e. Calculate the fixed overhead volume variance
Answer:
a. variable overhead cost variance- $3,448 Unfavorable
b. variable overhead efficiency variance- $ 56 unfavorable
c. total variable overhead variance - $3,504 Unfavorable
d. fixed overhead cost variance - $65 unfavorable
e. Fixed overhead volume variance -$ 112.5 unfavorable
Explanation:
Variable overhead rate variance $
8,620 hours should have cost (8,620 × $0.80) 6896
but did cost 10,344
Variable overhead rate variance 3,448 Unfavorable
Variable overhead rate variance =$3,448 unfavorable
Efficiency variance Hours
190 units should have taken (1,900 × 4.50 hrs) 8,550
but did take 8,620
Efficiency variance in hours 70 unfavorable
Standard rate × $0.80
Efficiency variance $ 56 unfavorable
Efficiency variance =$ 56 unfavorable
Total variable overhead= rate variance +efficiency
Total variable overhead = $3,448 UF + $ 56 UF = $3,504 U
Total variable overhead = $3,504 Unfavorable
Fixed overhead cost variance
$
Budgeted cost 968
Actual cost 1,033
Fixed overhead cost Variance 65 unfavorable
Fixed Overhead Volume
Units
Budgeted units 2,150
Actual units 1,900
Variance 250
Standard fixed cost per unit (Notes) $0.45
Volume Variance 112.5 unfavorable
Standard fixed overhead cost per unit
= standard hours × standard Fixed overhead rate = 4.5 × $0.1= $0.45
a. variable overhead cost variance- $3,448 Unfavorable
b. variable overhead efficiency variance- $ 56 unfavorable
c. total variable overhead variance - $3,504 Unfavorable
d. fixed overhead cost variance - $65 unfavorable
e. Fixed overhead volume variance -$ 112.5 unfavorable
Harver company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 58000 units of RX5 follows. Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 58000 units of RX5 for 18.50 per unit. determine the total incremental cost making 58000 units of Rx5. Determine the total incremental cost of buying 58000 units of RX5. Should the company make or buy RX%
Answer:
Decision = Make
Explanation:
The incremental cost to buy and the incremental cost to make can be calculated as follows
DATA
Direct material = $4 (100% variable)
Direct labor = $8 (100% variable)
Overhead = $9 ( 70% fixed)
Total cost per unit = $21
Offered price = $18.5 per unit
Total units = 58,000
Solution
Incremental cost of making
Direct material ( 58,000 x $4) = $232,000
Direct labor (58,000 x $8) = $464,000
Overhead ( 58,000 x $9 x 30%) = $156,600
Total cost = $825,600
Incremental cost of buying
Total cost = No. of units x offered price
Total cost = 58,000 x $18.5
Total cost = $1,073,000
Decision: The company should make the product as the total cost to buy is $247,400 higher than the cost to make.
Welcome Inc. is a global Internet company that offers country-specific variations of its sites, keeping in mind the linguistic and religious differences between the countries. Welcome Inc. is most likely doing this to:
Answer:
reduce its cultural distance from the other countries
Explanation:
In this scenario, Welcome Inc. is most likely doing this to reduce its cultural distance from the other countries. Cultural distance refers to the differences in cultural values amongst countries, organizations, and stakeholders. In this case, Welcome Inc is trying to reduce this by making sure that they adjust their products and services to best accommodate these specific cultural differences in each country. In doing so they gain more loyal customers and increase their profits in each country which they do business in.
The Treasury bill rate is 4% and the market risk premium is 7%.
Project Beta Internal rate of return %
P 1.0 14
Q 0 6
R 2.0 18
S 0.4 7
T 1.6 20
Required:
a. What are the project costs of capital for new ventures with betas of 0.75 and 1.75?
b. Which of the following capital investments have positive NPVs?
1. P
2. Q
3. R
4. S
5. T
Answer:
the answer is going to be 3. R
whatis the general termfor resources used by a business to produce good or services referred to as
Answer:
Factors of Production
A company’s common stock has a market value of $63.18 per share and its next dividend is expected to be $3.26 per share. The stock’s beta is 1.2, the tax rate is 35%, and the market risk premium is 6.1% per year. The yield to maturity for the company’s long-term debt is 6.4% per year. If the riskiness of the company’s equity requires that it provide a risk premium of 3.2% per year over the yield on its long-term debt, what is the company’s annual cost of internal equity financing?
Answer:
Cost of equity = 9.6%
Explanation:
The cost of equity is the return a firm theoretically pays to its equity investors, In order to calculate the cost of equity here we need to add up the yield to maturity for the company's long term debt and the risk premium per year over the yield on its long term debt.
Solution
Cost of equity = Yield to maturity + Risk premium
Cost of equity = 6.4% + 3.2%
Cost of equity = 9.6%
The GoT cups are a fast seller and you need to ensure that you have enough rolls of paper to fulfill demand. The first stage in the process is to determine the total cost of the current inventory ordering model. Given the following information, how many rolls should they order to minimize costs?H: $1.75 per unitD: 500 rolls per monthQ: 100 units ordered at a timeS: $25 per order
Answer:
EOQ = 414 rolls
Explanation:
In order to calculate the number of orders to minimize the cost, we should calculate that by using the Economic order quantity model.
DATA
Holding cost = $1.75/unit
Annual demand = 500 rolls x 12 = 6000 rolls
Ordering cost = $25
Formula
EOQ =[tex]\sqrt{\frac{2Cod}{Ch} }[/tex]
Where
Co = ordering cost
D = Annual demand
Ch = Holding cost
Solution
EOQ = [tex]\sqrt{\frac{2(6000)(25)}{1.75} }[/tex]
EOQ = [tex]\sqrt{\frac{300000}{1.75} }[/tex]
EOQ = 414 rolls
They should order 414 rolls to minimize the cost.
Answer:
119 units
Explanation:
The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The ordering cost is $25 per order. Holding cost is $1.75 per unit. The total demand is 500 units per month. The economic order quantity that will minimize the cost of the GoT cups is
EOQ = [tex]\sqrt{\frac{2*Demand*ordering cost}{Holding cost} }[/tex]
EOQ is 119 units.
Rahman stock just paid a dividend of $3.00 per share. Future dividends are expected to grow at a constant rate of 6% per year. What is the value of the stock if the required return is 12%
Answer:value of stock for the required return of 12 % = $53
Explanation:
Given
current dividend just paid = $3.00
dividend to grow at constant rate of 6%
required rate of return =12%
to calculate the value of stock for the requitred return of 12 % , we use the dividend growth model which is
Current price = dividend ( 1 + growth rate )/ (required rate -growth rate )
= 3 x (1+6%) / 12-6 = 3 x 1.06 /6% =3.18/0.06= $53
Therefore value of stock for the requitred return of 12 % ,= $53
You are feeling overwhelmed by the number of potential goals you could set for your business unit. You ask your colleague Dan for advice on the process he uses to set goals. Which of the following suggestions from Dan is wrong? He suggests that you
Answer:
prioritize goals according to their value to the organization
Explanation:
Goal setting is an action plan that is set to motivate someone towards achieving a goal. Individuals, organizations set goals as part of their personal development plans hence must be Specific, Measurable, Action oriented, Realistic and Timely(SMART).
With regards to the above scenario, prioritizing goals according to their value to the organization is wrong. While it is important to prioritize goals, such must however be made to align with the business's strategic objectives.
It is also important to stick to goals already set instead of constantly changing them. Sometimes too, customers put pressure on business owners to consider certain goals which might be beneficial; such should also be looked into after considering their pros and cons.
McCall Corporation has a capital structure consisting of 55 percent common equity, 30 percent debt, and 15 percent preferred stock. Any debt issues would have a pre-tax cost of 9.5%. Preferred stock can be issued for a cost of 11.5%. Common equity can be issued, but flotation costs of $4.25 per share of common stock would be paid. McCall common stock is currently selling in the market at $65 per share. McCall recently paid a dividend of $4 per share and company earnings and dividends are expected to grow at an annual rate of 8% indefinitely. McCall has a marginal tax rate of 35% and the firm wants to keep its current capital structure. If the firm needs to raise additional equity, what will be the firm's cost of capital?
Answer:
WACC = 12.14%
Explanation:
Cost of debt = 9.5% x (1 - 35%) = 6.175%
Cost of preferred stock = 11.5%
Cost of equity (Re) = {D₁ / [P₀(1 - F)]} + g
Re = {($4.25 x 1.08) / [$65 x (1 - $4.25/$65)]} + 8% = ($4.59 / $60.75) + 8% = 15.56%
WACC = (15.55% x 0.55) + (6.175% x 0.30) + (11.5% x 0.15) = 8.56% + 1.85% + 1.73% = 12.14%
Cobe Company has already manufactured 17,000 units of Product A at a cost of $20 per unit. The 17,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5, 800 units of Product B and 11, 400 units of Product C. Per unit selling price for Product B is $107 and for Product C is $52.
Prepare an analysis that shows whether the 17,000 units of Product A should be processed further or not.
Sell as is ProcessFurther
Sales
Relevant costs:
Total relevant costs
Income (loss)
Incremental net income (or loss) if processed further
The company should
Answer:
differential analysis:
No further process Process further Differential
amount
Sales revenue $410,000 $1,213,400 $803,400
Production costs ($340,000) ($580,000) ($240,000)
Operating income $70,000 $633,400 $563,400
The company should process further and sell products B and C because its operating income will increase by $563,400.
You short-sell 100 shares of Tuckerton Trading Co., now selling for $44 per share. What is your maximum possible gain, ignoring transactions cost
Answer:
$4,400
Explanation:
Calculation for the maximum possible gain, ignoring transactions cost
Using this formula
Maximum possible gain = Sale proceeds - Cost of purchasing the share
Let plug in the formula
Maximum possible gain = (100 shares *$44 per shares)- (100 shares *0) = 14000
Maximum possible gain=$4,400-0
Maximum possible gain=$4,400
Therefore the maximum possible gain, ignoring transactions cost will be $4,400
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected Return Standard Deviation Stock fund (S) 15 % 32 % Bond fund (B) 9 % 23 % The correlation between the fund returns is 0.15. What is the Sharpe ratio of the best feasible CAL?
Answer:
0.296875
Explanation:
Given the following :
Probability distribution of risky funds :
- - - - - - - - - - - - - - stock fund(S) - - bond fund(B)
Expected return - - - 15% - - - - - - - - - - 9%
Std - - - - - - - - - - - - - 32% - - - - - - - - - - 23%
Correlation between funds return = 0.15
Sure rate = 5.5%
To calculate the Sharpe ratio we use the formula :
Sharpe Ratio = (Expected Return of Investment - Risk Free Rate) / Standard Deviation of excess return of investment
For the stock fund :
Expected return = 15%
Risk free rate = market sure rate = 5.5%
Standard deviation = 32%
Sharpe ratio of stock fund :
(15% - 5.5%) / 32%
= 9.5% / 32%
= 0.296875
For Bond fund :
Expected return = 9%
Risk free rate = market sure rate = 5.5%
Standard deviation = 23%
Sharpe ratio of bond fund :
(9% - 5.5%) / 23%
= 3.5% / 23%
= 0.1521739
Therefore the Sharpe ratio of the best feasible CAL is the higher of the two ratios which is 0.296875
The failure to record a purchase of mer chandise on account even though the goods are properly included in the physical inven tory results in
Answer: D. an understatement of expenses and an overstatement of owners' equity
Explanation:
If a purchase of merchandise was not recorded, it would mean that Purchases being an expense that contributes to the Cost of Goods sold would be understated.
This understatement would mean that the the Net income is overstated because the purchase expenses were never deducted from it. Net Income is part of owners' equity so if it is overstated, so is owners' equity .
The IMF policies that accompany most IMF loans are typically: Multiple Choice expansionary in the short run. procyclical in the long run. contractionary in the long run. contractionary in the short run.
Answer:
contractionary in the long run
Explanation:
contractionary fiscal policy reduces spending and raises taxes. it contract the economy by reducing the amount of money that is available for businesses and for people to spend. it could reduce government expenditure or increase taxes or in other times do both. useful during inflation
TB MC Qu. 9-100 The following labor standards have been ... The following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.6 hours Standard labor rate $ 13.40 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 7,400 hours Actual total labor cost $ 96,200 Actual output 950 units What is the labor efficiency variance for the month
Answer:
Direct labor time (efficiency) variance= $23,048 favorable
Explanation:
Giving the following information:
Standard labor-hours per unit of output 9.6 hours
Standard labor rate $ 13.40 per hour
Actual hours worked 7,400 hours
Actual output 950 units
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 9.6*950= 9,120
Direct labor time (efficiency) variance= (9,120 - 7,400)*13.4
Direct labor time (efficiency) variance= $23,048 favorable
On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.
Answer and Explanation:
The journal entry to record the given transaction is shown below:
Prepaid rent Dr $10,140
To Cash $10,140
(Being the prepaid annual rent paid in cash is recorded)
For recording this we debited the prepaid rent as it increased the assets and credited the cash as it reduced the cash so that the proper posting could be done
Carpenter Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,400 units. The costs and percentage completion of these units in beginning inventory were: 2 points Percent Complete 60% 55% Cost $ 7,000 $10,300 Materials costs Conversion costs 01:53:47 A total of 10,500 units were started and 8.900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: eBook Materials costs Conversion costs $ 96,800 $171,000 References The ending inventory was 85% complete with respect to materials and 70% 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. 4,000
b. 1,800
c. 8.100
d. 1,600
Answer:
a. 4,000
Explanation:
Units in ending inventory
= Units in beginning work in process + Units started into production - Units transferred to the next department
= 2,400 + 10,500 - 8,900
= 4,000 units
A coworker of Connor's recommends that she maximize the shelf space devoted to those drinks with the highest contribution margin per case. Do you agree with this recommendation? Explain briefly.
Answer:
Yes
Explanation:
Ultimately I agree with the recommendation that has been given by Connor's coworker. By maximizing the shelf space specifically devoted to these drinks it will cause two things to happen. First, customers will mostly notice those drinks which will entice them to buy those drinks instead of the ones they cannot see. The second is that since customers are buying more of these drinks, the increase in sales will also increase profits, but since these items contribution margins are significantly higher than the others, it will cause profits to drastically increase.
In 2019, Tim sells Section 1245 property for $28,000 that he had purchased in 2009. Tim has claimed $5,000 in depreciation on the property and originally purchased it for $15,000. How much of the gain is taxable as ordinary income?
Answer:
The taxable amount at an ordinary rate = $5000
Explanation:
The selling price of a property in 2019 is = $28000
The depreciation on the property = $5000
Original purchased price of property = $15000
Adjusted tax = an orginal price – depreciation
Adjusted tax = 15000 – 5000 = $10000
Gain = selling price – adjusted tax
Gain = 28000 – 10000 = $18000
The part of gain ($18000) that is taxable as ordinary rate = $5000
Here, $13000 will be taxed as section 1231 as a gained tax at capital gain rate.
In this module, you learned about the risks or costs associated with financial goals. What are the risks or costs associated with your goal, and how can you overcome these challenges
Answer with Explanation:
My goal is to start a business totally based on a new idea with great potential to influence the lives of the people of America. For this I had worked on a startup idea for couple of years and continuously reforming it.
The biggest risks associated with this goal is funding problems, business risks, market research, innovation issues and Software designing issues.
Now these are some risks that I face but I overcome these challenges by:
Risks Solution
Funding Risk: By presenting my startup idea on a international competition by writing business proposal based on well researched market, product innovation and the financial prospect of the business. There are numerous accelerator programs operated by the state and other organizations that encourage startups and helps with numerous facilities. So I will also present my idea here to secure funding from a wider number of investors.
Business Risks: Giving special considerations to business risks and their mitigation strategies.
Innovation: The products will be innovative enough to generate handsome amount of profit and must be capable of giving tough time to its competitors.
Market Research: The best performing businesses know who their customers are and what they are desiring from them. So market research would capable of identifying my potential customers and that it must be representative of the sample taken.
Software Designing: The software design must be user friendly and must effectively resolve users issues. Furthermore, it must be continuously updated with better features and friendly functioning.
Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,000; sales of $4,525,000; cost of goods sold of $2,550,000; and operating expenses of $1,372,000. Compute the division's return on investment:
Answer:
14.7%
Explanation:
The computation of return on investment is shown below:
Return on Investment = Net Income ÷ Average total assets × 100
where,
Net Income is
= Sales - Cost of goods sold - Operating expense
= $4,525,000 - $2,550,000 - $1,372,000
= $603,000
And,
Average total assets = $4,100,000
So,
Return on Investment is
= $603,000 ÷ $4,100,000 × 100
= 14.7%
