Question Completion with Options:
1. Interactional Fairness
2. Distributive Fairness
3. Procedural Fairness
4. Trust
Answer:
1. Managerial skills being illustrated in each of the examples presented:
a. Trust
b. Interactional fairness
c. Distributive fairness
2. 1. First impression bias
Explanation:
Trust: Here, Charles showed a lack of trust in one of his colleagues who was a gossip.
Interactional fairness: The quality of time spent interacting with another person can improve perceptions and relationships.
Distributive fairness: This involves a comparison of outcome with the cost incurred to earn the benefit.
Procedural fairness requires fairness in decision-making without bias.
Use the following payoff matrix for a simultaneous-move one-shot game to answer the accompanying questions.
Player 2
Strategy C D E F
Player 1 A 10, 23 14, 20 20, 16 22, 14
B 14, 26 8, 5 20, 9 19, 14
Determine player 1’s equilibrium payoff.
Answer:
Player 1 strategy BPlayer 2 strategy CExplanation:
Player 1
If Player 1 chooses strategy A
then the player 2's best outcome of 23 comes from strategy C.
If Player 1 chooses strategy B
then the player 2's best outcome of 26 comes from strategy C.
Player 2
If Player 2 chooses strategy C,
then the player 1's best outcome of 14 comes from strategy B.
If Player 2 chooses strategy D
then player 1's best outcome of 14 comes from strategy A.
If Player 2 chooses strategy E
then player 1's best outcome of 20 comes from strategies A and B.
If Player 2 chooses to strategy F
then player 1's best outcome of 22 comes from strategy A.
Hence, the better off play of both player is as follow
Player 1 plays strategy BPlayer 2 plays strategy CXYZ Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,180 square feet and the actual level of activity was 1,270 square feet. The company's owner budgets for supply costs, a variable cost, at $3.50 per square foot. The actual supply cost last month was $4,980. What would have been the spending variance for supply costs
Answer:
The appropriate solution is "$535 U". A further explanation is described below.
Explanation:
The given values are:
Actual level of activity,
= 1270
Budgeted variable cost,
= $3.50
Actual supply cost,
= $4980
Now,
The spending variance for supply costs will be:
= [tex](Actual \ level \ of \ activity\times Budgeted \ variable \ cost)\times Actual \ supply \ cost[/tex]
= [tex](1270\times 3.50)-4980[/tex]
= [tex]4445-4980[/tex]
= [tex]535[/tex] (unfavorable)
A company is evaluating a new 4-year project. The equipment necessary for the project will cost $3,500,000 and can be sold for $715,000 at the end of the project. The asset is in the 5-year MACRS class. The depreciation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company's tax rate is 34 percent. What is the aftertax salvage value of the equipment?
Hint: 1. Find the remaining book value at the end. 2. Subtract this from the expected sale price to find the gain on sale. 3. Apply the tax rate to this gain to find the taxes owed. 4. The after-tax salvage value is the sale price minus the taxes.
a) $715,000.
b) $752,468.
c) $540,444.
d) $677,532.
e) $471,900.
Answer:
d) $677,532.
Explanation:
1.
Written down value of the equipment after 4 years = Cost x ( 100% - 1st year MACRS - Second-year MACRS - Third-year MACRS - Fourth-year MACRS ) = $3,500,000 x ( 100% - 20% - 32% - 19.20% - 11.52% ) = $604,800
2.
Now calculate the gain on the sale of equipment
Gain on the sale of equipment = Sale Price - Written down Value after 4 years = $715,000 - $604,800 = $110,200
3.
Tax owed = Gain on the sale x Tax rate = $110,200 x 34% = $37,468
After-tax salvage value = Sales price - Tax = $715,000 - $37,468 = $677,532
Financial statement data for Delicious Dishes, Inc. are given below. All figures are in dollars. Use this data to construct an Income Statement for the year ending December 31, 2020 and use your constructed statement to answer the following question
Advertising 384,000
Beginning of year inventory 1,243,000
Depreciation 350,000
End of year inventory 1,128,000
General and administrative expenses 1,184,000
Gross sales 28,242,000
Interest expense 150,000
Lease payments 148,000
Management salaries 4,253,000
Purchases 18,243,000
Research and development 324,000
Returns and allowances 564,000
Taxes 925,000
Required:
What was gross profit from income statement for the year ending December 31, 2020?
Answer:
Delicious Dishes, Inc.The gross profit from income statement for the year ending December 31, 2020 is:
= $9,320,000.
Explanation:
a) Data and Calculations:
Advertising 384,000
Beginning of year inventory 1,243,000
Depreciation 350,000
End of year inventory 1,128,000
General and administrative expenses 1,184,000
Gross sales 28,242,000
Interest expense 150,000
Lease payments 148,000
Management salaries 4,253,000
Purchases 18,243,000
Research and development 324,000
Returns and allowances 564,000
Taxes 925,000
Depreciation 350,000
Delicious Dishes, Inc.
Income Statement for the year ending December 31, 2020
Gross sales $28,242,000
Returns and allowances (564,000)
Net sales $27,678,000
Less Cost of Goods Sold:
Beginning of year inventory 1,243,000
Purchases 18,243,000
End of year inventory (1,128,000) $18,358,000
Gross profit $9,320,000
Other Expenses:
Advertising $384,000
General and administrative expenses 1,184,000
Management salaries 4,253,000
Research and development 324,000
Interest expense 150,000
Lease payments 148,000
Total expenses $6,443,000
Profit before taxes 2,877,000
Taxes 925,000
Net income $1,952,000
g Suppose you are thinking of loaning out some money. You would like to get a real rate of return of 10% on your loan and the rate of inflation is anticipated to be 4%. What interest rate should you charge on your loan
Answer:
14%
Explanation:
Using the AS-AD and IS-LM models, show the effects of an increase in consumer confidence on the position of the AD, AS, IS, and LM curves in the short run and in the medium run. Precisely label all axes and curves to receive full credit. Label the short-run equilibrium and medium-run equilibrium with SR and MR, respectively.
Answer: hello your question has some missing information below is the missing information
Suppose the economy begins with output equal to its natural level. Then there is an increase in consumer confidence and households attempt to consume more for a given level of disposable income.
answer :
Attached below
Explanation:
IS-LM modeling curves intersects and it also defines the value of r and Y where r ( rate of interest ) Y( output level )
The AS-AD modeling is in equilibrium where aggregate demand curve and short run and long run aggregate supply curves intersects each other defining P and Y
p ( price level ) , Y ( output level )
Note : Increase in aggregate demand shifts IS outward , raises interest rate and output level
The following events took place in January 2018. Sports Equipment Rentals (SER) rents equipment on an hourly or daily basis to customers. SER prepares monthly financial statements. Match each event with the choice that correctly describes the effect of the transaction on the accounting equation. Increase/decrease means one asset account increases and another decreases by the same amount. Use this selection for the next eight questions: Assets Liabilities EquityA. Increase No effect Increase B. Increase Increase No effectC. No effect Decrease IncreaseD. Increase/Decrease No effect No effectE. No TransactionJanuary 3: SER purchases $2,000 of sports equipment on credit. January 8: Customers pay SER $8,500 for daily rentals for services provided over the past three days. January 16: SER receives $4,000 for a 2-week rental for equipment for several teams. The rental period begins on February 10, 2014. January 17: SER signs an agreement to provide $4,500 of equipment to a customer in early February. The customer has not yet made a payment. January 25: SER receives $3,000 for services provided and billed in the prior month. January 30: SER rents out skates for a party that day and bills the customer for $300.January 30: SER completes a contract by providing rental equipment to a private school from January 17-30. The school paid $500 for the rental in December 2000. January 31: SER receives $120 in interest on a note receivable. (SER loaned an employee $10, 000 last November and the employee is paying SER monthly interest. The employee will repay the $10, 000 principal after one year.)
Answer:
Payment received from Debtor: it'll increase Assets by $3,000 and reduce another asset by $3,000.Therefore, Il won't affect the financial position of SER. it's just a substitution of 1 sort of asset into another
Explanation:
Accounting Equation: Assets = Equity + Liability
All the business transaction affects the equation supported double accounting concept. The above transaction will affect the equation in the following manner.
Credit purchase of equipment: it'll increase Assets by $2,000 and Liability also by $2,000.
Daily rental received by SER: it'll increase Assets by $8,500 and Equity by $8,500. Daily rental is that the income of SER so it'll increase profitability and equity.
Rent received for Feb month: it'll increase Assets by $4,000 and Liability by $4,000. Advance rent is going to be treated as a liability until the proper receive the rent being established.
it'll not affect the equation because merely signing an agreement with no payment for the services won't end in any assets or liability.
Payment received from Debtor: it'll increase Assets by $3,000 and reduce another asset by $3,000.Therefore, Il won't affect the financial position of SER. it's just a substitution of 1 sort of asset into another
In Myanmar, six laborers, each making the equivalent of $3.00 per day, can produce 40 units per day. In China, ten laborers, each making the equivalent of $2.00 per day, can produce 45 units. In Billings, Montana, two laborers, each making $60.00 per day, can make 100 units. Based on labor cost per unit only, the most economical location to produce the item is
Answer:
China
Explanation:
Calculation to determine which location would be most economical to produce the item
Using this formula
LaborCost per Unit=Labor Cost per Day/Production(units per day)
Let plug in the formula
Myanmar = 6 Laborers x $3/day = $18/day
Myanmar=$18/day/ 40 units
Myanmar= $0.45/unit
China = 10 Laborers x $2/day = $20/day
China= $20/day/ 45 units
China= $0.444/unit
Montana = 2 Laborers x $60/day = $120/day
Montana= $120/day/100 units
Montana = $1.20/unit
Therefore the location that would be most economical to produce the item is CHINA
Disney suffered lawsuits in France, at Disneyland Paris, because of the lack of fit between its transferred personnel policies and the French employees charged to enact them. This is an example of the: Group of answer choices effect of demand conditions. liability of foreignness. risks of a multidomestic strategy. effects of regionalization.
Answer:
liability of foreignness
Explanation:
Liability of foreignness is defined as the cost above what local firms incur that is realised by companies that operate in a foreign country.
This extra cost is influenced by various business environments that exist in the foreign country.
In the given scenario Disneyland Paris is suffering loss through lawsuits because of the lack of fit between its transferred personnel policies and the French employees charged to enact them.
This conflict is giving an extra cost profile which is referred to as liability of foreignness.
First Class, Inc., expects to sell 28,000 pool cues for $14 each. Direct materials costs are $3, direct manufacturing labor is $5, and manufacturing overhead is $0.82 per pool cue. The following inventory levels apply to 2019: Beginning inventory Ending inventory Direct materials 26,000 units 26,000 units Work-in-process inventory units O units Finished goods inventory 1,300 units 2,800 units
How many pool cues need to be produced in 2019?
Select one:
a. 29,500 cues
b. 30,800 cues
c. 29,300 cues
d. 26,500 cues
Answer:
a. 29,500 cues
Explanation:
Calculation to determine How many pool cues need to be produced in 2019
Using this formula
Pool cues needed =Budgeted sales +Budgeted ending inventory-Beginning inventory
Let plug in the formula
Pool cues needed=28,000 units + 2,800- 1,300 Pool cues needed= 29,500 cues
Therefore pool cues need to be produced in 2019 is 29,500 cues
If a court determines that a manager's corporate decision amounted to self-dealing, a. the manager is automatically personally liable to the corporation. b. the transaction being challenged will be automatically voided. c. the manager will automatically be fired. d. the business judgment rule will not apply.
Answer:
d. the business judgment rule will not apply.
Explanation:
A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.
One of the advantage of a corporation is that, owners have limited liability for debt to the extent to which they have invested and as such are not personally liable for some of debt owed by corporation.
A manager can be defined as an individual who is saddled with the responsibility of providing guidance, support, supervision, administrative control, as well as acting as a role model or example to the employees working in an organization by being morally upright.
Generally, managers are typically involved in taking up leadership roles and as such are expected to be build a strong relationship between their employees or subordinates by creating a fair ground for effective communication and sharing of resources and information. Also, they are required to engage their staff members (entire workforce) in the most efficient and effective manner.
In Business management, if a court of competent jurisdiction determines that a manager's corporate decision amounted to self-dealing i.e putting his or her own interests first, the business judgment rule will not apply.
Generally, in order for the business judgement rule to apply, it is expected or required that a manager should act in the best interest of a corporation.
The contribution margin ratio is 25% for Grain Company and the break-even point in sales is $200,000. To obtain a target net operating income of $60,000, sales would have to be:_____.
A. $260,000.
B. $440,000.
C. $280,000.
D. $240,000.
Answer:
Option B. 440000
Explanation:
Given the contribution margin = 25%
Sales at break-even point = $200000
Net operating income = $60000
Sales at break even point = TFC / contribution margin ratio
200000 = TFC / 25%
TFC = 50000
Now find the net income:
Net income = Contribution margin - Fixed cost
60000 = Contribution margin - 50000
Contribution margin =60000 + 50000 = 110000
Sales revenue = Contribution margin / contribution ratio
Sales revenue = 110000 / 0.25 = 440000
Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.
a. I sold a used textbook for $54, even though I was willing to go as low as $48 in order to sell it.
b. Even though I was willing to pay up to $71 for a watch, I bought a watch for only $65.
c. Even though I was willing to pay up to $63 for a jersey sweater and even though the seller was willing to go as low as $54 in order to sell it, we couldn't reach a deal because the government imposed a price floor of $68 on the sale of sweaters.
Answer:
producer surplus
consumer surplus
neither
Explanation:
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Consumer surplus = willingness to pay – price of the good
The highest amount i was willing to buy the watch is $71 but the price was $65. this illustrates a consumer surplus
Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product
Producer surplus = price – least price the seller is willing to accept
The least amount the textbook seller was willing to sell was $48 while the price the textbook was sold was $54. thus, a illustrates a producer surplus.
for statement c, a transaction did not take place, so, it is neither a producer or consumer surplus
Indicate whether each of the following transactions represents the purchase of a final good.
a. the purchase of wheat from a wheat farmer by a bakery.
b. the purchase of an aircraft carrier by the federal goverment
c. the purchase of frenche wine by a U.S. consumer
d. the purchase of a new airliner by American Airlinesa
Answer:
b. the purchase of an aircraft carrier by the federal goverment - purchase of a final good.
c. the purchase of frenche wine by a U.S. consumer - purchase of a final good.
d. the purchase of a new airliner by American Airlinesa - purchase of a final good.
Explanation:
A final good is a good that is consumed directly by consumers
Purchase of final good can be classfied into :
Consumption spending includes spending by households on goods and services. Consumption spending includes :
spending on durables - e.g. laptop
spending on nondurables - e.g. clothes, food
spending on services - e.g. payment of hospital bill
the purchase of french wine is an example of consumption spending on nondurable goods
Investment - It includes purchases of goods and services made by businesses in the production of goods and services
the airplane purchased by the airline would be used to provide services for airline customers.
Government spending - It includes government consumption expenditure and gross investment. Consumption spending includes spending by households on goods and services. Consumption spending includes :
spending on durables - e.g. laptop
spending on nondurables - e.g. clothes, food
spending on services - e.g. payment of hospital bill
the purchase of a textbook by a student is an example of consumption spending on durable goods
Investment - It includes purchases of goods and services made by businesses in the production of goods and services
the airplane purchased by the airline would be used to provide services for airline customers.
Government spending - It includes government consumption expenditure and gross investment. The purchase of a new limousine for the president is an example of consumption expenditure
An intermediate good is a good that is used in the production of the final good. e.g. tthe purchase of wheat from a wheat farmer by a bakery would be used to make pastries.
Non-Market Strategy (NMS) is defined most accurately by which of the following (choose all accurate responses)?
a. NMS is related to Triple Bottom Line concerns.
b. NMS, exclusively, is not related to economic concerns.
c. NMS considers how managers anticipate and preempt, respond and react to actors, influencers, issues and actions from the social, political and regulatory arenas in society.
d. NMS is relevant to mostly social enterprises and infrequently involves large MNES.
e. NMS recognizes that businesses are social, political and ethical entities.
f. NMS is only a trend that is generally lost in "green washing" where MNEs pursuc causes to make it look like they are concerned when they are not
Answer:
Non-Market Strategy (NMS) is defined most accurately by the following:
a. NMS is related to Triple Bottom Line concerns.
c. NMS considers how managers anticipate and preempt, respond and react to actors, influencers, issues and actions from the social, political and regulatory arenas in society.
e. NMS recognizes that businesses are social, political and ethical entities.
Explanation:
Non-Market Strategy (NMS) is a business strategy that recognizes and evaluates the environmental, financial, and social performances of corporate entities. It emphasizes the use of soft power to achieve competitive economic goals by targeting political, institutional, and social influencers. Non-Market Strategy encourages wider interactions outside the market to encompass and carter for the interests of individuals, social institutions, and government entities.
There are linkages between the microeconomic decisions made by managers and the macroeconomic environment. There are numerous examples from the current recession of company layoffs at the micro level, directly influenced by the decline in economic activity at the macro level. For this assignment, research this linkage. How did the recession impact businesses/managers at the macro and micro levels? You may use one company as the basis of your research.
Answer:
One typical example of this linkage between the economy at the macroeconomic level, and business decisions at the macroeconomic and microeconomic level, is what happened with Lehman Brothers in 2008.
Explanation:
Lehman Brothers was one of the main investment banks in the United States. During the years prior to the financial crisis, Lehman Brothers decided to pursue a risky but profitable strategy of over leveraging -lending a lot more money than they had as deposits.
Once the financial crisis hit, a macroeconomic event, it affected the company at the macro and micro level. At the macro level because Lehman Brothers itself ceased to exist as it went bankrupt, and at the micro level, because it had to enter a process to pay off some debtors, and some of the employees who were laid off due to the dissolution of the firm.
Use the following abbreviations to indicate the journal in which you would record transactions a through n.
a. Cash purchase of merchandise inventory
b. Collection of dividend revenue earned on an investment
c. Prepayment of insurance
d. Borrowing money on a long-term note payable
e. Purchase of equipment on account
f. Cost of goods sold along with a credit sale
g. Cash sale of merchandise inventory
h. Payment of rent
i. Depreciation of computer equipment
j. Purchase of merchandise inventory on account
k. Collection of accounts receivable
l. Expiration of prepaid insurance
m. Sale on account
n. Payment on account
Answer:
Transactions Appropriate Journal
a. Cash Payment Journal
b. Cash Receipt Journal
c. Cash Payment Journal
d. Cash Receipt Journal
e. General Journal
f. General Journal
g. Cash Receipt Journal
h. Cash Payment Journal
i. Adjusting Journal
j. Purchases Journal
k. Cash Receipt Journal
l. Adjusting Journal
m. Sales Journal
n. Cash Payment Journal
Explanation:
Journals are used to record transactions as they occur on a daily basis. They are the first records made of transactions. Journals indicate the accounts involved in each transaction. They indicate the accounts to be debited and the accounts to be credited in accordance with the double entry system of accounting.
The Anson Jackson Court (AJC) currently has $150,000 market value (and book value) of perpetual debt outstanding carrying a coupon rate of 6%. Its earnings before interest and taxes (EBIT) are $89,000, and it is a zero growth company. AJC's current cost of equity is 10%, and its tax rate is 25%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $60.00. Refer to the data for Anson Jackson Court (AJC). AJC is considering moving to a capital structure that is comprised of 25% debt and 75% equity, based on market values. The new funds would be used to replace the old debt and to repurchase stock. It is estimated that the increase in risk resulting from the additional leverage would cause the required rate of return on debt to rise to 6.56%, while the required rate of return on equity would rise to 10.07%. If this plan were carried out, what would be AJC's new WACC and total value
Answer:
The answer is "8.78%; $760,034"
Explanation:
Please find the complete solution in the attached file.
Why are marketers sometimes "forced” to reposition their products or services? Il
your answers with examples.
Iar
Explaination
Marketers sometimes forced to reposition their services or products to ensure profitability the company has no other option but to reposition its services or products that would cater to a new target segment of their existing market and ensure sales or profitability.
ReasonThere could be many reasons for marketers repositioning their products.
The products are evolving and getting more features into it. They needs to marketed differently in order to make the customers aware of the new features, add-ons. In this case, it is better to reposition the products.
Explain five planning steps that are required to have a good business communication. Take any of the business as example and implement those five planning steps on it, as answer
The correct answer to this open question is the following.
Although you did not include any specific context or references, we can say the following.
The five planning steps that are required to have good business communication are the following.
1.- Establish attainable and specific goals. You can use the SMART formula.
2.- Identify who ypur audience is and where they are so you can be effective in sending your messages.
3.- Prepare the right strategy to implement your program. Have your communication department on the same page.
4.- Prepare the proper budget so you can run your program.
5.- Perform your program, monitor it, and evaluate your results.
For instance, Walmart is a corporation that makes communication a priority and invests time and money to run communications programs so every employee in the corporation is on the same page and can perform their jobs effectively, eliminate rumors, and be productive.
Assume that Nortel manufactures specialty electronic circuitry through a unique photoelectronic process. One of the primary products, Model ZX40, has a standard labor time of 0.5 hour and a standard labor rate of $12.50 per hour. During February, the following activities pertaining to direct labor for ZX40 were recorded:
Direct labor hours used 2,230
Direct labor cost $34,000
Units of ZX40 manufactured 4,800
Required:
a. Determine the labor rate variance.
b. Determine the labor efficiency variance.
c. Determine the total flexible budget labor cost variance.
Answer:
A = $6,125
B = $2,125
C = $6,125
Explanation:
Standard Labor Time = 0.5 hours, Standard Labor rate = $12.50 per hour, Standard Time = 4800 * 0.5hour P U = 2400 hours
Actual labor time used = 2,230, Direct labor Cost = $34,000 per hour =$15.25 , Units manufactured = 4,800
(a) Labor Rate Variance = Actual Cost - standard cost of Actual Hours = $34,000 - ($12.50 * 2230) = $34,000 - $27,875 = $6,125 Favorable
(b) Labor Efficiency Variance = Standard Cost of Actual Hours - Standard Cost = (2,230 * 12.50) - (12.50 * 2400) = $27,875 - $30,000 = $2,125 Unfavorable
(c) Flexible budget labor cost variance = Flexible Budget cost - Actual Cost = (Actual qty * Std Rate) - (Actual qty - Actual Rate) = (2,230 * $12.50) - $34,000 = $27,875 - $34,000 = $6,125 Unfavorable
Which of the following is not a traditional training method?
A) classroom lectures B) experiential exercises C) videoconferencing D) workbooks
B) Experimental Exercises
Which of the following is an example of investment? A. the purchase of a new assembly line by Ford B. a person money adding money to his retirement fund C. a student increasing his human capital by attending college D. a person depositing $ 100 a week to her savings account
Answer:
Option A
Explanation:
In simple words, To invest means to set aside money in the hope of receiving a favorable benefit or profit in the hereafter. To put it another way, to invest is to possess an asset or an item with the intention of earning money from it or benefiting from the appreciation of your investment, which is a growth in the object's value over time.
Thus, from the above we can conclude that the correct option is A.
Since the middle of the 20th century, the international global business system has been shaped by global institutions. Countries have established these institutions to address the global issues that span their borders.
a. True
b. False
Answer:
a. True
Explanation:
This statement is correct, as global institutions were created with the objective of regulating global business from international treaties, which implemented a set of rules and regulations that must be followed by all organizations in a global market, as a form of protection to organizations, society and the environment, such as legislative and economic changes, crises and possible negative impacts inherent to organizations in a global business system.
Please help I don’t understand
Botosan Factory has budgeted factory overhead for the year at $717,474, and budgeted direct labor hours for the year are 364,200. If the actual direct labor hours for the month of May are 331,400, the overhead allocated for May is
Answer:
$652,858
Explanation:
Predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activity
= $717,474 ÷ 364,200
= $1.97 per direct labor hour
Allocated overheads = Predetermined overhead rate x Actual Activity
= $1.97 x 331,400 direct labor hours
= $652,858
therefore,
The overhead allocated for May is $652,858.
Mike is planning to invest his savings in a savings account. He manages to deposit $1,000 at the end of the first year, $700 at the end of the second year, $1,500 at the end of the third year, and $600 at the end of the fourth year. If the account earns 7 percent interest each year, what is the terminal value of this uneven cash flow stream? (Round your answer to two decimal places.)
Answer:
$ 4,231.47
Explanation:
By terminal value, it means the value of savings deposit at the end of the fourth year bearing in mind the first deposit made at the end of year 1 would only earn interest in years 2,3 and 4 , the second deposit would interest in years 3 and 4 since it was made at the end of year 2 and so on .
Future value of deposits=deposit*(1+annual interest rate)^n
n is the number of years that the each deposit would earn interest
terminal value=$1,000*(1+7%)^3+$700*(1+7%)^2+$1500*(1+7%)^1+$600*(1+7%)^0
terminal value=$ 4,231.47
Equipment acquired at the beginning of the year at a cost of $30,800 has an estimated residual value of $2,800 and an estimated useful life of four years. Determine the following: (a) The depreciable cost $fill in the blank 1 (b) The straight-line rate fill in the blank 2 % (c) The annual straight-line depreciation $fill in the blank 3
Answer:
$28000
25%
$7000
Explanation:
Depreciable cost = cost of the asset - residual value
$30,800 - $2800 = $28,000
The straight-line rate = annual depreciation expense / Depreciable cost
7000 / 28,000 x 100 = 25%
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
$28,000 / 4 = $7000
Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2019. Assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year then ended.
Accounts receivable $33,000
Depreciation expense 12,000
Land 27,000
Cost of goods sold 90,000
Retained earnings 59,000
Cash 9,000
Equipment 71,000
Supplies 6,000
Accounts payable 23,000
Service revenue 20,000
Interest expense 4,000
Common stock 10,000
Income tax expense 12,000
Accumulated depreciation 45,000
Long-term debt 40,000
Supplies expense 14,000
Merchandise inventory 31,000
Sales revenue 140,000
Required:
a. Calculate the total current assets at December 31, 2019.
b. Calculate the total liabilities and owners’ equity at December 31, 2019.
c. Calculate the earnings from operations (operating income) for the year ended December 31, 2019.
d. Calculate the net income (or loss) for the year ended December 31, 2019.
e. What was the average income tax rate for Pope’s Garage for 2019?
f. If $16,000 of dividends had been declared and paid during the year, what was the January 1, 2019, balance of retained earnings?
Answer and Explanation:
a. The computation of the total current asset is shown below
= Account receivable + cash + supplies + merchandise inventory
= $33,000 + $9,000 + $6,000 + $31,000
= $79,000
b The total liabilities and owners equity is
= Account payable + long term debt + common stock + retained earnings
= $23,000 + $40,000 + $10,000 + $59,000
= $132,000
c. The earnings from operations is
Sales revenue $140,000
Less cost of goods sold $90,000
Gross profit $50,000
add: service revenue $20,000
Less depreciation expense $12,000
Less supplies expense $14,000
Operating income $44,000
d. The net income is
= operating income - interest expense - income tax expense
= $44,000 - $4,000 - $12,000
= $28,000
e. The average income tax rate is
= $12,000 ÷ $40,000 × 100
= 30%
f. The beginning retained earnings is
= $59,000 + $16,000 - $28,000
= $47,000
Classity each of the following items as a final good or an intermediate good, and classifly the expenditure on each final good.
Item 1. A DVD bought by a household.
item 2. New computers bought by PepsiCo
Item 3. New aircraft bought by Southwest Airlines
item 4. Fertilizer bought by a Florida tomato grower.
Item 1 is ________ and Item 2 _________.
Answer:
Item 1. A DVD bought by a household. - This is a final good, to be used for entertainment purposes, and a consumption expenditure.
item 2. New computers bought by PepsiCo - This is a final good, meant to be used for administrative purposes by PepsiCo. It is an investment expenditure because the new computers are an asset.
Item 3. New aircraft bought by Southwest Airlines - This is a final good, to be used as an asset by the airline in order to transport passengers from one place to another. This is an investment expenditure because the aircraft will be used to produce economic benefits for the company.
item 4. Fertilizer bought by a Florida tomato grower - This is an intermediate good, because it is bought in order to be used in the production process of another good, an agricultural product. This is an investment expenditure, because it is essentially intermediate inventory, a type of asset, and assets are investments.
