Answer:
a.$36.80
b. $43.70
Explanation:
a. Calculation to determine What stock price would you consider appropriate
Using this formula
P= Benchmark PE ration x EPS
Let plug in the formula
P=16($2.30)
P=$36.80
Therefore What stock price would you consider appropriate is $36.80
b. Calculation to determine the stock price if the benchmark PE were 19
Using this formula
P= Benchmark PE ration x EPS
Let plug in the formula
P=19($2.30)
P= $43.70
Therefore the stock price if the benchmark PE were 19 will be $43.70
Mark Turney owns Creative Corners. He does his banking at United Federal Bank (UFB) in Tucson, Arizona. The amounts in his general ledger for payroll taxes and the employee's withholding of Social Security, Medicare, and federal income tax as of April 15 of the current year show the following: Social Security tax payable (employer and employee), $3,020; Medicare tax payable (employer and employee), $734; FUTA tax payable, $84; SUTA tax payable, $414; and Employees income tax payable, $4,622. Journalize the payment of the Form 941 deposit to UFB and the payment of the SUTA tax to the State of Arizona as of April 15, 20--.
Answer and Explanation:
The journal entries are shown below
On 15-Apr
FICA social Security tax payable Dr. $3,020
FICA medicare tax payable Dr. $734
Federal Income tax payableDr. $4,622
To Cash account $8,376
(Being cash paid)
on 15-Apr
State Unemployment tax payable Dr.$414
to Cash account $414
(being cash paid)
On 15-Apr
Federal Unemployment tax payable Dr. $84
To Cash account $84
(being cash paid is recorded)
Dotsero Technology, Inc. has a job-order costing system. The company uses predetermined overhead rates Iin apply manufacturing overhead cost to individual jobs. The predetermined overhead rate in department A is based on machine-hours, and the rate in department B is based on direct material cost. At the beginning of the most recent year, the company's management made the following estimates for the year:Department A Department BMachine-hours............................ 70,000 19,000Direct labor-hours........................ 30,000 60,000Direct materials cost..................... 195,000 282,000Direct labor cost.......................... 260,000 520,000Manufacturing overhead cost............ 420,000 705,000Compute the predeterminded overhead rates for department A and department B.
Answer:
Dept. A Dept. B
Machine hours 70,000
Direct Material Cost 282,000
Manufacturing overhead 420,000 705,000
Predetermined OH rate 420,000 / 70,000 705,000/282,000
= 6.00 per MH = 2.50 per dollar of DM cost
Stuart Software has 5.7 percent coupon bonds on the market with 11 years to maturity. The bonds make semiannual payments and currently sell for 93 percent of par. What is the current yield on the bonds
Answer:
current yield = 6.13%
Explanation:
Given:
The software has 5.7 percent coupon bonds
maturity=11 years
current sell=93 percent of par
The objective is to find the current yield on the bonds
Formula used:
Current yield = [tex]\frac{Annual Coupon payment}{current selling price}*100[/tex]
Solution:
Current selling price=93% of 1000=930
Annual coupon payment= 5.7% of 1000=57
Then,
On substituting the values in the formula,
Current yield = [tex]\frac{57}{930}[/tex]*100
On Simplifying,
Current yield =6.13%
Therefore,
Current yield =6.13%
Apple Computers Issued a 30-year $8,000,000 bond on January 1, 20xx with a 5% stated interest rated. Interest is paid semiannually on June 30 and December 31st. What is the amount that Apple Computers would record as interest expense on June 30, 20xx (the first interest payment), assuming that no interest expense has been recorded since the bond was issued on January 1st?
Answer:
$200,000
Explanation:
Now, it is assumed here that the bonds are issued at par.
First interest payment = Face Value * Stated Interest Rate * Half yearly
First interest payment = $8,000,000 * 5% * 1/2
First interest payment = $200,000
So, the amount that Apple Computers would record as interest expense on June 30 is $200,000.
Charles Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit Percent of Sales
Selling Price $190 100%
Variable Expenses 38 20%
Contribution Margin 152 80%
Fixed expenses are $87,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by $28. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $46,000 $39,500 Work in process $25,500 $36,000 Finished goods $41,500 $56,500 Additional information: Raw materials purchases $75,500 Direct labor cost $100,500 Manufacturing overhead cost incurred $68,500 Indirect materials included in manufacturing overhead cost incurred $11,800 Manufacturing overhead cost applied to Work in Process $67,500 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for July is:
Answer:
Cost of goods manufactured= $228,700
Explanation:
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 25,500 + (46,000 + 75,500 - 39,500) + 100,500 + (68,500 - 11,800) - 36,000
cost of goods manufactured= $228,700
We deduct the indirect material from overhead because it is already incorporated into direct materials.
MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age and includes "tours" of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production.
MSI's information related to the Toddle Town Tours collection follows: Segmented Income Statement for MSI's Toddle Town Tours Product Lines Post Office Parade Getaway _Polka Pet Store Grocery Total Sales revenue Variable costs $110,000 $105,000 $31,000 $246,000 43,000 28,000 118,000 $ 63,000 S 62,000 $ 3,000 $128,000 2,800 16,700 $ 55,800 S 55,300 $ 200 $ 111,300 1,550 12,300 47,000 1000 4 Contribution margin Segment margin Net operating income (loss) Less: Direct Fixed costs 7,200 006,700 Less: Common fixed costs .505350 99,000 50,300 $ 50,050S (1.350) S 5,500 0 $ 50,050 $ (1,350) $99,000 5,250 Allocated based on total sales dollars MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products Required 1. Calculate the incremental effect on profit if the POP product is eliminated Effect on Profit 2. Should MSI drop the POP product?
Answer:
MSI
1. Incremental effect on profit if the POP product is eliminated is:
Profit will be reduced by $200 ($99,000 - $98,800).
2. Yes. MSI should drop the POP product. POP product is like a dog in the BCG matrix.
Explanation:
a) Data and Calculations:
Segmented Income Statement
for MSI's Toddle Town Tours Product Lines
Pet Store Grocery Post Office Total
Parade Getaway Polka Firm
Total Sales revenue $110,000 $105,000 $31,000 $246,000
Variable costs 47,000 43,000 28,000 118,000
Contribution margin $ 63,000 $ 62,000 $ 3,000 $128,000
Less: Direct Fixed costs 7,200 6,700 2,800 16,700
Segment margin $ 55,800 $ 55,300 $ 200 $ 111,300
Less: Common fixed costs 5,500 5,250 1,550 12,300
Net operating income (loss) $50,300 $ 50,050 $ (1,350) $99,000
Segmented Income Statement after POP Elimination
for MSI's Toddle Town Tours Product Lines
Pet Store Grocery Total
Parade Getaway Firm
Total Sales revenue $110,000 $105,000 $215,000
Variable costs 47,000 43,000 90,000
Contribution margin $ 63,000 $ 62,000 $125,000
Less: Direct Fixed costs 7,200 6,700 13,900
Segment margin $ 55,800 $ 55,300 $ 111,100
Less: Common fixed costs 6,275 6,025 12,300
Net operating income (loss) $ 49,525 $ 49,275 $98,800
1. Incremental effect on profit if the POP product is eliminated is:
Profit will be reduced by $200 ($99,000 - $98,800), which is the difference between the allocated fixed cost to POP ($1,550) and its operating loss ($1,350).
2. Yes. MSI should drop the POP product. POP product is like a dog in the BCG matrix.
To report insights, researchers must combine their knowledge of business with their intimate knowledge of the research sponsor-manager gained while conducting the research.
A. True
B. False
Answer:
A. True
Explanation:
Any time you present a research report, you are combining your previous knowledge with new insights and knowledge gained while preparing the report. This applies to basically every type of new report that you prepare and even updates of prior reports. Sometimes the conditions change between the time the original report was made and the next periodic report.
The statement that researchers needs to add the knowledge of business as well as that of intimate research sponsor-manager to report insights is True.
Insights serves as the interpretations of raw data which contains some meaning in a particular context to the audience.As a researcher, that want to report an insight, there is a need to combine the knowledge gained from sponsor-manager and knowledge from business during the research.Therefore, the statement is True.
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Given the following information, calculate the funds from operation (FFO).
Net income: $1,200,000
Gain/losses from infrequent and unusual events: $0
Amortization of tenant improvements: $120,000
Amortization of leasing expenses: $75,000
Depreciation (real property): $2,675,000.
a. $195,000
b. $1,395,000
c. $2,870,000
d. $4,070,000
Answer:
Funds from Operations = 4070000
Explanation:
Use the below formula to find the fund from operations:
Funds from Operations = Net Income + Depreciation + Amortization - Gains on Sales of Property
Funds from Operations = 1200000 + 2675000 + 75000 + 120000
Funds from Operations = 4070000
Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a sole proprietorship. What is one advantage to Jeremy of setting up his business as a sole proprietorship
Complete Question:
a. As a sole proprietor, Jeremy would face limited liability.
b. As a sole proprietor, Jeremy would have both ownership and control over the business.
c. As a sole proprietor, Jeremy would have the ability to share risk with shareholders.
d. All of the above would be advantages of setting up his business as a sole proprietorship.
Answer:
b. As a sole proprietor, Jeremy would have both ownership and control over the business.
Explanation:
A sole proprietorship business is a type of business that is owned by a single person and as such their profits are taxed once as personal income tax. Thus, it is a type of business that is typically owned by an individual or one person and as a result, this single individual is solely responsible for its debts.
Generally, a major advantage of sole proprietorship is that the owner has an absolute control over the business and would be the only one to define how it's shall be run.
Hence, an advantage to Jeremy of setting up his business as a sole proprietorship is that he would have both ownership and control over the business.
A company has annual sales of $32,000 and accounts receivables of $2,200. The gross profit margin is 31.3%. The receivable days estimated from the data above is ______.
Answer: 80.17 days
Explanation:
The Receivable days estimated is calculated by the formula:
= Accounts receivable * 365 / (Annual sales * Gross profit margin)
= 2,200 * 365/ (32,000 * 31.3%)
= 2,200 * 0.03644169329
= 80.17 days
Canton Company sells a motor that carries a 60-day unconditional warranty against product failure. From prior years' experience, Canton estimates that 3% of units sold each period will require repair at an average cost of $160 per unit. During the current period, Canton sold 100,000 units and repaired 2,400 of those units. (a) How much warranty expense must Canton report in its cur
Answer:
$480,000
Explanation:
Calculation to determine much warranty expense must Canton report
Using this formula
Warranty expense=Average cost per unit*Unit sold*Estimated percentage of units sold
Let plug in the formula
Warranty expense= $160*100,000*3%
Warranty expense=$480,000
Therefore warranty expense that Canton must report is $480,000
You would use scenario analysis when:________.
a. Testing how an increase in revenue growth affects the share price
b. Performing what-if analysis to support business planning
c. Assessing which assumption has the biggest impact on the model
d. Comparing different business cases about the future with multiple variables changed
Answer:
d. Comparing different business cases about the future with multiple variables changed
Explanation:
I would start off by defining scenario analysis first. Scenario analysis can be defined as a process whereby future values of a portfolio investment can be predicted given that an event may occur or may not occur. In other words, it is a way of knowing what would happen to the values of a portfolio if a particular event occurs or if the event doesnt occur.
Given this explanation, the right answer to this question is option d, Comparing different business cases about the future with multiple variables changed
A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.75, price is $4.75, marginal revenue is $3.00, and marginal cost is $3.50. This firm is operating
Answer:
loss at the short run
Explanation:
marginal cost is higher than the marginal revenue
For Sanborn Co., sales is $1,000,000, fixed expenses are $300,000, and the contribution margin per unit is $60. What is the break-even point? g
Answer:
Break-even point in units= 5,000
Explanation:
Giving the following information:
Sales= $1,000,000
Fixed expenses= $300,000
Contribution margin per unit= $60
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 300,000 / 60
Break-even point in units= 5,000
Klean Fiber Company is the creator of Y-Go, a technology that weaves silver into its fabrics to kill bacteria and odor on clothing while managing heat. Y-Go has become very popular in undergarments for sports activities. Operating at capacity, the company can produce 1,053,000 Y-Go undergarments a year. The per unit and the total costs for an individual garment when the company operates at full capacity are as follows.
Per Undergarment Total
Direct materials $1.96 $2,063,880
Direct labor 0.47 494,910
Variable manufacturing overhead 0.98 1,031,940
Fixed manufacturing overhead 1.41 1,484,730
Variable selling expenses 0.38 400,140
Totals $5.20 $5,475,600
The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 249,700 Y-Go undergarments for soldiers in extremely warm climates. The Army would pay the unit cost for direct materials, direct labor, and variable manufacturing overhead costs. In addition, the Army has agreed to pay an additional $1.01 per undergarment to cover all other costs and provide a profit. Presently, Klean Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Klean Fiber accepts the Army’s offer, it will not incur any variable selling expenses related to this order.
Required:
Prepare an incremental analysis for the Klean Fiber.
Answer:
Klean Fiber Company
Incremental Analysis for the
Special order by the U.S. Army:
Units to be purchased = 249,700
Sales Revenue $4.42
Variable costs:
Direct materials $1.96
Direct labor 0.47
Variable manufacturing overhead 0.98
Total variable costs 3.41
Additional for contribution margin 1.01
Contribution margin = $252,197 ($1.01 * 249,700)
Explanation:
a) Data and Calculations:
Annual production capacity = 1,053,000
Per Undergarment Total
Direct materials $1.96 $2,063,880
Direct labor 0.47 494,910
Variable manufacturing overhead 0.98 1,031,940
Fixed manufacturing overhead 1.41 1,484,730
Variable selling expenses 0.38 400,140
Totals $5.20 $5,475,600
If the efficient market hypothesis is true, price changes are independent and biased. Group of answer choices
Answer:
Price changes are independent but not biased in efficient market hypothesis.
Explanation:
In simple words, the efficient-market hypothesis asserts that asset prices represent all relevant knowledge. Because market rates must only respond to fresh knowledge it is difficult to continuously "beat the market" on something like a risk-adjusted approach.
Thus the given statement is partially true.
Brinker accepts all major bank credit cards, including First Savings Bank's, which assesses a 5% charge on sales for using its card. On May 26, Brinker had $6,200 in First Savings Bank Card credit sales. What entry should Brinker make on May 26 to record the deposit
Answer:
Date Account titles and explanation Debit Credit
May 20 Cash ($6,200 - $310) $5,890
Credit card expenses ($6,200*5%) $310
Sales $6,200
(To record the deposit)
Innovative Consulting Co. has the following accounts in its ledger: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, Retained Earnings, Dividends, Fees Earned, Rent Expense, Advertising Expense, Utilities Expense, Miscellaneous Expense. Journalize the following selected transactions for October 20Y2 in a two-column journal. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank. Oct. 1. Paid rent for the month, $4,300. 3. Paid advertising expense, $2,750. 5. Paid cash for supplies, $1,180. 6. Purchased office equipment on account, $18,100. 12. Received cash from customers on account, $5,900. 20. Paid creditor on account, $1,730. 27. Paid cash for miscellaneous expenses, $750. 30. Paid telephone bill for the month, $280. 31. Fees earned and billed to customers for the month, $39,300. 31. Paid electricity bill for the month, $470. 31. Paid dividends, $3,000.
Answer:
Date Accounts title Debit$ Credit$
1-Oct Rent expense Account 4300
Cash account 4300
3-Oct Advertisement expense 2760
Cash account 2760
5-Oct Supplies Account 1180
Cash account 1180
6-Oct Office equipment Account 18100
Accounts payable 18100
10-Oct Cash account 5900
Accounts receivable 5900
15-Oct Accounts payable 1730
Cash account 1730
27-Oct Misc expense Account 750
Cash account 750
30-Oct Utility expense Account 280
Cash account 280
31-Oct Accounts receivable Account 39300
Service revenue 39300
31-Oct Utility expense Account 470
Cash account 470
31-Oct Jason payne, Drawings 3000
Cash account 3000
Zero-coupon risk-free bonds are available with the following maturities and yield rates (effective, annual):
Maturity(in years) Yield %
1 6
2 6.5
3 7
You need to buy corn for producing ethanol. You want to purchase 10,000 bushels one year from now, 15,000 bushels two years from now, and 20,000 bushels three years from now. The current forward prices, per bushel, are $3.89, $4.11, and $4.16 for one, two, and three years respectively. You want to enter into a commodity swap to lock in these prices. Which of the following sequences of payments at times one, two, and three will NOT be acceptable to you and to the corn supplier?
a. $38,900; $61,650; $83,200
b. $39,083; $61,650; $82,039
c. $40,777; $61,166; $81,554
d. $41,892; $62,340; $78,997
e. $60,184; $60,184; $60,184 73.2
Answer:
e. $60,184; $60,184; $60,184
Explanation:
Corn supplier will have yields of 6 in year 1 and 6.5 in year 2, if it will purchase bushels now he will have to pay $39,083 now or $38,900 2 years later. The corn supplier will not accept the price below this and we will not pay price above this. The Medicare price should be determined and set.
In a perpetual inventory system a.the inventory records cannot be computerized. b.the amount of inventory for sale and the amount sold are not listed in the inventory account. c.a count must be made in order to know the inventory amount. d.each purchase and sale of inventory is recorded in the inventory account.
Answer:
d. each purchase and sale of inventory is recorded in the inventory account.
Explanation:
In a perpetual inventory system we keep track of inventory balance and cost of sales whenever a sale or purchase transaction occurs. Under the perpetual inventory system, the firm always keeps updated inventory records.
what is gompertz function
Answer:
The Gompertz curve or Gompertz function is a type of mathematical model for a time series, named after Benjamin Gompertz (1779–1865). It is a sigmoid function which describes growth as being slowest at the start and end of a given time period. ... It is a special case of the generalised logistic function.
a company enters into a long futures contract to buy 4,000 barrels of oil for $62.50 per barrel. the initial margin is $62.50 x 4,000. what oil futures price will allow $2,000 to be withdrawn from the margin account
Answer:
For $2,000 to be withdrawn from the margin account, the oil futures price must be $62.
Explanation:
a) Data and Calculations:
Price of the long futures contract to buy 4,000 barrels of oil = $62.50 per barrel
Initial margin = $62.50 * 4,000
b) If the futures price is fixed at $62 per barrel and the initial margin per barrel already opened with a broker is $62.50, then the security investor can withdraw $2,000 ($0.50 * 4,000) from the margin account. This will result in an excess of $0.50 per barrel. Computationally, $0.50 * 4,000 = $2,000.
Critical Chain Project Management (CCPM) attempts to keep the most highly demanded resource busy on critical chain activities, but not overloaded.
a. True
b. False
Answer:
True
Explanation:
Critical-Chain
This was introduced or originated by Eli Goldratt in 1997. Its aim is to challenges conventional project management approaches and absolute dependence on TOC principles. The idea of what to change or eliminated is the largely rooted behaviors that is common with the traditional project management practices. It is very multitasking anf it is the longest string of reliance that occur on the project.
Critical- Chain Approach
This approach simply covers project network as it ca be limited by both resource and technical reliance/dependencies. each type of limitations can create task reliance.
The Summary of Critical Chain Approach
1.) use Aggressive but Possible Times (ABPT) for task durations
2.) identify the critical chain by accounting for resource dependencies
3.) use buffer management to track project progress etc.
Pina Colada Corp. does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $Unresolved. If the sales tax rate is 6%, what amount must be remitted to the state for February's sales taxes
Answer:
b. $2,616
Explanation:
Missing word "Total receipts for February amounted to $46216. If the sales tax rate is 6%, what amount must be remitted to the state for February's sales taxes? O $2773 O "$2616 O $2608 O It cannot be determined.
Sales tax = Total receipt * Tax rate
Sales tax = Total receipt * 6/106
Sales tax = $46,216 * 6/106
Sales tax = $2,616
So, the amount that must be remitted to the state for February's sales taxes is $2,616.
SpyingEyes, Inc., a large data intelligence company, has storage technology at multiple sites that store redundant data from its servers at the main office. What risk management strategies has the company primarily implemented?
Answer:
Avoid it risk management strategies
Explanation:
As the name suggests, In Avoid it risk management strategies the organisation takes every feasible step to stop any mismanagement from happening altogether. In other words, this strategy is based on strict monitoring and preparedness in advance.
Thus, from the above we can conclude that the above case illustrates avoid it risk management strategy.
Part E14 is used by M Corporation to make one of its products. A total of 19,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 4.10 Direct labor $ 8.70 Variable manufacturing overhead $ 9.20 Supervisor's salary $ 4.60 Depreciation of special equipment $ 3.00 Allocated general overhead $ 8.20 An outside supplier has offered to make the part and sell it to the company for $29.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part E14 could be used to make more of one of the company's other products, generating an additional segment margin of $31,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier should be:
Answer: ($24100)
Explanation:
The annual financial advantage (disadvantage) for the company goes thus:
The relevant cost to produce will be:
= ($4.10 × 19,000) + ($8.70 × 19,000) + ($9.20 × 19,000) + ($4.60 × 19,000) + $31,000
= $77900 + $165300 + $174800 + $87400 + $31000
= $536,400
The relevant costs to buy will be:
= 19,000 × $29.5
= $560,500
Since the relevant cost to buy is more than the relevant cost to produce, then the financial disadvantage will be:
= $560500 - $536,400
= $24,100
The answer is ($24,100)
Fortuna Company is preparing its statement of cash flows. Cash disbursements during the year included:
Answer: $100,000
Explanation:
Financing activities are those that relate with how the company finances its operations and includes cashflows related to equity and long term liability.
The financing activities outflows here total:
= Payment of dividends to stockholders
= $100,000
The two other cashflows are considered investing activities.
Task performance is defined as: Activities that transform raw materials into the goods and services that are produced by the organization. Activities that help with the transformation process by replenishing the supply of raw materials. A and B Offering help and cooperating with others.
Answer:
The correct option is A and B.
Explanation:
Task performance can be described as actions that convert raw materials into the goods and services which a company produces, as well as actions that aid in the conversion process by restocking raw materials, distributing finished products, or providing critical planning, supervising, staff functions, or coordination that promote effective and efficient functioning of the organization.
Based on the description above, the correct option is A and B. That is, task performance is defined as activities that transform raw materials into the goods and services that are produced by the organization, and activities that help with the transformation process by replenishing the supply of raw materials.
If the keyword an advertiser is bidding on is used in the ad and on the landing page, then the advertiser will receive a higher Quality Score for Group of answer choices higher expected CTR more positive landing page experiences by searchers lower bounce rate ad relevance
Answer:
If the keyword an advertiser is bidding on is used in the ad and on the landing page, then the advertiser will receive a higher Quality Score for
ad relevance.
Explanation:
Ad relevance is a component that gives an advertiser higher quality score. It is an indication that the keyword is optimized to meet the customer's search query. It shows how closely the ad matches the customer's search because a correlation exists between the keyword, the ad, and the post-click landing page. It is paramount to achieve ad relevance in any pay-per-click advertising (PPC), otherwise called search engine marketing (SEM) or search advertising, to justify the ad costs.
