Answer:
Debit to Retained Earnings of $400,000
Explanation:
Based on the information given we were told that on the declaration date, the market price or the market value of the Dixon Corp shares that was been held by Palmer Corp was the amount of $400,000 which means that the entry to record the declaration of the dividend would include a debit to Retained Earnings of the amount of $400,000 which is the market value.
The entry to record the declaration of the dividend would include a debit to Retained Earnings of $400,000.
The following information should be considered:
Since the aggregate market price of the Eaten shares on the declaration date is $400,000.Therefore, at the time of recording the declaration of the dividend it should debited to the retained earning for $400,000Learn more: https://brainly.com/question/3617478?referrer=searchResults
The declaration, record, and payment dates in connection with a cash dividend of $77,000 on a corporation's common stock are October 1, November 7, and December 15.
Required:
Journalize the entries required on each date.
Answer:
Oct 1
Dr Cash Dividend $77,000
Cr Dividend Payable $77,000
Nov 7
No Entry required on the record date
Dec 15
Dr Dividend Payable $77,000
Cr Cash
Explanation:
Preparation of the Journal entries for each date
Based on the information given we were told that the cash dividend of the amount of $77,000 was a corporation's common stock are October 1, November 7, and December 15 which means that the transaction will be recorded as:
Oct 1
Dr Cash Dividend $77,000
Cr Dividend Payable $77,000
Nov 7
No Entry required on the record date
Dec 15
Dr Dividend Payable $77,000
Cr Cash
Onslow Co. purchases a used machine for $178,000 cash on January 2 and readies it for use the next day at a $2,840 cost. On January 3, it is installed on a required operating platform costing $1,160, and it is further readied for operations. The company predicts the machine will be used for six years and have a $14,000 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of.Required:Prepare journal entries to record the machine's disposal under each of the following separate assumptions: a. It is sold for $22,000 cash. b. It is sold for $88,000 cash. c. It is destroyed in a fire and the insurance company pays $32,500 cash to settle the loss claim.
Answer:
All the requirements are solved below
Explanation:
Purchase = $178,000
Ready to use cost = $2,480
Installation cost = $1,160
Salvage value = $14,000
Depreciation method = Straight line
Useful life = 6 years
Solution
Requirement A If sold for $22,000
Entry DEBIT CREDIT
Cash $22,000
Accumulated depreciation $140,000
Profit/loss on disposal $20,000
Machinery $182,000
Requirement B If sold for $88,000
Entry DEBIT CREDIT
Cash $82,000
Accumulated depreciation $140,000
Profit/loss on disposal $40,000
Machinery $182,000
Requirement C If destroyed in fire and insurance company paid $32,500
Entry DEBIT CREDIT
Cash $30,000
Accumulated depreciation $140,000
loss from fire $12,000
Machinery $182,000
Workings
Cost =$178,000 + $2,480 + $1,160
Cost = $182,000
Accumulated depreciation = ([tex]\frac{182,000-14,000}{6}x5[/tex]
Accumulated depreciation = 140,000
Costs that are capitalized because they are expected to have future value are called product costs; costs that are expensed are called period costs. This classification is important because it affects the amount of costs expensed in the income statement and the amount of costs assigned to inventory on the balance sheet. Product costs are commonly made up of direct materials, direct labor, and overhead. Period costs include selling and administrative expenses.
A service company has which of the following costs
a. Direct Material
b. Overhead Costs
c. Product Costs
d. Expensed in the period incurred
Answer:
b. Overhead Costs
d. Expensed in the period incurred
Explanation:
-Direct material refers to the cost of the material used to manufacture a product.
-Overhead costs are the costs related to the operation of the business and they can't be assigned to a good or service.
-Product Costs are the costs to manufacture a product.
-Expensed in the period incurred are the period costs which are costs not related to the production of a good.
According to these definitions, a service company has the following costs: overhead costs and expensed in the period incurred because these are costs that are not related to the creation of a product.
On the other hand, the other options direct material and product costs are not right because these costs are directly related to products.
Torrid Romance Publishers has total receivables of $3,000, which represents 20 days’ sales. Total assets are $75,000. The firm’s operating profit margin is 5%. Find the firm's ROA and asset turnover ratio.
Answer:
Assets turnover ratio= 0.73
ROA= 3.65%
Explanation:
Torrid romance publishers have a total receivables of $3,000, it represents a 20 days sales
The total assets is $75,000
The operating profit margin is 5%
= 5/100
= 0.05
The first step is to calculate the total sales
= $3,000×365/20
= $3,000×18.25
= $54,750
The asset turnover ratio can be calculated as follows
= Total sales/Total assets
= $54,750/$75,000
= 0.73
The ROA can be calculated as follows
= Assets turnover ratio×operating profit margin
= 0.73×0.05
= 0.0365×100
= 3.65%
Hence the assets turnover ratio and ROA is 0.73 and 3.65% respectively.
Which of the following conditions would necessitate the use of non-verbal communication instead of verbal communication?A) Low physical distanceB) Need for immediate feedbackC) Personal nature of communicationD) Familiarity with the listenerE) Increased noise
Answer:
E) Increased noise
Explanation:
The answer is that the condition that would necessitate the use of non-verbal communication instead of verbal communication is increased noise because the noise is any type of sound that affects the verbal communication and in a case of increased noise, it could be necessary to use non-verbal communication to be able to deliver a message.
The other options are not right because they don't affect the verbal communication in a way that forces you to use non-verbal communication.
Assuming that the firm is maximizing profits, the marginal cost of the last unit produced equals:________
Price Quantity Total cost
10 10 80
9 20 100
8 30 130
7 40 170
6 50 230
5 60 300
4 70 380
a. $4
b. $40
c. $5
d. $50
e. $6
Answer: b. $40
Explanation:
A firm maximises its profits where Marginal Revenue equals marginal cost.
Marginal revenue is the additional revenue gained by selling one more unit of production.
At 40 units, the marginal revenue is equal to;
= Total revenue at 40 units - total revenue at 30 units
= ( 7 * 40) - ( 8 * 30)
= 280 - 240
= $40
At 40 units the marginal cost is;
= total cost at 40 units - total cost at 30 units
= 170 - 130
= $40
MR=MC which is $40.
our parents have made you two offers. The first offer includes annual gifts of $5,000, $6,000, and $8,000 at the end of each of the next three years, respectively. The other offer is the payment of one lump sum amount today. You are trying to decide which offer to accept given the fact that your discount rate is 6.2 percent. What is the minimum amount that you will accept today if you are to select the lump sum offer? D) $17,709.48 C) $16,360.42 B) $16,407.78 E) $17,856.42 A) $16,707.06
Answer:
A) $16,707.06
Explanation:
The computation of the minimum amount is shown below:
Here we find the present value which is shown below:
(in dollars) (in dollars)
Year Cash flows Discount factor Present value
1 5000 0.9416195857 4708.098
2 6000 0.8866474442 5319.885
3 8000 0.834884599 6679.077
Total 16707.059
Effects of fixed and variable cost behavior on the risk and rewards of business opportunities LO 11-2
Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $5,000 per course taught. Denton pays its instructors $250 per student enrolled in the class. Both universities charge executives a $450 tuition fee per course attended.
Required
Prepare income statements for Kenton and Denton, assuming that 20 students attend a course.
Kenton University embarks on a strategy to entice students from Denton University by lowering its tuition to $240 per course. Prepare an income statement for Kenton assuming that the university is successful and enrolls 40 students in its course.
Denton University embarks on a strategy to entice students from Kenton University by lowering its tuition to $240 per course. Prepare an income statement for Denton, assuming that the university is successful and enrolls 40 students in its course.
Prepare income statements for Kenton and Denton Universities, assuming that 10 students attend a course, and assuming that both universities charge executives a $450 tuition fee per course attended.
Answer and Explanation:
The Preparation of income statement of each point is shown below:-
A. Kenton and Denton Universities
Income Statement
Particulars Kenton Denton
Revenue (20 × $450) $9,000 $9,000
Less: Instruction fees
Per course fees $5,000
Per student fee (20 × $250) $5,000
Net income $4,000 $4,000
B. Kenton Universities
Income Statement
Particulars Kenton
Revenue (40 × $240) $9,600
Less: Instruction fees
Per course fees $5,000
Net income $4,600
C. Denton Universities
Income Statement
Particulars Denton
Revenue (40 × $240) $9,600
Less: Instruction fees
Per student fee (40 × $250) $10,000
Net income -$400
D. Kenton and Denton Universities
Income Statement
Particulars Kenton Denton
Revenue (10 × $450) $4,500 $4,500
Less: Instruction fees
Per course fees $5,000
Per student fee (10 × $250) $2,500
Net income -$500 $2,000
We simply deduct all the expenses from the revenue to arrive at net income and a net loss
Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
Sales in Units
April 70,000
May 85,000
June 110,000
July 90,000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 15% of the following month’s sales. The inventory at the end of March was 10,500 units.
Required:
Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.
Answer:
Results are below.
Explanation:
Giving the following information:
Sales in Units
April 70,000
May 85,000
June 110,000
July 90,000
Desired ending inventory= 15% of the following month’s sales.
The inventory at the end of March was 10,500 units.
To calculate the production required for each month, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
April:
Sales= 70,000
Desired ending inventory= 85,000*0.15= 12,750
Beginning inventory= (10,500)
Total production= 72,250
May:
Sales= 85,000
Desired ending inventory= 110,000*0.15= 16,500
Beginning inventory= (12,750)
Total production= 88,750
June:
Sales= 110,000
Desired ending inventory= 90,000*0.15= 13,500
Beginning inventory= (16,500)
Total production= 107,000
Total quarter= 268,000
Suppose you have $ cash today and you can invest it to become worth $ in years. What is the present purchasing power equivalent of this $ when the average inflation rate over the first years is % per year, and over the last years it will be % per year?
Answer: $900,599.04
Explanation:
The present purchasing power equivalent is the present worth of this investment.
The investment will earn 5% for the first 7 years and then 9% for the next 10.
As there are different rates, the present worth calculation will have to reflect that.
At the end of the first 7 years, the present worth of the invested amount given 10 more years of investing at 9%. The Present worth is;
= 3,000,000(Present worth factor, 9%, 10 years)
= 3,000,000 * 0.4224
= $1,267,200
Then what is the Present worth of $1,267,200 in the current year given that it will be invested for 7 years at 5% to get to $1,267,200.
= 1,267,200 (Present worth factor, 5%, 7 years)
= 1,267,200 * 0.7107
= $900,599.04
The Chinese government chooses to control the value of its currency so that it is consistently worth some fixed amount of U.S. dollars. Which of the following terms would relate to what the Chinese government would be doing?
a. floating exchange rate
b. flexible exchange rate
c. exchange rate freedom
d. pegged exchange rate
Answer: pegged exchange rate
Explanation:
A pegged exchange rate also referred to as the fixed exchange rate, sometimes is an exchange rate regime type whereby the value of a currency is fixed by the monetary authority of a particular country against the value of the currency of another country.
This is the type of exchange rate used by the Chinese government in the question above.
Domingo Corporation uses the weighted...
Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,300 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent Complete
Materials costs $7,400 50%
Conversion costs $3,600 20%
A total of 8,700 units were started and 8,000 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $160,600
Conversion costs $122,300
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. How many units are in ending work in process inventory in the first processing department at the end of the month?
a. 700.
b. 1,700.
c. 6.400.
d. 2,700.
Answer:
3,000 units
Explanation:
Calculation for How many units are in ending work in process inventory
Using this formula
Ending work in process units =Beginning work in process units + Units started into production - Transferred to the second processing department units
Let plug in the formula
Ending work in process units= 2,300 units + 8,700 units - 8,000 units
Ending work in process units= 3,000 units
Therefore 3,000 units are in the ending work in process inventory in the first processing department at the end of the month.
Green Inc. made no adjusting entry for accrued and unpaid employee wages of $38,000 on December 31. This error would Multiple Choice Understate assets by $38,000. Overstate net income by $38,000. Understate net income by $38,000. Have no effect on net income.
Answer:
The answer is B. Overstate net income by $38,000.
Explanation:
Accrued expense is an expense that has been enjoyed or incurred but has been paid for. Examples of an accrued expense are unpaid wages/salary, unpaid electricity bill etc.
Usually, the adjusting entry for accrued expense is to debit the expense and debit increases expense while credit decreases it. Since there is no adjusting entry, that means no expense is being recognized on the income statement for this transaction. Hence, the net income increases (overstated). because ordinarily expense reduces net income.
Systemic barriers to change occur because of conflicts between departments, conflicts arising from power relationships, and refusal to share information.
a. True
b. False
Answer:
a. True
Explanation:
This statement is true, as systemic barriers can occur in an organization whose information flow does not occur efficiently and effectively, which causes information noises that prevent departments or teams from receiving organizational information.
This barrier can be eliminated by establishing a more direct and integrated communication with all organizational sectors, in the form of announcements, murals, e-mail, etc.
Another way to solve this problem is by analyzing the design of the organizational structure and making adjustments if it is found that there are flaws that prevent the flow of information to flow normally.
You just won the lottery, which promises you $260,000 per year for the next 20 years, starting today (annuity due). If your discount rate is 7%, what is the present value of your winnings?
Answer:
the present value of your winnings will be $2,947,254.76.
Explanation:
The Present Value, PV of the Annuity due can be calculated as follows :
Pmt = $260,000
P/yr = 1
n = 20
r = 7%
Fv = $0
Pv = ?
Using a financial Calculator, the Present Value, PV of the Annuity due is $2,947,254.76
Petrus Framing's cost formula for its supplies cost is $2,300 per month plus $6 per frame. For the month of March, the company planned for activity of 861 frames, but the actual level of activity was 856 frames. The actual supplies cost for the month was $7,790. The activity variance for supplies cost in March would be closest to:
Answer:
$30 Favorable
Explanation:
Calculation for the activity variance for supplies cost in March
Using this formula
Activity variance = (Actual units - Budgeted units) * Variable cost
Where,
Actual units=856
Budgeted units=861
Variable cost=$6
Let plug in the formula
Activity variance=(856-861) * $6
Activity variance=5*$6
Activity variance=$30 Favorable
Therefore the activity variance for supplies cost in March would be closest to: $30 Favorable
Assume that the CEO of a company gave you the project charter specifying your authority, among others to work on an initiative providing health services to the community in a certain neighborhood. Before the company embarked on the project, the team analyzed the health sector development program of the country and read through laws the country enacted regarding the health sector. It also did a market survey to solicit information as to who does what. From the analysis, it learned that several companies where engaged in the provision of solar energy. As it did not want to be engaged in providing the same service that others were offering, it started developing solar powered mobile clinic. With an initial outlay of birr 5 Million, the project would last for 7 years. Since the whole work was too huge to consider all at once, the project manager and the team decomposed the project into manageable compartments and then to activities. It also developed schedule, set standards, and anticipated possible bottlenecks along the way. From the analysis it made, it found out that there would be a 20% chance that medical supplies would be delivered late costing the company ETB 350,000. There would also be a 40% chance that the company would save ETB 175,000 in time as it would build the component using already existing templates instead of starting from scratch. Finally, the team would like to make sure that the work would satisfy all of the requirements so that it would get the acceptance of the clients. 1. Characterize a project based on the above narration and distinguish the project manager from an operations manager? 2. What is the Expected Monetary Value for the two possibilities? What would you suggest as a solution to respond to risks? 3. Mention and elaborate the input the company used to develop products using templates already existing instead of starting from the scratch. 4. What are the areas of expertise indicated in the story? 5. If you were to produce documents thereby convince stakeholders to buy in the project idea, what would you do for a successful initiation? 6. Discuss the processes, process groups and knowledge areas narrated in the story.
Answer:
Characterize a project based on the above narration and distinguish the project manager from an operations manager?
Explanation:
Once a firm reaches the lowest point on the Long Run Average Total Cost Curve then the firm will automatically charge a lower prices for their product or service. The cost analysis model that we studied in Chapter 9 said that this is always the best strategy to effectively capture the maximum market share.
A- True
B- False
Answer:
B. False
Explanation:
As it is mentioned in the question that When a firm reaches a lowest point on the Long Run Average Total Cost Curve then it automatically charged a less price for the product and services they are rendering to the customer. But this lowest point deals in the only perfect competition also it would not capture the maximum market share but it would result into optimum production and goods supply at minimum price
Wookie Company issues 8%, five-year bonds, on January 1 of this year, with a par value of $108,000 and semiannual interest payments.
Semiannual Period-End Unamortized Premium Carrying Value
(0) January 1, issuance $8,271 $116,271
(1) June 30, first payment 7,444 115,444
(2) December 31, second payment 6,617 114,617
Use the above straight-line bond amortization table and prepare journal entries for the following:
a) The issuance of bonds on January 1.
b) The first interest payment on June 30.
c) The second interest payment on December 31.
Answer:
See the journal entries and explanation below.
Explanation:
The journal entries will look as follows
a) The issuance of bonds on January 1.
Date Accounts title Debit ($) Credit ($)
Jan. 1 Cash 111,671
Premium on Bonds Payable 8,271
Bonds Payable (w.1) 108,000
(To record issuance of bonds.)
b) The first interest payment on June 30.
Date Accounts title Debit ($) Credit ($)
Jun. 30 Interest Expense (w.4) 3,493
Premium on Bonds Payable (w.2) 827
Cash (w.3) 4,320
(To record first interest payment)
c) The second interest payment on December 31.
Date Accounts title Debit ($) Credit ($)
Dec. 31 Interest Expense (w.4) 3,493
Premium on Bonds Payable (w.5) 827
Cash (w.6) 4,320
(To record second interest payment)
Workings:
w.1: Bond payable = Cash - Premium on Bonds Payable = $111,671 - $8,271
w.2: Premium on Bonds Payable = January 1 Unamortized Premium - June 30 Unamortized Premium = $8,271 - $7,444 = $827
w.3: Cash = $108,000 * 8% * (6 / 12) = $4,320
w.4: Interest expense = w.3 - w.2 = $4,320 - $827 = $3.493
w.5: Premium on Bonds Payable = June 30 1 Unamortized Premium - December 31 Unamortized Premium = $7,444 - $6,617 = $827
w.6: Cash = $108,000 * 8% * (6 / 12) = $4,320
w.7: Interest expense = w.6 - w.5 = $4,320 - $827 = $3,493
Based on the following information, calculate the variable overhead rate variance. Actual variable overhead cost $15,500 Actual hours used 4,200 Standard hours allowed 4,000 Standard variable overhead rate $3.75 per hour
Answer:
Rate variance = $250 favorable
Explanation:
The variable overhead rate variance is the difference between the actual variable cost and the standard variable overhead cost the actual actual hours used.
We would compare the actual cost to the standard cost of the actual hours used . This is done below as follows:
$
4,200 hours should have cost (4200 × 3.75 ) 15,750
but did cost 15,500
Rate variance 250 Favorable
Note the actual hours of 4,200 cost $250 less than it should be have cost . Hence the variance is favorable
Rate variance = $250
Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $3,425 in employment-related miscellaneous itemized deductions. They also incur $5,375 of investment interest expense during the year. The Porters' income for the year consists of $178,500 in salary and $4,495 of interest income.
What is the amount of Porters' investment interest expense deduction for the year?
Answer:
$4,995
Explanation:
Calculation of the amount of the Porters' investment interest expense deduction for the year
Based on the information given we were told that Porters' income consists of the amount of
$4,495 of interest income which means that $4,995 will be the investment interest expense deduction for the year. While the amount of $380 ($5,375-$4,995) will be the amount that will be carried forward to the following year.
Therefore Porters' investment interest expense deduction for the year will be $4,995
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $4.3 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $11.8 million to build, and the site requires $700,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Enter your answer as a positive value in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
$17.1 million
Explanation:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project can be calculated as follows
DATA
Fair value of land = 4.6 million
Cost to build a plant = 11.8 million
Grading cost = 0.7 million
Solution
Initial investment = Fair value of land + Cost to build a plant + Grading cost
Initial investment = $4.6 million + $11.8 million + $0.7 million
Initial investment = $17.1 million
A stock has a beta of 1.15 and a reward-to-risk ratio of 6.15 percent. If the risk-free rate is 3 percent, what is the stock's expected return
Answer:
10.07%
Explanation:
According to CAPM
the stock's expected return = risk free rate + (beta x reward-to-risk ratio )
3% + (6.15% x 1.15) = 10.07%
Whispering Corporation began 2017 with a $94,200 balance in the Deferred Tax Liability account. At the end of 2017, the related cumulative temporary difference amounts to $352,400, and it will reverse evenly over the next 2 years. Pretax accounting income for 2017 is $505,400, the tax rate for all years is 40%, and taxable income for 2017 is $388,500.
Part 1
Compute income taxes payable for 2017.
Income taxes payable
$
Part 2
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017. (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 0 for the amounts.)
Account Titles and Explanation
Debit Credit
Part 3
Prepare the income tax expense section of the income statement for 2017 beginning with the line "Income before income taxes.". (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer:
1. Income tax payable = Taxable income for 2017 * Income tax rate
Income tax payable = $388,500 * 40%
Income tax payable = $155,400
2. Journal Entry
Account Titles and Explanations Debit Credit
Income tax expense $202,160
($505,400*40%)
Deferred tax liability $46,760
($202,160-$155,400)
Income tax payable $155,400
($388,500*40%)
3. Income Statement (Partial)
For the Year Ended Dec 31, 2017
Income before income taxes $505,400
Income tax expense
Current $155,400
Deferred $46,760 $202,160
Net Income $303,240
A stock had returns of 15.51 percent, 22.47 percent, −8.68 percent, and 9.43 percent over four of the past five years. The arithmetic average return over the five years was 12.71 percent. What was the stock return for the missing year?
Answer:
24.82%
Explanation:
Arithmetic average = sum of observations / number of observations
Let x = the stock return for year 5
12.71 % = (15.51% + 22.47% −8.68% + 9.43 + x) /5
Multiply both sides by 5
63.55% = (5.51% + 22.47% −8.68% + 9.43 + x)
63.55% = 38.73% + x
x = 63.55% - 38.73% = 24.82%
Bronco Corporation discovered these errors in August of Year 3:
Year Depreciation Overstated Prepaid Expense Omitted
1 $2500 $3000
2 4000 2000
Assume all current items are two months in duration. Net Income for Year 2 was $18,000. Assume all errors are discovered in August of Year #3. The Year #2 books are closed. The net effect on Year #3 Beginning Retained Earnings caused by the August Year #3 correcting journal entries was:
a. $5,500
b. $6,500
c. $6,000
d. $8,500
e. $4,500
Answer:
e. $4,500
Explanation:
Year Depreciation overstated Prepaid expense omitted
1 $2,500 $3,000
2 $4,000 $2,000
Year 2's net income = net income (year 2) + overstated depreciation (year 2) + omitted prepaid expenses (year 1) - omitted prepaid expenses (year 2) = $18,000 + $4,000 + $3,000 - $2,000 = $23,000
This means that year 2's net income was understated by $5,000.
But year 1's net income was overstated by = $2,500 - $3,000 = -$500.
The adjustment on the retained earnings account should be $5,000 - $500 = $4,500
Which of the following represents a difference in the process by which a monopolistic competitor and a monopolist make their respective decisions about quantity and price?a. only the monopolist competitor faces a downward-sloping demand curve.b. the monopolist's perceived demand curve is market demandc. the monopolist competitor's perceived demand curve is market demandd. a monopolist need not fear entry and also selection b above
Answer:
a monopolist need not fear entry and also selection b above
Explanation:
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
examples of monopolistic competition are restaurants
A monopoly is when there is only one firm operating in an industry. there is usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is an utility company
Use the following information and the indirect method to calculate the net cash provided or used by operating activities:
Net income $ 86,800
Depreciation expense 13,500
Gain on sale of land 6,800
Increase in merchandise inventory 3,550
Increase in accounts payable 7,650
A) $97,600.
B) $15,850.
C) $31,400.
D) $16,850.
E) $38,200
Answer:
A) $97,600
Explanation:
Calculation for the net cash provided or used by operating activities
OPERATING ACTIVITIES
Net Income $86,800
Depreciation Expense 13,500
Gain on Sale of Land (6,800)
Increase in Merchnadize Inventory (3,550)
Increase in Accounts Payable 7,650
Net Cash provided by Operations $97,600
Therefore the net cash provided or used by operating activities will be $97,600
A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $38,000 for A and $31,000 for B; variable costs per unit would be $7 for A and $11 for B; and revenue per unit would be $19.
a. Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.)
QBEP,A units
QBEP,B units
b. At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)
c. If expected annual demand is 10,000 units, which alternative would yield the higher profit?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine A:
Fixed costs= $38,000
Unitary cost= $7
Machine B:
Fixed costs= $31,000
Unitary cost= $11
Revenue per unit= $19
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Machine A:
Break-even point in units= 38,000 / (19 - 7)
Break-even point in units= 3,167
Machine B:
Break-even point in units= 31,000 / (19 - 11)
Break-even point in units= 3,875
Now, we need to determine the indifference point:
Machine A= 38,000 + 7x
Machine B= 31,000 + 11x
x= number of units
We will equal both formulas and isolate x:
38,000 + 7x = 31,000 + 11x
7,000 = 4x
1,750=x
Indifference point= 1,750 units
Finally, the total cost for 10,000 units:
Machine A= 38,000 + 7*10,000= $108,000
Machine B= 31,000 + 11*10,000= $141,000
MV Corporation has debt with market value of million, common equity with a book value of million, and preferred stock worth million outstanding. Its common equity trades at per share, and the firm has million shares outstanding. What weights should MV Corporation use in its WACC?
Answer:
The Weighted Average cost of capital measures the cost to the company of its current capital structure by using the weights of the various capital measures. WACC usually uses market values so;
Total amount = Debt + Preferred stock + common equity
= 100 million + 20 million + ( 50 * 6 million)
= $420 million
Proportions.
Debt
= 100/420
= 24%
Preferred Stock
= 20/420
= 5%
Common Equity
= 300/420
= 71%
