Answer:
A. True
Explanation:
In the case of the inventory turnover ratio and the days sales outstanding, these two ratios are applied in order to analyze how the firm would managed in effective manner in terms of the liquidity with respect to the present and the expected level of operations
So, the given statement is true
Therefore the option a is correct
Chad, who owns the only coffee shop in Rivercity, learns that Jose is about to open a competing coffee shop in the same small town, just a few blocks from Chad's. Chad offers Jose $10,000 in return for Jose's promise not to open a coffee shop in the Rivercity area for six months. Jose accepts the $10,000 but goes ahead with his plans, even though he had agreed not to do so. When Jose opens his coffee shop for business, Chad sues to enjoin Jose's continued operation or to recover the $10,000
Required:
Can Chad sues Jose?
Answer:
Rivercity Coffee Shop
Chad cannot sue Jose. The $10,000 is paid to Jose is a bribe. Since a bribe is not legal, it cannot form the basis for an enforceable contract.
Moreover, the offer by Chad is an antitrust and anti-competition consideration that is legally frowned upon. illegal contract
Explanation:
For a contract to be enforceable, it cannot be illegal. A bribe is illegal. The basis for the contract is illegal. Therefore, Chad cannot sue Jose. Since Jose decided to breach the contract, neither Chad nor Jose is entitled to any compensation. Jose cannot be held liable for non-performance.
If the dollar contribution margin per unit is increased by 10%, total fixed expenses is decreased by 20%, and all other factors remain the same, net operating income will:
Answer:
Operating profit increases by $11,000
Explanation:
Missing word "A company has provided the following data: Sales 3,000 units Sales Price $70 per unit Variable Cost $50 per unit Fixed Cost $25,000"
Particulars Status quo
Sales $210,000 (3000*70)
Less: Variable cost $150,000 (3000*50)
Contribution margin $60,000
Less: Fixed costs $25,000
Operating profit $35,000
Alternate profit = Alternate contribution margin - Alternate fixed cost
Alternate profit = [(Status quo contribution margin + %change) − (Alternate fixed cost-%change)]
Alternate profit = ($60,000+10%)−($25,000−20%)
Alternate profit = $46,000
Change in profit = Alternate profit - Status quo profit
Change in profit = $46,000 - $35,000
Change in profit = $11,000
So, the operating profit increases by $11,000
Goodwill arises when one firm acquires the net assets of another firm and pays more for those net assets than their current fair value. Suppose that Target Co. had operating income of $1,215,000 and net assets with a fair value of $5,400,000. Takeover Co. pays $8,100,000 for Target Co.’s net assets and business activities.
Required:
a. How much goodwill will result from this transaction?
b. Calculate the ROI for Target Co. based on its present operating income and the fair value of its net assets.
c. Calculate the ROI that Takeover Co. will earn if the operating income of the acquired net assets continues to be $180,000.
d. What reasons can you think of to explain why Takeover Co. is willing to pay $300,000 more than fair value for the net assets acquired from Target Co.?
Answer:
A. $2,700,000
B. 22.5%
C. 2.22%
D. Target Co was a profit making company
Explanation:
a. Calculation to determine How much goodwill will result from this transaction
Goodwill=$8,100,000- $5,400,000
Goodwill=$2,700,000
Therefore the goodwill that will result from this transaction is $2,700,000
b. Calculation to determine the ROI for Target Co.
Using this formula
Return on investment = Operating income / Net assets * 100
Let plug in the formula
Return on investment=$ 1,215,000 /$5,400,000 * 100
Return on investment= 22.5%
Therefore the ROI for Target Co is 22.5%
c. Calculation to determine the ROI that Takeover Co.
Using this formula
Return on investment = Operating income / Net assets * 100
Let plug in the formula
Return on investment= $180,000 / 8,100,000 * 100
Return on investment=2.22%
Therefore the ROI that Takeover Co is 2.22%
d. Based on the information given the reason
why TAKEOVER CO. is willing to pay the amount of $300,000 more than the FAIR VALUE for the NET ASSETS that was ACQUIRED from Target co., was because Target Co was a profit making company.
You have just started a new job and plan to save $5,200 per year for 36 years until you retire. You will make your first deposit in one year. How much will you have when you retire if you earn an annual interest rate of 9.54 percent?
a. $1,331,411.17
b. $1,394,509.68
c. $1,346,423.14
d. $1,268,312.65
e. $1,333,878.83
Answer:
$1,394,509.68
Explanation:
Savings amount = $5200
Period = 36 years
Interest = 9.54 percent
We solve for the future value of the annuity
= $5200[(1+0.0954)³⁶-1/0.0954]
= 5200 x [1.0954³⁶-1/0.0954]
= 5200 x 268.1749
= 1,394,509.681 dollars
Therefore after retirement and at an interest rate of 9.54 percent, you would be earning 1,394,509.681 dollars.
Option b.
4. Social responsibility is an area of business with issues that
A. are easy to resolve.
B. change constantly in response to society's demands.
C. stay constant due to consistent societal demands.
D. change occasionally in response to society's demands.
Social responsibility is an area of business that changes occasionally in response to society's demands. So the correct option is D.
How does the business determine society's demands?Businesses must decide what to produce to satisfy the needs and wants of the society or consumer. Business determined the taste, preference of the consumer, and level of income, fashionable trends also help.
The business firm also contributes to the growth of society by bringing innovation in the market, to provide better facilities for the consumer.
Therefore the correct option is D.
Learn more about Society's demand here:
brainly.com/question/4192569
Implement anyone principle from Industry 4.0 Six Design Principles on any organization?
Answer:
There is no principal in this room.
Explanation:
Come and get it https://app.conversion.ai/
Dristell Inc. had the following activities during the year (all transactions are for cash unless stated otherwise):
A building with a book value of $400,000 was sold for $500,000.
Additional common stock was issued for $160,000.
Dristell purchased its own common stock as treasury stock at a cost of $75,000.
Land was acquired by issuing a 6%, 10-year, $750,000 note payable to the seller.
A dividend of $40,000 was paid to shareholders.
An investment in Fleet Corp.’s common stock was made for $120,000.
New equipment was purchased for $65,000.
A $90,000 note payable issued three years ago was paid in full.
A loan for $100,000 was made to one of Dristell’s suppliers. The supplier plans to repay Dristell this amount plus 10% interest within 18 months.
Answer:
Net cash flows from financing activities = (45000)
Explanation:
Common stock issued 160000
Treasury stock purchased (75000)
Dividends paid (40000)
Note payable repaid (90000)
Net cash flows from financing activities
(45000)
Lieutenant Commander Data is planning to make his monthly (every 30 days) trek to Gamma Hydra City to pick up a supply of isolinear chips. The trip will take Data about three days. Before he leaves, he calls in the order to the GHC Supply Store. He uses chips at an average rate of seven per day (seven days per week) with a standard deviation of demand of two per day. He needs a 98 percent service probability.
Required:
If he currently has 35 chips in inventory, how many should he order? What is the most he will ever have to order?
Answer:
219.57 units
Explanation:
Given :
Daily demand, d = 7 per day
Standard deviation, = 2 per day
Service probability = 98%
Total number of days per week = 7
Lead time , L = 3 days
On hand inventory, I = 35
Now calculating the optimal order quantity by using the given formula,
[tex]$q=d(T+L)+ z \ \sigma_{r+L}-I$[/tex] .............(i)
First, we will find out the value of [tex]$\sigma_{r+L}$[/tex] and z.
Therefore,
[tex]$\sigma_{r+L}=\sqrt{(30+3)(2)^2}$[/tex]
[tex]$=\sqrt{132}$[/tex]
= 11.48
Now the value of z can be found out from the z-table,
Z value for 98% service level = 2.054
Now putting the value of [tex]$\sigma_{r+L}$[/tex] and z in equation (i), we get,
[tex]$q=d(T+L)+ z \ \sigma_{r+L}-I$[/tex]
= (7)(30+3)+(2.054)(11.48) - 35
= 231 + 23.57 - 35
= 219.57 units
So the optimal number of the units required to be order = 219.57 units
Before communicating, the sender must encode the idea that he or she wants to communicate, or put it into some form or code that he or she hopes the other person can understand.
a. True
b. False
Answer:
a. True
Explanation:
The communication process can be regarded as process of passing information from sender to receiver,
It consist of four key components which are;
✓ encoding
✓medium of transmission
✓decoding
✓ feedback.
Decoding can be regarded as reverse process of listening to words as well as thinking about those words, follow by transformation of those words into mental images
Encoding can be regarded as
process involving taking an idea or mental image, then associate that idea or image with words, follow by speaking those words so that message
can be conveyed. communication can not be complete until the receiver confirms the sent message by the sender , by receiving and understood it.It should be noted that Before communicating, the sender must encode the idea that he or she wants to communicate, or put it into some form or code that he or she hopes the other person can understand.
Mar. 1 CMS began operations by receiving $100,000 in cash. The business issued shares of common stock in exchange for this contribution. Mar. 1 CMS paid $1,200 for a 12 month insurance policy. The policy begins Mar. 1. Mar. 4 CMS guided a small rock climbing trip, receiving $20,000 payment in cash. Mar. 22 Collected $3,000 cash from customer on account. Mar. 24 Paid rent on their property, $4,000 cash. Mar. 27 Paid $1,000 cash on account. Mar. 31 Cash dividends of $2,500 were paid to stockholders.Prepare the bank reconciliation at March 31, 2021.
Journalize any required entries from the bank reconciliation.
Prepare a cash t-account to verify the balance of the account matches the adjusted book balance from the bank.
Answer:
Reconciled Bank Balance $114,300.
Explanation:
Cash for operations $100,000
Less: Insurance policy subscription $1,200
Add: Fee for services $20,000
Add: Cash Collection $3,000
Less: Rent expense $4,000
Less: Payment on account $1,000
Less: Cash Dividends paid $2,500
Reconciled Balance $114,300
On January 7, stockholders invest $45,000 in JumpStart in exchange for common stock. Provide the journal entry for this transaction.
Answer:
Dr Cash $45,000
Cr Common stock $45,000
Explanation:
Preparation of the journal entry
Based on the information given the appropriate Journal entry On January 7 since the stockholders invest the amount of$45,000 in JumpStart in exchange for common stock will be:
January 7
Dr Cash $45,000
Cr Common stock $45,000
(To record investment in JumpStart)
Explain how business can deal with unemployment as one of their initiative to address socio-economic issues
Answer:
Below is the required solution.
Explanation:
How can companies influence the crisis in jobs and skills? Nearly 80 case studies show three areas in which businesses can take the lead:
Work with educational and training providers to assist people in developing the skills they need in the world of workSupport startups and smaller companies to promote entrepreneurshipLink talent to markets by bridging the gap between employers and job-seekers.Eight factors that can make programmes and practises more effective also emerge from case studies.
Build multi-sector partnershipsDevelop win-win approachesUnderstand the talent value chainBe relevant to the contextCommit leadership to the causeDesign for the futureLeverage ICTTest first, scale secondDoug Allen has decided to go into the insect extermination business and to operate as Doug's Extermination Service. The following transactions were completed during the first month of operations, May, 20--.
1. Doug invested $35,000 cash in the business.
2. Purchased extermination equipment for $17,000 in cash.
3. Paid $700 rent for garage and office quarters.
4. Purchased chemicals (expense) for $1,100 from Low Glow Chem Co. on account.
5. Received $1,600 revenue for extermination service.
6. Paid telephone bill, $120
7. Paid assistant's salary, $700.
8. Earned $980 revenue for extermination service, on account.
9. Paid electric bill, $230.
10. Paid for truck repairs (expense), $145.
11. Paid $600 to Low Glow Chem Co., on account.
12. Paid $131 for gas and oil for truck (expense).
13. Received $1,400 revenue for extermination service.
14. Received $500 for services previously earned on account in transaction (8).
15. Paid assistant's salary, $900.
Required:
Write the transactions in the T accounts, then write the total of each column. If an account has entries on both sides, determine the balance and enter it on the side with the larger total.
Answer:
Doug's Extermination Service
T-accounts:
Cash
Account Titles Debit Credit
Common stock $35,000
Extermination equipment $17,000
Rent 700
Extermination Revenue 1,600
Utilities Expense 120
Salary Expense 700
Utilities Expense 230
Truck Expenses 145
Accounts Payable (Low Glow) 600
Truck Expense 131
Extermination service 1,400
Accounts Receivable 500
Salary Expense 900
Balance $17,974
Common Stock
Account Titles Debit Credit
Cash $35,000
Extermination equipment
Account Titles Debit Credit
Cash $17,000
Rent Expense
Account Titles Debit Credit
Cash $700
Supplies Expense
Account Titles Debit Credit
Accounts payable $1,100
Accounts Payable (Low Glow Chem Co.)
Account Titles Debit Credit
Supplies Expense $1,100
Cash $600
Balance $500
Extermination Service Revenue
Account Titles Debit Credit
Cash $1,600
Accounts Receivable 980
Cash 1,400
Balance $3,980
Utilities Expense
Account Titles Debit Credit
Cash $120
Cash 230
Balance $350
Salary Expense
Account Titles Debit Credit
Cash $700
Cash 900
Balance $1,600
Accounts Receivable
Account Titles Debit Credit
Extermination Service Revenue $980
Cash $500
Balance $480
Truck Expenses
Account Titles Debit Credit
Cash $145
Cash 131
Balance $276
Explanation:
a) Data and Analysis:
1. Cash $35,000 Common Stock $35,000
2. Extermination equipment $17,000 Cash $17,000
3. Rent $700 Cash $700
4. Supplies Expense $1,100 Accounts Payable (Low Glow Chem Co.) $1,100
5. Cash $1,600 Extermination Service Revenue $1,600
6. Utilities Expense $120 Cash $120
7. Salary Expense $700 Cash $700
8. Accounts Receivable $980 Extermination Service Revenue $980
9. Utilities Expense $230 Cash $230
10. Truck Expenses $145 Cash $145
11. Accounts Payable (Low Glow Chem Co.) $600 Cash $600
12. Truck Expense $131 Cash $131
13. Cash $1,400 Extermination Service Revenue $1,400
14. Cash $500 Accounts Receivable $500
15. Salary Expense $900 Cash $900
Tori Inc. has some material that originally cost $68,800. The material has a scrap value of $30,300 as is, but if reworked at a cost of $1,500, it could be sold for $31,600. What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as scrap? (CIMA adapted)
a. $(71,100)
b. $(1,100)
c. $29,800
d. $(40,200)
Answer:
($200)
Explanation:
Calculation to determine What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as scrap
Sales value of reworked material: $31,600
Less: Cost to rework material: $1,500
Net Sales Value: $30,100
Current Scrap Value: $30,300
Net Disadvantage: ($200)
($30,100-$30,300)
Therefore What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as scrap is ($200)
hãy lựa chọn 1 công ty sử dụng dịch vụ nghiên cứu của marketing của các nhà cung cấp bên ngoài.
1. tìm hiểu lý do công ty phải thuê ngoài
2. những tổ chức nào đã cung cấp dịch vụ marketing cho công ty?
3. công ty thuê một phần hay thuê toàn bộ các hoạt động nghiên cứu marketing
Answer:
may I know which language
Swifty Corporation took a physical inventory on December 31 and determined that goods costing $215,000 were on hand. Not included in the physical count were $27,000 of goods purchased from Marigold Corp., FOB, shipping point, and $20,000 of goods sold to Concord Corporation for $34,000, FOB destination. Both the Marigold purchase and the Concord sale were in transit at year-end.
Required:
What amount should Swifty report as its December 31 inventory?
Answer:
$262,000
Explanation:
Ending inventory = Goods on Hand + Cost Goods purchased from Marigold Corp + Cost of goods sold to Marigold Corp.
Ending inventory = $215,000 + $27,000 + $20,000
Ending inventory = $262,000
So, the amount that should Swifty report as its December 31 inventory is $262,000.
The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $43,000 are expected. The partnership balance sheet at the start of liquidation is as follows:
Cash $39,000 Liabilities $179,000
Accounts receivable 69,000 Butler, loan 39,000
Office equipment (net) 59,000 Butler, capital (25%) 95,000
Building (net) 155,000 Osman, capital (25%) 39,000
Land 145,000 Ward, capital (50%) 115,000
Total assets $467,000 Total liabilities and capital $467,000
Required:
Prepare a predistribution plan for this partnership
Answer:
Butler, Osman, and Ward Partnership
Predistribution Plan:
Total assets realized (assumed) $467,000
Less liquidation expenses 43,000
Liabilities 179,000
Butler, loan 39,000
Cash available for distribution $206,000
Butler, capital (25%) 84,250 ($95,000 - $10,750)
Osman, capital (25%) 28,250 ($39,000 - $10,750)
Ward, capital (50%) 93,500 ($115,000 - $21,500)
Explanation:
a) Data and Calculations:
Expected liquidation expenses = $43,000
Cash $39,000
Accounts receivable 69,000
Office equipment (net) 59,000
Building (net) 155,000
Land 145,000
Total assets $467,000
Liabilities $179,000
Butler, loan 39,000
Butler, capital (25%) 95,000
Osman, capital (25%) 39,000
Ward, capital (50%) 115,000
Total liabilities and capital $467,000
Predistribution Plan:
Total assets realized (assumed) $467,000
Less liquidation expenses 43,000
Liabilities 179,000
Butler, loan 39,000
Cash available for distribution $206,000
Butler, capital (25%) 84,250 ($95,000 - $10,750)
Osman, capital (25%) 28,250 ($39,000 - $10,750)
Ward, capital (50%) 93,500 ($115,000 - $21,500)
b) Each partner will share in the liquidation expense according to their profits and losses sharing ratios. This will reduce their capital account balances and show the net cash they will collect upon liquidation. Note that this plan is based on the assumption that all the assets will be completely realized, that is, without any loss.
Exercise 9-15A (Static) Using the current ratio to make comparisons LO 9-7 The following information was drawn from the balance sheets of the Kansas and Montana companies: Kansas Montana Current assets $ 59,000 $ 78,000 Current liabilities 40,000 43,000 Required a. Compute the current ratio for each company. b. Which company has the greater likelihood of being able to pay its bills
Answer:
a. 1.5 and 1.8
b. Montana
Explanation:
Below is the calculation for the current ratio:
a. Formula used, Current ratio = Current assets / Current liabilities
Current ratio of Kansas = 59000 / 40000 = 1.5
Current ratio of Montana = 78000 / 43000 = 1.8
b. The company that has a higher current ratio will have a greater likelihood to pay bills so Montana is the correct answer.
Assume that Germany and China can produce beer and cloth. If the MPLc/MPLb for Germany is 2/5 and the MPLc/MPLb for China is 1, then Germany should: _______
Answer: c. specialize in producing beer and export beer.
Explanation:
As per the Theory of Competitive Advantage posited by David Ricardo, a country should specialize in the good that it has a competitive advantage in. A country has a competitive advantage if it incurs a less opportunity cost in producing the good.
Opportunity cost of producing beer for Germany = MPLc/MPLb = 2/5
Opportunity cost of producing beer for China = MPLc/MPLb = 1
Germany has a lower cost of producing beer so they should specialize in this and export it.
Compute straight-line depreciation on the building at the end of one year, assuming an estimated 10-year useful life and a $16,000 estimated residual value. (Do not round intermediate calculations.)What should be the book value of (a) the land and (b) the building at the end of year 2
Answer:
Missing word "Bridge City Consulting bought a building and the land on which it is located for $120,000 cash. The land is estimated to represent 70 percent of the purchase price. The company paid $10,000 for building renovations before it was ready for use."
Total Cost of Land and Building (100%) = $120,000
Cost of Land (70%) = $84,000
Cost of Building (30%) = $36,000
Cost of Building Renovations = $10,000
Total Cost of Building = $36,000 + $10,000
Total Cost of Building = $46,000
1. Annual Depreciation(Year End Depreciation) = (Cost of Building - Residual Value)/ Number of Year
Annual Depreciation = $46,000 - $16,000 / 10
Annual Depreciation = $30,000 / 10
Annual Depreciation = $3,000
2. Book Value of Land at the end of two years = $84,000
Book Value of Building at the end of two years = $46,000 - ($3,000*2 year) = $46,000 - $6,000 = $40,000
Hence, Book Value of Land and Building at the end of two year is = $84,000 + $40,000 = $124,000
Economists look at any situation in terms of its component parts: the people making decisions, the environment in which they're making those decisions, and the goods or services being exchanged. For example, think about doing your laundry. Which of the following laundry-related items are nondurable goods?
a. A washing machine
b. Having a pair of pants dry-cleaned
c. A T-shirt
d. A clothes dryer
Find the APR, or stated rate, in each of the following cases (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.): Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) % Semiannually 10.7 % Monthly 11.6 Weekly 9.3 Infinite 13.0
Answer:
EAR = (1+APR/m)^m - 1 where m=compounding periods
1. 0.116 = (1+APR/2)^2 - 1
(1+0.116) = (1+APR/2)^2
(1.116)^(1/2) = 1+APR/2
APR = [(1.107)^(1/2) - 1]*2
APR = [1.05214067501 - 1]*2
APR = 0.05214067501 * 2
APR = 0.10428135002
APR = 10.43%
2. 0.116 = (1+APR/12)^12-1
APR = [(1+0.116)^(1/12)-1]*12
APR = [1.116^(1/12) - 1] * 12
APR = [1.00918785692 - 1] * 12
APR = 0.00918785692 * 12
APR = 0.11025428304
APR = 11.05%
3. 0.093 = (1+APR/52)^52 - 1
APR = [(1+0.093)^(1/52) - 1] * 52
APR = [1.093^(1/52) - 1] * 52
APR = [1.0017115825 - 1] * 52
APR = 0.0017115825 * 52
APR = 0.08900229
APR = 8.90%
Any help 75 points
Quantity supplied varies positively (directly) with price, other things constant, as price rises, the quantity supplied rises; as price falls, the quantity supplied decreases
Answer:
law of supply
Explanation:
this is the law of supply
June:
1 James Co. purchased merchandise on account from O’Leary Co., $90,000, terms n/30. The cost of merchandise sold was $54,000.
30 James Co. issued a 60-day, 5% note for $90,000 on account.
Aug. 29 James Co. paid the amount due.
Required:
Journalize the above transaction, 90,000 assuming a 360-day year is used for interest calculations.
Answer:
James Co. (Borrower)
June 1
Debit Merchandise Inventory $90,000
Credit Accounts Payable $90,000
June 30
Debit Accounts Payable $90,000
Credit Notes Payable $90,000
August 29
Debit Notes Payable $90,000
Debit Interest on Notes $750
Credit Cash Account $90,750
O’Leary Co. (Creditor)
June 1
Dr Accounts Receivable $90,000
Cr Sales $90,000
30
Dr Notes Receivable $90,000
Cr Accounts Receivable $90,000
Aug. 29
Dr Cash $90,750
Cr Notes Receivable $90,000
Cr Interest Revenue $750
Explanation:
Preparation of the journal entries
James Co. (Borrower)
June 1
Debit Merchandise Inventory $90,000
Credit Accounts Payable $90,000
(To record the purchase of merchandise on account)
June 30
Debit Accounts Payable $90,000
Credit Notes Payable $90,000
(To record the issue of a 60-day, 5% note)
August 29
Debit Notes Payable $90,000
Debit Interest on Notes $750
($90,000 * 5% * 60/360)
Credit Cash Account $90,750
($90,000+$750)
(To record the payment of the notes plus interest)
O’Leary Co. (Creditor)
June 1
Dr Accounts Receivable $90,000
Cr Sales $90,000
30
Dr Notes Receivable $90,000
Cr Accounts Receivable $90,000
Aug. 29
Dr Cash $90,750
($90,000+$750)
Cr Notes Receivable $90,000
Cr Interest Revenue $750
($90,000 * 5% * 60/360)
An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is (use the COGS equation for the Periodic System):__________
A. Cost of Goods Sold: Understated, and Net Income: Understated
B. Cost of Goods Sold: Overstated, and Net Income: Overstated
C. Cost of Goods Sold: Understated, and Net Income: Overstated
D. Cost of Goods Sold: Overstated, and Net Income: Understated
Answer:
C. Cost of Goods Sold: Understated, and Net Income: Overstated
Explanation:
The cost of goods can be defined as the amount that a business has to pay in other for them to get an inventory. the net income can be defined as the amount of money that is left from COGS and other expenditures that does not include taxes and payments of interest. Overstating the inventory causes the total amount of earnings to be overstated for that accounting period. while the cost of good sold would be understated
A firm is considering expanding its current operations and has estimated the internal rate of return on that expansion to be 12.2%. The firm's WACC is 11.8%. Given this, you know that the: the project will have a lower debt-equity ratio than the firm's current operations. the appropriate discount rate for the project is between 11.8% and 12.2%. the project has slightly more risk than the firm's current operations. the expansion should be undertaken as it has a positive net present value.
Answer:
expansion should be undertaken as it has a positive net present value
Perit Industries has $110,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:
Project A Project B
Cost of equipment required $110,000 $0
Working capital investment required $0 $110,000
Annual cash inflows $20,000 $68,000
Salvage value of
equipment in six years $8,600 $0
Life of the project 6 years 6 years
The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries’ discount rate is 16%.
Required:
1. Compute the net present value of Project A.
2. Compute the net present value of Project B.
3. Which investment alternative (if either) would you recommend that the company accept?
Answer:
$-32,775.48
$185,710.69
Project B
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
Project A
Cash flow in year 0 = -$110,000
Cash flow in year 1 - 5 = $20,000
Cash flow in year 6 = $20,000 + $8,600 = 28,600
I = 16%
NPV = $-32775.48
Project B
Cash flow in year 0 = -$110,000
Cash flow in year 1 - 5 = $68,000
Cash flow in year 6 = $68,000 + $110,000 = $178,000
I = 16%
NPV = $185,710.69
Project B should be chosen because its NPV is positive
To find the NPV 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 NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
The first step in the control process is ________. A) setting the desired morals
B) measuring actual performance
C) comparing performance against expectations D) applying managerial control
Answer:
comparing performance against expectations
Waggoner Company has a cash balance of $44,000 on April 1. The company is required to maintain a cash balance of $25,000. During April expected cash receipts are $174,000. Expected cash disbursements during the month total $200,800. During April the company will need to borrow:____.
a. $2,500.b. $3,500.c. $4,000.d. $6,000.
Answer: $7,800
Explanation:
The amount that the company needs to borrow can be found using the formula:
= Opening balance + Cash receipts - Cash to be maintained - Cash disbursement
= 44,000 + 174,000 - 25,000 - 200,800
= -$7,800
Amount to be borrowed is the shortfall of $7,800
1. Describe how a global project can be more complex than a project performed within just one country. How might these elements affect the successful outcome of the global project
Answer:
Globalization alters the project's characteristics. Multinational and multilingual initiatives are possible in global projects. Managers must be able to communicate with individuals from diverse nations.
A manager requires a different set of skills to manage projects on a global scale. The following are things he should be aware of:
Cultural sensitivity
Learn about the other organizations' traditions.
ability to operate in a fast-paced, unpredictably changing workplace
Create a productive team.
Develop a sense of trust
All of these elements are equally crucial for the project's worldwide success.
The initiatives that are held at a worldwide level are more difficult.
