suppose an unanticipated decrease in foreign spending on domestically produced goods causes the aggregate demand curve to shift to the left (from AD1 to AD2 ). According to adherents of the adaptive-expectations theory, the unanticipated change in aggregate demand will cause the economy to move in which direction

Answers

Answer 1

Answer:

Under the adaptive expectations theory, individuals and businesses base their future economic expectations using past events and experiences as their starting point. E.g. if the economy has been constantly growing steadily for the past 4 years, people and businesses will expect that it continues to grow in a similar way in the near future.

In this case, since the aggregate demand decreased (leftward shift) but this was the result of an unanticipated decrease in exports, economists, individuals and businesses will believe that the economy will not be affected and shall soon return to its normal path. The problem is that the economy actually starts to shrink, and since no adjustments are made on time, the problem will not improve, instead it will get worse. Eventually, once the people and businesses realize the negative effect on the economy, they will react abruptly.

This happened during the Great Recession when everyone thought that the prices of homes would increase forever, but once people realized their mistake, panic spread and the economy collapsed. This is not the same situation, but the negative effects will be eventually felt.


Related Questions

Marc and michelle are married and earned salaries this year of $69,200 and $13,950, respectively. in addition to their salaries, they received interest of $350 from municipal bonds and $1,150 from corporate bonds. marc and michelle also paid $3,150 of qualifying moving expenses, and marc paid alimony to a prior spouse in the amount of $2,150. marc and michelle have a 10-year-old son, matthew, who lived with them throughout the entire year. thus, marc and michelle are allowed to claim a $1,000 child tax credit for matthew. marc and michelle paid $7,300 of expenditures that qualify as itemized deductions and they had a total of $6,330 in federal income taxes withheld from their paychecks during the course of the year. (use the tax rate schedules. )

Answers

Part of question :

What is the total amount of Marc and Michelle's deductions from AGI?

Answer and Explanation:

Let's assume Marc and Michelle are filing a joint tax return.

Total salaries from Marc and Michelle = $69200+$13950 = $ 83150

interest on corporate bonds which is taxable = $1150

total income = $ 83150+$1150= $84300

deductions include:

The IRA contribution =$ 3150

The alimony to ex wife= $ 2150

Total deduction = $ 5300

Agreegate income= $ 84300-$5300=$79000

Marc and Michelle have options to choose standard deduction of $24000 from AGI or itemised deduction of 2% of AGI=$1580

From here, it is better to take the standard deduction option as it reduces taxable income

Therefore taxable income =$79000-$24000=$55000

Total deduction=$24000

Option A requires eight years of higher education and $80,000, while option B
requires four years of higher education and $45,000. Option B requires
time and
money

Answers

Answer:

A less,less

Explanation:

because option A requires 8 year of higher education and $80,000. but option B only requires four years of higher education and $40,000

Option A requires eight years of higher education and $80,000, while option B requires four years of higher education and $45,000. Option B requires less time and less money because option A requires 8 years of higher education and $80,000 but option B only requires four years of higher education and $40,000. Thus, option 'A' is the correct option.

What do cost and time effective mean?

Business managers must deal with two fundamental issues: time and expenses. These two topics have a lot in common. For instance, you can incur a fee and an increase in costs if you miss a deadline. Similarly to this, if money is tight you could feel pressured to finish a project sooner in order to cut down on labour costs. Thus, managing time and expenditures concurrently provide several advantages for your company.

When practising time and cost management, it is frequently impossible to complete all of the original recommendations. You eventually learn to set priorities and choose which initiatives are worthy of your time, money, and attention. You must discover strategies to improve your efficiency if you want to accomplish more with the money and time you have available.

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Thorley Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. Year 0 1 2 3 4 5 Cash flows -$1,100 $325 $325 $325 $325 $325

Answers

Answer:

IRR =  14.59%

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated using a financial calculator

Cash flow in year 0 = -$1,100

Cash flow in year 1 = $325

Cash flow in year 2 = $325

Cash flow in year 3 = $325

Cash flow in year 4 = $325

Cash flow in year 5 = $325

IRR =  14.59%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

A broker arrives to present a purchase offer to a disabled woman and finds her son and his wife also present. In the presence of the broker, both individuals persistently urge the woman to accept the offer, even though it is much lower than the price she has been asking for her home. If the woman accepts the offer, she may later claim that

Answers

Answer:

she was under undue influence from her son and daughter in law and therefore the contract is voidable

Explanation:

Since in the question it is mentioned that the broker made a purchase offer to a disabled woman also his wife and her son are present. The price is very much lower and in the case when the women accept the offer and later she said due to pressure she accepted the offer.

As she is a disabled person and the people who are disabled, blind, are not capable to enter into a contract

Therefore the contract is voidable

At January 1, 2016, Bonita Industries has beginning inventory of 1500 surfboards. Bonita estimates it will sell 6000 units during the first quarter of 2016 with a 12% increase in sales each quarter. Bonita’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2016

Answers

Answer: $1,128,960

Explanation:

The budgeted sales revenue is the financial estimate of the amount that a company is expecting to make for a particular period of time.

Based on the information given in the question, the budgeted sales revenue for the third quarter of 2016 will be:

= 6000 × (1 + 12%) × (1 + 12%) × $150

= 6000 × (1 + 0.12) × (1 + 0.12) × $150

= 6000 × 1.12 × 1.12 × $150

= $1,128,960

Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Businesses make investment plans many months in advance. The current tax system acts as an automatic stabilizer. Changes in government purchases and taxation must be passed by both houses of Congress and signed b

Answers

Answer: Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates.

Explanation:

The Active Stabilization policy calls for the Government to actively try to reduce fluctuations in an economy by using monetary and fiscal policy tools.

Arguments for this policy believe that fluctuations in the economy are caused by excessive optimism and pessimism amongst market participants. In cases therefore where there is excessive pessimism, the Government should expand money supply and lower interest rates to spur investment and remove the pessimistic mood of the market.

When it is time for Margaret to provide performance appraisals, she organizes her subordinates in a list from best employee to worst employee. Which method does Margaret most likely use

Answers

Answer:

Ranking method

Explanation:

Ranking method for performance appraisal is the oldest, and it involves the use of rankings in evaluating the performance of employees. Employees are usually organized depending on their worth; they are ranked in different categories from the highest performance to the lowest performance or from the best employee to the worst employee. This type of method compares between employees.

John manufactures household furniture. His start-up costs, including tools, plans, and advertising, total \$5000$5000dollar sign, 5000. Labor and materials for each piece of furniture total \$350$350dollar sign, 350, and his production costs are the sum of his start-up costs plus the cost of labor and materials. If John makes fff pieces of furniture, what will be his production costs, ccc, in dollars

Answers

Answer:

$5,000 + $350f

Explanation:

The computation of the production cost in dollars is shown

Here we use the equation form

The start up cost is $5,000

Labor, material cost $350

Now if he makes f pieces of furniture so, his production cost would be

= Startup cost + labor, material cost

= $5,000 + $350f

Hence, this is the answer and the same is to be provided

A 50-year old customer is in a very low tax bracket. She lives in a state that has one of the highest income tax rates. The customer is seeking income and preservation of capital. She has a 10 year investment time horizon. The best r
ecommendation would be a 10 year maturity:__________

a. Treasury Bond
b. investment grade corporate bond
c. investment grade municipal bond
d. Treasury STRIPS

Answers

Answer:

b. investment grade corporate bond

Explanation:

Credit rating is used to show the reliability of a security. The Investment Grade is a credit rating the is low risk bond. There is low possiblity of default on this type of investment.

Medium rating of A and BBB represent the investment grade corporate bond.

This is an attractive investment for the more conservative investor.

This is an ideal investment choice for the 50-year old customer with very low tax bracket, in a state with high income tax rates. So she is seeking income and preservation of capital.

The best recommendation for the 5o-year-old customer would be 10- year maturity that is known as an investment-grade corporate bond.

Bonds rated "investment-grade" are considered to just have positive significant credit ratings and a low risk of default. Top companies may benefit from their status as investment-grade credits, resulting in lower interest rates.

A corporate or municipal bond with an investment-grade rating has a relatively low risk of default. Companies with a "AAA" rating are considered the least likely to default, according to Standard and Poors.

Businesses that Moody deems to be the least probable to happen start receiving an "Aaa" rank.

To know more about the various securities with maturity periods, refer to the link below:

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Paris Corporation has 17,000 shares of $60 par common stock outstanding. On August 2, Paris Corporation declared a 3% stock dividend to be issued October 8 to stockholders of record on September 15. The market price of the stock was $82 per share on August 2.
Journalize the entries required on August 2, September 15, and October 8. If an amount box does not require an entry, leave it blank. If no entry is required, select "No entry required" and leave the amount boxes blank.
Aug. 2 Stock Dividends
Stock Dividends Distributable
Paid-In Capital in Excess of Par-Common Stock
Sept. 15 No entry required
No entry required
Oct. 8 Stock Dividends Distributable
Common Stock

Answers

Answer:

Date               General Journal                      Debit           Credit

Aug 2.           Stock Dividend                        $41,820

                     (17,000 * 3% * $82)

                      Stock Dividend Distributable                    $30,600

                      (17,000 * 3% * $60)

                      Paid-in-Capital in Excess of Par-                $11,220

                      Common stock

Sept. 15         No Entry required

Oct. 8            Stock Dividend Distributable     $30,600

                     Common Stock                                             $30,600

accountant for Huckleberry... The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $ 160,000 Cash dividends declared for the year 49,600 Net income for the year 96,500 What is the ending balance for retained earnings

Answers

Answer:

$206,900

Explanation:

According to the given situation, the computation of ending balance for retained earnings is shown below:-

Ending retained earnings = Beginning retained earnings + Net income - Cash dividends

= $160,000 + $96,500 - $49,600)

= $206,900

Therefore for computing the ending retained earnings we simply applied the above formula.

Rodrigo wanted to buy his wife a pearl necklace for her birthday. Murphy's Jewelry had a necklace he liked for $139, but he bought the same necklace at Pearls for Her. This pearl necklace was originally $173.75, but was on sale for 20% off, which reduced the price to $139. He was very pleased with his bargain. Rodrigo is subject to:

Answers

Answer:

a framing bias.

Explanation:

given data

necklace he liked = $139

pearl necklace originally = $173.75

sale for = 20% off

reduced the price = $139

solution

Rodrigo is subject to readymade bias. This bias refers to how people’s decisions affect situations, words, or settings. Although both stores have the same price, Pearl’s own stores create a relative factor It showed a high base price and a 20% discount, which made Rodrigo feel like he was making a deal, so he was more inclined to buy the necklace and not at the Murphy jewelry store.

Quality data gathering, analysis, and reporting $59,000 Testing and inspection of incoming materials $48,000 Final product testing and inspection $27,000 Depreciation of test equipment $30,000 Cost of field servicing and handling complaints $52,000 Disposal of defective products $13,000 Downtime caused by quality problems $52,000 Technical support provided to suppliers $18,000 Returns arising from quality problems $39,000 Eagle Company's quality cost report is to be based on the data shown. What would be the total appraisal cost appearing on the quality cost report? Question 17 options: A) $78,000 B) $75,000 C) $105,000 D) $100,000

Answers

Answer:

$75,000

Explanation:

Calculation for What would be the total appraisal cost appearing on the quality cost report

Total Appraisal cost= Addition of

Testing and inspection of incoming materials and Final product testing and inspection

Hence ,

Total Appraisal cost =Testing and inspection of incoming materials $48,000 + Final product testing and inspection $27,000

Total Appraisal cost =$75,000

Therefore the Total Appraisal cost appearing on the quality cost report will be $75,000

To take into consideration demand uncertainty in reorder point (R) calculations, what do we add to the product of the average daily demand and lead time in days when calculating the value of R

Answers

Answer:

The answer is "The result of the standard deviation of request and a 'z' rating over a certain possibility of operation".

Explanation:

When we have determined 10 units per day for standard deviation with supply, while the period to ordering in 5 days. Its standard 5-day duration is or the equation 17.8, which is multiplied by the z-score, which is the equation 17.9 has as long as per day is selected based, that's why the result of normal volatility of request as well as a 'z' score over a certain possibility of service is correct.

Financial statement data for the year ending December 31 for Navajo Company follow: Sales $2,550,000 Net income 1,258,000 Fixed assets (net): Beginning of year 800,000 End of year 985,000 The fixed asset turnover ratio for Navajo Company on December 31 would be 2.9. 2.6. 1.4. None of these choices are correct.

Answers

Answer:

Fixed Asset Turnover Ratio=2.9 Times

Explanation:

Calculation for the fixed asset turnover ratio for Navajo Company on December 31

The first step is to find the Average fixed asset

Using this formula

Average fixed assets=Beginning of year fixed assets + End of year Fixed assets/2

Let plug in the formula

Average Fixed assets =800,000+985,000/2

Average Fixed assets =$1,785,000/2

Average Fixed assets=$892,500

The next step is to calculate for the Fixed asset turnover ratio

Using this formula

Fixed asset turnover ratio=Sales/Average

Let plug in the formula

Fixed Asset Turnover Ratio=$2,550,000/$892,500

Fixed Asset Turnover Ratio=2.9 Times

Therefore fixed asset turnover ratio for Navajo Company on December 31 will be 2.9 Times

A broker from Nebraska wants a license in Florida. He takes a written exam of 40 questions and passes 35 of them. The broker has taken advantage of the written agreements between the states for real estate licensing. This is an example of:

Answers

Answer:

A mutual recognition agreement between the states of Florida and Nebraska, created for real estate licensing.

Explanation:

A mutual recognition agreement is defined as a situation where 2 more countries recognise conformity examination results of each other. So a person that writes an examination and passes in one location can get a liscence in another country based on his exam results.

In the given scenario a broker from Nebraska wants a license in Florida. He takes a written exam of 40 questions and passes 35 of them.

After passing the exam he is able to obtain a real estate liscence in Florida.

This is an example of Mutual recognition agreement between Nebraska and Florida.

The Cash account in the ledger of Hensley, Inc. showed a balance of $3,100 at June 30. The bank statement, however, showed a balance of $3,900 at the same date. The only reconciling items consisted of a $700 deposit in transit, a bank service charge of $7, and a large number of outstanding checks.1. Refer to the above data. Upon completion of the bank reconciliation, a journal entry will be required to update the depositor's accounting records. This entry will inchude:______.a) a credit to Cash for $700. b) a debit to Cash for $700. c) a debit to Cash for $7. d) a debit to Bank Service Charge Expense for $7. 2. Refer to the above data. What is the total amount of the oustanding chocks a Tone 30?A) $1,513. B) $1,486.C) $1,507.D) Some other amount.

Answers

Answer:

1. d) a debit to Bank Service Charge Expense

2.d) Some other amount.

Explanation:

1. No journal entries are prepared to record deposits in transit and outstanding checks because these items have already been recorded in the books. Therefore, only one journal entry will be required to record the bank service charge of $7. The bank service charge is an expense and will be recorded by debiting bank service charge expense account and crediting cash by $7.

2. Total amount of outstanding checks  = Balance per bank statement + Deposit in transit - Balance per books - Bank service charge

Total amount of outstanding checks = $3,900 + $700 - $3,100 - $7

Total amount of outstanding checks  = $1,493

On March 1, Lincoln sold merchandise on account to Windsor Company for $29,200, terms 1/10, net 45. On March 6, Windsor returns merchandise with a sales price of $2,700. On March 11, Lincoln receives payment from Windsor for the balance due. Prepare journal entries to record the March transactions on Lincoln’s books.

Answers

Answer:

                                Journal entries

Date        Account title and explanation      Debit        Credit

Mar 1          Account receivable                    $29,200

                        Sales revenue                                         $29,200

Mar 6        Sales return and allowance         $2,700

                         Account receivable                                $2,700

Mar 11         Cash                                             $26,235

                  ($26,500 * 99%)

                  Sales discount                              $265

                           Account receivable                              $26,500

                           ($29,200 - $2,700)

You were asked to provide a report on performance of the project. The project is composed of 6 phases with each phase lasting for 2 weeks and an approved budget of $10,000 for the entire project. You are now at end of week 6. At this point you've spent exactly half your budget and the work that was planned for phases 1, 2, and 3 has been completed.
A. Project is on time and on budget
B. The project is on time, but we cannot determine whether the project is on budget
C. The project is on budget, but we cannot determine whether the project is on time
D. It's impossible to tell anything

Answers

Answer:

Option B. The project is on time, but we cannot determine whether the project is on budget

Explanation:

Each of the phase takes 2 weeks and $100,000 and at the end of the week 6 we can say that 3 phases of the project have been completed. Therefore, the task of completing 3rd phase is within time (3*2=6), which means that the project is on time.

But here we can't tell which phase exceeded the budget and which didn't exceeded the budget. So this can not be estimated here because of lack of information. Hence we can say that we are unable to form opinion on whether the project was on budget or not.

Olympia Marketing has instituted new policies around misappropriation of assets, conflicts of interests, and kickbacks. Also with the local elections just around the corner, management sent out reminders about political contributions and confidentiality of company information. All of these policies can be found in Olympia Marketing's
a) employee handbook
b) policies and procedures manual
c) moral rights
d) approach C

Answers

Answer:

b) policies and procedures manual.

Explanation:

A company's policies and procedures manual is essential for establishing norms and rules that will guide the company's operation.

Through corporate policies, it is possible to determine actions, conducts, practices and values ​​that the company adopts in order to achieve its objectives and goals, and demonstrate what are its fundamental values ​​that give this organization its own identity and the foundations that will make it different from other companies in the competitive market.

Janis owns and operates a store in a country experiencing a high rate of inflation. In order to prevent the value of money in her cash register from falling too quickly, Janis sends an employee to the bank four times per day to make deposits in a interest-bearing account that protects the store's revenues from the effects of inflation.(a) This is an example of the:i. menu costsii. unit of account costsiii. shoe leather costs of inflation.(b) Explain briefly the nature of the costs imposed.

Answers

Answer:

shoe leather costs

Explanation:

The shoe-leather cost is the cost that deals in time and effort which people spent against the inflation effect i.e reduction in inflation like less cash held so that it would make extra trips to the bank

Also if the inflation of the economy rises so the consumer spending would be less as it directly affects the purchasing power of the customer

So the time and cost effort spent is known as shoe leather cost

Muir Manufacturing produces two popular grades of commercial carpeting among its many other products. In the coming production period, Muir needs to decide, how many rolls of each grade should be produced in order to maximize profit? Each roll of Grade X carpet uses 50 units of synthetic-fiber, requires 25 hours of production time, and needs 20 units of foam backing. Each roll of Grade Y carpet uses 40 units of synthetic-fiber, requires 28 hours of production time, and needs 15 units of foam backing.
The profit per roll of Grade X carpet is $200 and the profit per roll of Grade Y carpet is $160. In the coming production period, Muir has 3000 units of synthetic-fiber available for use. Workers have been scheduled to provide at least 1800 hours of production time (overtime is a possibility). The company has 1500 units of foam backing available for use. Develop a linear programming model for this problem.
1. Define the Decision Variables.
2. Write the Objective.
3. Write the Constraints.

Answers

Answer:

Kindly check explanation

Explanation:

A) DECISION VARIABLES :

The decision variables in the question above lies in Muir Manufacturing Company's Production target in the coming production period:

The decision variables are thus:

1) Determining the number of rolls of Grade X carpet to manufacture.

11) Determining the number of Grade Y carpet to manufacture.

2) OBJECTIVES :

The objective is to maximize profit :

Profit per roll of Grade X carpet = $200

Profit per roll of Grade Y carpet = $160

The objective function is thus :

$200x + $160y

C.) THE CONSTRAINTS :

1) Synthetic fibre required:

Grade X = 50 units

Grade Y = 40 units

Total available units = 3000

50X + 40Y ≤ 3000

Production time:

Grade X = 25 hours of production time

Grade Y = 28 hours of production time

Scheduled production time to be provided by workers is atleast 1800 hours (since there is possibility for overtime).

25X + 28Y ≥ 1800

111) Foam backing required:

Grade X = 20 units

Grade Y = 10 units

Total available units = 1500

20X + 10Y ≤ 1500

Each roll of Grade X carpet uses 50 units of synthetic-fiber, requires 25 hours of production time, and needs 20 units of foam backing. Each roll of Grade Y carpet uses 40 units of synthetic-fiber, requires 28 hours of production time, and needs 15 units of foam backing.

Which of the following was the first emission control device?

A.Muffler
B.Catalytic converter
C.PCV Valve
D.HO2S Sensor

Answers

Answer:

The answer is A. The Muffler

Explanation:

The first muffler for cars was designed in 1897.

The function of the car muffler is to slow down the speed of movement of the exhaust gases, which helps to smooth the movements of the engine, reduce the temperature of the gases and reduce the emissions of substances that are harmful to the environment.

Suppose you manage a delivery company and you must choose between two transportation methods: (a) truck or (b) train. (a)Trucks: Costs U$ 26,000 upfront. For each mile it runs it costs U$ 2.00 in gas. Maintenance costs U$ 4,000 per year and additional U$ 1.00 per mile run. (b)Train: To lease a container that carries the same volume of orders as the truck it costs U$ 10.000 per year. In addition it costs U$ 4.00 per mile to move orders around. Which method has the lowest cost

Answers

Answer:

Which method has the lowest cost: Train.

Explanation:

From the scenario given between using the truck or train for transportation, the option with the lowest cost happens to be by train despite having high cost per mile for moving the goods.

For example, if the goods is to be moved over 1000 miles, it would cost the truck higher than when the train was used.

For Truck:

Cost of Truck: $26,000

Gas: $2 × 1000 = $2000

Extra: $1 × 1000 = $1000

Total: $29,000

For Train:

Cost: $10,000

Mile cost: $4 × 1000 = $4000

Total: $14,000

Therefore, for every 1000 miles covered, it was cheaper to use the train (lease a container carrier in train) than to use the Truck.

________involves employees and organizational representatives meeting with a neutral third party who tries to help the two sides reach a mutually agreed-upon solution

Answers

Answer:

Mediation.

Explanation:

This is explained to be a process that has been well structured which is seen to be plain and also interactive, having compulsorily a third party who is impartial in conflict resolution that is seen to be between an employee and a said organisation. Certain mediation cases may be seen to be informal meeting among the parties or a scheduled settlement conference. This dispute in some cases when it is a little blown out of proportion by the mediator, may either be pending in a court or potentially a dispute which may be filed in court. Cases suitable for mediation are disputes in commercial transactions, workers compensation, labor or community relations, domestic relations, employment or any other matters which do not involve complex procedural or evidentiary issues.

Able Co. uses an online sales order processing system to process its sales transactions. Able's sales data are electronically sorted and subjected to edit checks. A direct output of the edit checks most likely would be a

Answers

Answer: D. File of all rejected sales transactions.

Explanation;

When Edit Checks are applied to sales transactions, the transactions will be checked for issues such as completeness, reasonableness and validity amongst others. If the transactions do not satisfy these, they will be rejected.

After they are rejected, the Edit Checks utility would record these rejections in a file so that the company can evaluate them for errors, correct the errors and then resubmit the transactions.  

Palencia Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. Its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The current stock price is P0 = $22.00. The last dividend was D0 = $3.00, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places. Do not round your intermediate calculations.

Answers

Answer:

cost of common equity is 18.64%.

WACC is 15.93 %.

Explanation:

Cost of Equity is the return that is required by providers of Capital in form of Common Stocks.

This can be determined using the Growth Model as the information permits use of such method.

Cost of Equity = Current Dividend / Current Market Price + Expected Growth Rate

                       = $3.00 / $22.00 + 0.05

                       = 0.1864 or 18.64%

WACC = Ke × (E/V) + Kd × (D/V) + Kp × (P/V)

where,

Ke = cost of equity

    = 18.64%

E/V = Weight of Equity

      = 75%

Kd = cost of debt

     = Interest × (1 - market rate)

     = 0.13 × (1 - 0.40)

     = 0.078 or 7.80 %

D/V = Weight of Debt

       = 25%

Therefore,

WACC = 18.64% × 75% + 7.80 % × 25%

           = 15.93 %

Banc Corp. Trust estimates that it costs $500 to analyze and close a commercial loan. This amount has been included in the $396,000 of overhead costs. How much of the remaining overhead costs should be allocated to the Consumer Department?

Answers

Complete question :

Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $396,000 of indirect costs. The bankwide rate couldbe based on either direct labor hours (DLH) or the number of loans processed. The departmental rates would be based on direct labor hours for ConsumerLoans and a dual rate based on direct labor hours and the number of loans processed for Commercial Loans. The following information was gathered for the upcoming period.

Dept - - - - - - - DLH - - loan processed - - - d/cost

Consumer - 14000 - - - 700 - - - - - - - - 280,000

Commercial - 8000 - - 300 - - - - - - - 180,000

Banc Corp. Trust estimates that it costs $500 to analyze and close a commercial loan. This amount has been included in the $396,000 of overhead costs. How much of the remaining overhead costs should be allocated to the Consumer Department?

Answer:

$172,200

Explanation:

Number of commercial loans processed = 300

Cost of processing a commercial loan = $500

Overhead cost = $396,000

Total cost = 300 * $500 = $150,000

Overhead left = $(396,000 - 150,000) = $246,000

Overhead sharing between commercial and consumer department :

Total loans = (300 + 700) = 1000

Number of consumer department loan = 700

Consumer department overhead :

(246,000 / 1000) * 700

246 * 700 = $172,200

Stevenson, Ross, and Warner (SRW) ​ Maddie is the CEO of Stevenson, Ross, and Warner (SRW), a regional accounting firm. SRW offers services in most areas of accounting, including auditing and consulting services. The firm must follow the GAAP rules, just like any other accounting firm. If there are information gaps that are not addressed and resolved by the firm, SRW could be considered a violator of the Sarbanes-Oxley Act. Maddie understands what must be done and wants every employee of the firm to understand that they have to follow all the rules and regulations. Like any other industry, accounting is a competitive industry and employees of accounting firms must be productive, progressive, and well trained. Refer to Stevenson, Ross, and Warner. In order to be successful in the accounting industry, SRW employees must:__________.
A. know all areas of accounting and marketing.
B. have complete human resources training.
C. be able to communicate in multiple languages.
D. know how to do accounting the old fashioned way-using the manual, double-entry system.
E. have a strong background in financial management.

Answers

Answer:

E. have a strong background in financial management.

Explanation:

Since in the question it is mentioned that  (SRW) which is a regional accounting firm that offers services like auditing, accounting, and consultancy. But there are gaps in the information that are not solved by the firm also it violates the Sarbanes-Oxley Act.

Now to be successful there should be a strong background in the financial management

Hence, the option E is correct

You are interested in purchasing a digital camera and find one priced extremely low. As you are about to purchase the camera, you discover that it does not come with a power cord, memory card, or battery. You purchase all of these separately. The total cost surpasses what you would have paid at another store that listed the camera at a higher price, but included all the accessories. You have been a victim of the _______ technique.

Answers

Answer:

low-ball technique

Explanation:

Based on the scenario being described it seems that you have been a victim of the low-ball technique. This is a persuasion tactic in which an item is marked at a very tempting low price in order to get customers to commit to the purchase, but when they do commit the price is increased in one way or another. Which in this case was by requiring extra components to be able to use the camera.

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