Answer:
Related diversification strategy.
Explanation:
Related diversification is a business strategy in which a business enter a new industry which has some similarities with a company's existing business industry. The highest economic benefit will be achieved by a business if it enters into related diversification strategy.
On Dec. 15, 2020, Julie’s Tax Prep, a cash-method taxpayer, prepaid $5,000 worth of deductible interest on a business loan. The interest won’t accrue until January 2021. Julie’s Tax Prep will be displaying for the first time at a trade show in July 2021. On Dec. 16, 2020, Julie’s prepaid the $7,000 trade show booth rental expense. The payment isn’t due until May 2021, and use of the booth will occur in July 2021. In addition, on Dec. 28, 2020, Ed’s Equipment repaired some equipment in Julie’s office and billed Julie’s $2,000. Julie’s received the invoice on Dec. 28, 2020 and paid the $2,000 invoice on Jan. 29, 2021. How much of the $14,000 in deductible business expenses may Julie’s Tax Prep deduct in 2020?
Answer:
Julie’s Tax Prep
Of the $14,000 in deductible business expenses, Julie’s Tax Prep may deduct in 2020 is:
= $12,000.
Explanation:
a) Data and Calculations:
Expenses paid in 2020:
Deductible interest on a business loan = $5,000
Trade show booth rental expense = $7,000
Total deductible = $12,000
The payment for the repair of office equipment will not a deductible expense for 2020 since Julie Tax Prep is a cash-method taxpayer.
A firm is considering an investment in a new advertising project. The project will produce a cash flow of $1,000 in one year and it will produce a cash flow of $15,000 two years from now. The firm has a required return of 11%. You are the manager of the advertising department and you estimate that the cost of this project is $13,000 today. Do you recommend that the firm accept this project
Answer:
The fact the investment opportunity has a positive cash flow means that the project should be accepted since it is value-adding
Explanation:
We can evaluate the acceptability of the project using the net present value approach. The net present value is the present value of future cash flows discounted at the 11% required rate of return.
Present value=future cash flow/(1+required rate of return)^n
n is the year in which the cash flows are expected, it is 1 for year 1 cash flow and 2 for year 2 cash flow
NPV=$1,000/(1+11%)^1+$15,000/(1+11%)^2-$13,000
NPV=$75.24
. A rise in the price of corn will cause a (Click to select) in the Supply Curve for corn. b. A decrease in the price of seed (an input to corn) will cause a (Click to select) in the Supply Curve for corn. c. A decrease in the local number of grocery stores will cause a (Click to select) in the Supply Curve for corn.
Answer:
move along upwards
shift out
shift in
Explanation:
A change in price of a good leads to a movement along the supply curve and not a shift of the supply curve.
Other factors other than a change in the price of the good would lead to a shift of the supply curve. Such factors include :
A change in the price of input A change in the number of suppliers Government regulationsWhen the price of corn increases, the quantity supplied of corn increases. this is in line with the law of supply.
according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.
This would lead to a movement up along the supply curve
If the price of seed which is an input to corn decreases, it becomes cheaper to produce corn. As a result, the supply of corn would increase. this would lead to an outward shift of the supply curve.
If the number of grocery stores decreases, there would be a reduction in supply. As a result, the supply curve would shift inwards
3. The meaning of saving and investment Classify each of the following based on the macroeconomic definitions of saving and investment. Saving Investment Yvette borrows money to build a new lab for her engineering firm. Sean purchases a corporate bond issued by a car company. Cho purchases stock in NanoSpeck, a biotech firm. Bob purchases a new condominium in Chicago.
Answer and Explanation:
The classification is as follows:
1. As the money is to be borrowed to built a new lab, so it is an Investment.
2. As the corporate bond is issued by a car so it should be the savings
3. The stock is purchased so it should be the saving
4. The purchase of the new condominium should be considered as an investment
In this way it should be classified
What are the consequences of bank failures?
Answer:
When a bank fails, it may try to borrow money from other solvent banks in order to pay its depositors. If the failing bank cannot pay its depositors, a bank panic might ensue in which depositors run on the bank in an attempt to get their money back.
Explanation:
What is the value of a preferred stock that pays a perpetual dividend of $125 at the end of each year when the interest rate is 5 percent?
Answer: $2500
Explanation:
The value of a preferred stock that pays a perpetual dividend of $125 at the end of each year when the interest rate is 5 percent will be calculated by using the formula:
= Cf/i
where,
Cf = Cash flow = $125
i = Interest rate = 5% = 0.05
Therefore, the value of the preferred stock will be:
= Cf/i
= $125/0.05
= $2500
The value of the preferred stock is $2500.
EXCEL The FAMA Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1000 face value at maturity. Bond L has a maturity of 15 years, and Bond S has a maturity of 1-year. What will be the value of each of these bonds when the going rate of interest (yield to maturity) is:
A) 8%
B) 12%
Why does the longer-term (15-year) bond fluctuate more when interest rates change than does the shorter-term bond (1-year)?
Answer:
A)
8%
Bond L = $1,171.19
Bond S = $1,018.52
12%
Bond L = $863.78
Bond S = $982.14
Explanation:
Price can be calculate by using PV function in excel as follow
=PV(rate, nper, pmt, [fv])
Where
Rate = yield to maturity
nper = numbers of years to maturity
pmt = coupon payment
fv = maturity value
The prices are calculated using the PV function and working is attached with this answer
A Formula sheet is also attached for your reference.
Jiffy Park Corp. has annual sales of $50,736,000, an average inventory level of S15,010,000, and average accounts receivable of $10,010,000. The firm's cost of goods sold is 85% of sales. The company makes all purchases on credit and has always paid on the 30th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,950,000 and accounts receivable by $1,950,000. 7 points)
a. What is Jiffy Park's cash conversion cycle (CCC) prior to the changes proposed'?
b. What is Jiffy Park's CCC after implementing the suggested changes?
c. What is the net change in Jiffy Park's CCC given what you just calculated above?
d. Why is this significant?
Answer:
Jiffy Park Corp.
Cash Conversion Cycle:
a. Prior to proposed changes:
CCC = 169 days
b. After implementing changes:
CCC = 129 days
c. The change in CCC is 40 days
d. It is significant. It is about 24% reduction in the CCC. It is equal to the days that payable are outstanding under the proposed plan.
Explanation:
a) Data and Calculations:
Current annual sales = $50,736,000
Average inventory level = $15,010,000
Average accounts receivable = $10,010,000
Cost of goods sold = 85% of sale s= $43,125,600
Normal Days Payable Outstanding = 30 days
New Plan:
Planned Days Payable Outstanding = 40 days
Annual sales = $50,736,000
Average inventory level = $13,060,000 ($15,010,000 - $1,950,000)
Average accounts receivable = $8,060,000 ($10,010,000 - $1,950,000)
Cash Conversion Cycle:
a. Prior to proposed changes:
Days Inventory Outstanding = $15,010,000/$43,125,600 * 365 = 127 days
Days Receivable OUtstanding = $10,010,000/$50,736,000 * 365 = 72 days
Days Payable Outstanding = 30 days
CCC = 169 (127 + 72 - 30) days
b. After implementing changes:
Days Inventory Outstanding = $13,060,000/$43,125,600 * 365 = 111 days
Days Receivable OUtstanding = $8,060,000/$50,736,000 * 365 = 58 days
Days Payable Outstanding = 30 days
CCC = 129 (111 + 58 - 40) days
c. The change in CCC is 40 days (169 - 129)
d. It is significant. It is about 24% reduction in the CCC. It is equal to the days that payable are outstanding under the proposed plan.
Answer the following questions using the information below: Cannady produces six products. Under their traditional cost system using one cost driver, SR6 costs $168.00 per unit. An analysis of the activities and their costs revealed that three cost drivers would be used under the new ABC system. The new cost of SR6 was determined to be $178.00 per unit. Given this change in the cost ________.
Answer:
Given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
Explanation:
A cost driver can be described as the unit of an activity or any factor that makes the cost of an activity to fluctuate. An estimated cost driver is adequate and of the expected quality when quality or quantity is satisfactory or acceptable.
Therefore, given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
The price of Benzethonium, an active ingredient in hand soap, decreases. How does this decrease in input cost affect the supply of hand soap
Answer:
d. It shifts the supply curve to the left.
Explanation:
When there is any change in the price of the good or service keeping other things constant so it would lead in the movement along with the supply curve. If there is any change in the input cost so it affect the production cost that would shift the supply and on the other hand when the cost is reduced so the shift should be in outward direction and vice versa
innetonka Company leases an asset. Information regarding the lease: • Fair value of the asset: $400,000. • Useful life of the asset: 6 years with no salvage value. • Lease term is 5 years. • Annual lease payments are $60,000 • Implicit interest rate: 11%.
Answer:
This is a finance lease.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Minnetonka Company leases an asset. Information regarding the lease:
Fair value of the asset: $400,000.
Useful life of the asset: 6 years with no salvage value.
Lease term is 5 years.
Annual lease payments are $60,000
Implicit interest rate: 11%.
Minnetonka can purchase the asset at the end of the lease period for $50,000.
What type of lease is this?
The explanation of the answer is now provided as follows:
Finance lease can be described a lease in which the finance company legally owns the asset throughout the lease term, but the lessor transfers all risk and reward connected with the asset to the lessee, and the lessee also acquires the ownership of the asset at the end of the lease term.
Since Minnetonka can purchase the asset at the end of the lease period for $50,000, this implies that Minnetonka can acquires the ownership of the asset at the end of the lease term. This therefore implies that this is a finance lease.
The Boat Company has a capital structure of 30 percent riskless debt and 70 percent equity. The assumed tax rate is 23 percent. If the asset beta is .9, what is the equity beta?
Answer: 0.68
Explanation:
Using the measures given, the equity beta can be calculated as:
Equity beta = Asset beta * (1 + (1 - Tax rate) * (Debt/Equity)
= 0.9 * ( 1 + ( 1 - 23%) * (30% / 70%)
= 1.593 * 0.3/0.7
= 0.68
Which of the following instruments are traded in the capital markets? Check all that apply. Treasury bills Certificates of deposit Common stocks Commercial paper Preferred stocks
Answer:
Common stocks
Preferred stocks
Explanation:
The Capital Market is a place where bonds and stocks are traded however it is only for stocks and bonds with a maturity that lasts over a year. Corporate bonds and government bonds fall under this category as a result.
Stocks represent ownership in a company so this is a long term ownership thing which is why it is traded in the capital market. This includes both common and preferred stock.
C Co. reported a retained earnings balance of $230,000 at December 31, 2020. In September 2021, C determined that insurance premiums of $81,000 for the three-year period beginning January 1, 2020, had been paid and fully expensed in 2020. C has a 25% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2021 statement of retained earnings
Answer:
$267,800
Explanation:
Calculation to determine What amount should C report as adjusted beginning retained earnings in its 2021 statement of retained earnings
First step is to Allocate the premium equally starting from 2020,2021 to 2022
Premium=$81,000/3 years
Premium=$27,000
Second step is to calculate the effect of the error
Effect of error=$81,000-$27,000
Effect of error=$54,000
Third step is to calculate the tax effect
Tax effect =$54,000*30%
Tax effect=$16,200
Fourth step is to calculate the 2021 beginning retained earnings
2021 Beginning retained earnings=$54,000-$16,200
2021 Beginning retained earnings=$37,800 Understated
Now let determine the Corrected retained earnings
Using this formula
Corrected retained earnings =Beginning balance + Understated Beginning retained earnings
Let plug in the formula
Corrected retained earnings= $230,000 + $37,800
Corrected retained earnings= $267,800
Therefore the amount that C should report as adjusted beginning retained earnings in its 2021 statement of retained earnings will be $267,800
On January 2, Dog Mart prepaid $19,920 rent for the year and recorded the prepayment in an asset account. Prepare the January 31 adjusting entry for rent expense. If an amount box does not require an entry, leave it blank. Jan. 31 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6
Answer:
Debit : Rent Expense $1,660
Credit : Prepaid Rent $1,660
Explanation:
The January 31 adjusting entry for rent expense would include a Debit to Rent Expense and Credit to Prepaid Rent - Asset Account at an amount of $1,660.
Calculation :
Rent Expense = 1/12 x $19,920 = $1,660
Suppose autos cost consumers $30,000 and trucks cost consumers $15,000. What contribution does the production of 200 autos and 200 trucks make to the GDP
Answer:
the contribution made to the production of 200 autos and 200 trucks is $9,000,000
Explanation:
The computation of the contribution made to the production of 200 autos and 200 trucks is shown below
Contribution to GDP is
= $30,000 × 200 + $15,000 × 200
= $6,000,000 + $3,000,000
= $9,000,000
Hence, the contribution made to the production of 200 autos and 200 trucks is $9,000,000
For each of the following transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on September 30, the end of the fiscal year. (Credit account titles are automatically indented when the 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.)
(a) On September 1, paid rent on the track facility for three months, $213,000.
(b) On September 1, sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totaled $840,000.
(c) On September 1, borrowed $300,000 from First National Bank by issuing a 6% note payable due in three months.
(d) On September 5, programs for 20 racing days in September, 25 racing days in October, and 25 racing days in November were printed for $3,500.
(e) The accountant for the concessions company reported that gross receipts for September were $160,000. Eight percent is due to the track and will be remitted by October 10.
Answer and Explanation:
the journal entries are as follows:
a Prepaid rent $213,000
To cash $213,000
(To record prepaid rent)
Adjusting entry:
Rent expense $71,000 ($213,000 ÷ 3)
Prepaid rent $71,000
(To record September rent expense)
b Cash $840,000
To unearned sales revenue $840,000
(To record cash received on season sales)
Adjusting entry:
Unearned sales revenue ($840,000 ÷ 12) $70,000
Sales revenue $70,000
(To record sales revenue recognised)
c Cash $300,000
Note payable $300,000
(To record note payable issued on borrowed amount )
Adjusting entry:
Interest expense ($300,000 × 6% ÷ 12) $1,500
Interest payable $1,500
(To record interest payable due)
d Prepaid advertising 3,500
To Cash 3,500
(To record cash paid for advertising)
Adjusting entry:
Advertising expense ($3,500 ÷ 60) × 20 $1,167
To prepaid advertising $1,167
e No entry
Adjusting entry:
Accounte receivable ($160,000 × 8%) $12,800
Sales revenue $12,800
(To record amout due)
What personal traits are important for finance and business careers?
Answer:
You must be positive
Emotional intelligence
A growth mindset
Adaptability and resiliency
Answer:
if you want to take up a business for your future career these are your personal traits you must have when you are creating a business;
Be positiveWork FastBe KindBe OrganizedKeep your Business Surroundings Clean and tidyGet rid of Pests and insects in your Business Area and SurroundingHand everything with CareAlways Help your CustomerA(n) ________ is a hybrid between a conventional loan and a bond; at its heart it is a bond, but its terms are tailored to the borrower's individual needs, as a loan would be.
Answer:
Private placement
Explanation:
Private placement can be defined as non public offering also. This is because they are not sold through public offering but are sold through Private sales and the the number of investors are few and selected
These investors who receive the bonds are usually selected beforehand instead of doing it in the open market
The position in a craft union in which the holder is the chief administrator of the union hiring hall is the
Answer:
e. international union representative
Explanation:
Union representatives played a vital role with respect to supporting the employees for reporting to the union leaders when they are on the place of their peers. It acted as the main liason between the employers & employees as in this they support the employees and guidem them via the challenges that took place during the work
So at the time when the craft union position where the holder be the chief administrator of the union hiring hall so it should be the international union representative
Number of Output Marginal Product Office Rent Labor Cost TotalCost
Workers boxes of Labor (dollars) (dollars)
0 0 --
1 220 400 200
2 250 800
3 680
4 160 1,200
5 940 1,000
6 980 1,600
Suzette's Fancy Packaging subcontracts with Sunshineland Pecans to box dried fruit and nuts for Suzette's mail order business. Suzette rents space for her factory for $400 a week in a nearby strip mall. She can hire temporary workers for $200 a week. Table 11-5 above shows her output and cost data. Use the table to answer questions a-e.
a. Complete the table.
b. In the last week of summer Suzette closes her business to go on a family vacation. What are her costs during that week?
c. In one week Suzette exactly breaks even. If her revenue for the week is $1,200, how many boxes of fruit and nuts did she produce?
d. Judging from the marginal product of labor data, would you say that Suzette had to settle for increasingly unproductive workers? Explain your answer.
e. Suzette has received an order for 1,500 boxes of nuts per week for the next 3 months. If she expects the trend in the marginal product of labor will continue in the same direction, what do you think she should do? Should she not commit until she can move to a larger space or should she just hire more workers? Explain your answer.
Answer:
a.
Number of Output Marginal Product Office Rent Labor Cost Total Cost
Workers boxes of Labor (dollars) (dollars) (dollars)
0 0 - -
1 220 220 400 200 600
2 470 250 400 400 800
3 680 210 400 600 1,000
4 840 160 400 800 1,200
5 940 100 400 1,000 1,400
6 980 40 400 1,200 1,600
b. The costs during the week of summer vacation are: $400
c. She produced 840 boxes.
d. Yes. Suzette settled for increasingly unproductive workers as the marginal product of labor continued to decline. The cost of paying the workers remained at a flat rate of $200 per week without the corresponding output to show for the labor cost.
e. Suzette will need to hire more workers. However, their average productivity needs to be improved greatly to limit the total labor costs.
Explanation:
a) Data and Calculations:
Number of Output Marginal Product Office Rent Labor Cost Total Cost
Workers boxes of Labor (dollars) (dollars) (dollars)
0 0 - -
1 220 220 400 200 600
2 470 250 400 400 800
3 680 210 400 600 1,000
4 840 160 400 800 1,200
5 940 100 400 1,000 1,400
6 980 40 400 1,200 1,600
Some members of Congress have proposed a law that would make price stability the sole goal of monetary policy. Suppose such a law were passed. (a) How would the Fed respond to an event that expanded aggregate demand
Answer:
If aggregate demand expands, unless aggregate supply expands in an equal proportion, then the price level will increase. In order to keep prices stable, the FED would need to increase interest rates or decrease the money supply in order to offset the expansion of the aggregate demand. This way, aggregate demand should return to its original level.
Explanation:
Using the information below, calculate net income for the period:
Sales revenues for the period $1,323,000
Operating expenses for the period 258,000
Finished Goods Inventory, January 1 55,000
Finished Goods Inventory, December 31 60,000
Cost of goods manufactured
for the period 559,000
A. $774,000.B. $769,000.C. $530,000.D. $535,000.E. $448,000.
Answer:
See explanation
Explanation:
The correct choice is not available : Net Income is $511,000
We determined this as follows :
Income Statement for the ended December 31
Sales $1,323,000
Less Cost of Sales
Opening Finished Goods Inventory $55,000
Add Cost of goods manufactured $559,000
Less Ending Finished Goods Inventory ($60,000) ($554,000)
Gross Profit $769,000
Less Expenses
Operating expenses ($258,000)
Net Income $511,000
đường tổng cung dài hạn là đường có độ đố dương hay âm
Answer:
dương
Explanation:
ou are attempting to value a call option with an exercise price of $109 and one year to expiration. The underlying stock pays no dividends, its current price is $109, and you believe it has a 50% chance of increasing to $142 and a 50% chance of decreasing to $76. The risk-free rate of interest is 12%. Calculate the call option's value using the two-state stock price model
Answer:
$14.73
Explanation:
Given that, there is a 50 - 50 chance that a call option will either increase or decrease ;
Exercise price = $109
Increase price = $142
Decrease price = $76
Using the two state stock price model :
Increase price - exercise price ; 142 - 109 = $33
Decrease price - exercise price ; 76 - 109 - $33
We calculate the mean, expected value of winning after one year,
E(X) = Σx*p(x)
Since call won't be exercised if price decrease, then - 33 = 0
x : ___ 33 _____ 0
p(x) : _ 0.5 ____ 0.5
E(X) = (33*0.5) + (0*0.5)
E(X) = 16.5
The present value, PV = Expected winning / (1 + r)
PV = 16.5 / (1 + 0.12) = 16.5 / 1.12 = 14.73
Leo is the most active participant on his company's social networking platform, but his manager has an issue with one aspect of his posts. Which behavior is Leo's manager most likely to ask him to change
Group of answer choices.
A. He never addresses colleagues by name to keep things professional.
B. He always uses a friendly, but direct tone.
C. He often requests that colleagues post work-related data.
D. He spends time on the platform each day.
E. He often reminds colleagues to share their ideas through the platform
Answer:
A. He never addresses colleagues by name to keep things professional.
Explanation:
Operant conditioning can be defined as an associative learning process which involves reinforcing the strength of a behavior.
Behavior modification is a therapeutic process that is focused on changing any undesirable negative behavior in an individual through the use of positive or negative consequence and biofeedback.
Basically, behavior modification is based on operant conditioning principles, through negative or positive reinforcement, undesirable behaviors developed by an individual are mainly replaced with more desirable ones.
In this scenario, a behavior which Leo's manager is most likely to ask him to change is not addressing colleagues by name to keep things professional.
In a corporate or formal setting such as on a company's social network platform, it is very important that group members (employees) address their colleagues by name at all times. This behavior or action, is necessary to keep things professional and show individual interests in your colleagues.
this is essay .......
Explanation:
that's an essay???! holy
You have $34,977.24 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $240,000. You expect to earn 14% annually on the account. How many years will it take to reach your goal
Answer:
13.82 years
Explanation:
The computation of the number of years taken for reaching the goal is as follows:
Given that
PV is $34,977.24
PMT is $4,000
FV is $240,000
RATE is 14%
The formula is shown below:
=NPER(RATE,PMT,PV,-FV,TYPE)
AFter applying the above formula, the number of years is 13.82 years
A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $200 per unit. What is the break-even point for this operation
Answer and Explanation:
The computation of the break-even point for this operation is given below:
As we know that
Break even point is
= (Fixed cost) ÷ (Selling price per unit - variable cost per unit)
= ($9,000) ÷ ($200 - $50)
= $9,000 ÷ $150
= 60 units
The break even price is
= Fixed cost ÷ expected cost + variable cost per unit
= $9,000 ÷ $200 + $50
= $45 + $50
= $95
Interest rate in US (Rh): 3.5%
Interest rate in Euro zone (Rh): 7.5%
Line of credit in US: USD 10,000,000
Line of credit in in Euro zone: EUR 8,000,000
The spot rate of EUR, now (SR0): $1.25
Suppose your forecast tells you that the spot rate of EUR one year later (SR1) will be $1.20. What is your uncovered rate of return from US (Ruh) and Euro zone (Ruf)?
Answer:
(US): 3.20%
EURo zone :7.81%
Explanation:
As per Uncovered Interest rate parity theory,
Expected Spot Rate / Spot Rate = (1 + time adjusted interest rate of $) / (1 + time adjusted interest rate of Euro)
To find Uncovered rate of return from US (Ruh), we put expected spot rate, spot rate and time adjusted interest rate of Euro in above equation :
$ 1.20 / 1.25 = (1 + 1* interest rate of $) / (1 + 1*0.075)
Hence, Interest Rate of $ = 3.2%
Hence, Uncovered rate of return from US (Ruh) is 3.20%.
Similarly, to find Uncovered rate of return from Euro zone (Ruf), we put expected spot rate, spot rate and time adjusted interest rate of US in above equation :
$ 1.20 / 1.25 = (1 + 1*0.035) / (1 + 1* interest rate of euro)
Hence, interest rate of Euro = 7.81%.
Hence, Uncovered rate of return from Euro zone (Ruf) is 7.81%.
