The ____________________ problem is the main source of market failure in the provision of nonexcludable public goods.

Answers

Answer 1

Answer: Free Rider

Explanation:

Non-excludable goods refers to public goods that are free to the public to use such goods and therefore there is no restriction to the  consumption of non-excludable goods because every single individual  has the right to access and consume it  For example,  Public parks, roads, and public infrastructures.

A non excludable good can overtime have a negative result in a community, because such good need to be constantly maintained so as to continue to be beneficial and  therefore may require small token of fair share among its consumers but there would always be some individuals who are referred to as Free Riders  who would rather use the good without paying for it and in the long run cause the good to not be adequate for all or difficult  to be maintained at its best resulting to failure in the provision of the non excludable public goods.

the free rider problem can be solved by

1. Government's intervention to subsidize the public good through fair distribution of tax, using the pay as you earn method .

2. Overused non excludable good can be privatized, ensuring that people who consume it, contribute to ts maintenance.


Related Questions

Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $410,000. In addition to the purchase price, FVI makes the following expenditures related to the acquisition: broker's commission, $21,000; title insurance, $1,100; and miscellaneous closing costs, $4,200. The warehouse is immediately demolished at a cost of $21,000 in anticipation of building a new warehouse. Determine the amount FVI should record as the cost of the land.

Answers

Answer:

$457,300

Explanation:

FVI purchased a land and warehouse at the cost of $410,000

The following expenditures were incurred

Broker's commission = $21,000

Title insurance= $1,100

Miscellaneous closing costs= $4,200

Demolition of the warehouse= $21,000

Therefore, the amount in which FVI should record as cost of the land can be calculated as follows

=$410,000+$21,000+$1,100+$4,200+$21,000

= $457,300

Hence the amount that FVI should record as the cost of the land is $457,300

If the cost of labor decreases the isocost line will A. stay the same. B. shift inward in parallel fashion. C. rotate outward around the point where only capital is employed in production. D. shift outward in parallel fashion.

Answers

Answer:

C. rotate outward around the point where only capital is employed in production.

Explanation:

As a long-term investment at the beginning of the 2018 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.'s 10 million shares for $58 million. The fair value and book value of the shares were the same at that time. During the year, Nursery Supplies earned net income of $30 million and distributed cash dividends of $3.00 per share. At the end of the year, the fair value of the shares is $54 million.

Required:
Prepare the appropriate journal entries from the purchase through the end of the year.

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. Investment in Nursery supplies shares Dr, $58 million

             To Cash $58 million

(Being purchase of shares is recorded)

2. Investment in Nursery supplies shares Dr, $9 million

            To Investment revenue $9 million ($30 million × 30%)

(Being investment revenue is recorded)

3. Cash Dr, $9 million

             To Investment in Nursery supplies shares $9 million

(30% × 10 million × $3.00)

(Being a  cash dividend is recorded)

4. No Journal entry is required

Piper's Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and depreciation through the date of sale totaled $51,000. What was the gain or loss on the sale of the equipment?
Sale amount
Less:
Cost of the baking equipment
Book value

Answers

Answer:

$4,000 gain

Explanation:

The calculation of gain or loss on the sale of the equipment is shown below:-

Gain or loss on the sale of the equipment = Sales - Cost of the baking equipment - Accumulated Depreciation

= $25,000 - ($72,000 - $51,000)

= $25,000 - $21,000

= $4,000

Therefore for computing the gain or sale we simply applied the above formula.

f the nominal interest rate is 7 percent and the real interest rate "is -2.5" percent, then the inflation rate is

Answers

Answer:

9.7%

Explanation:

(1 + nominal interest rate) = (1 + real rate) x (1 + inflation rate)

1.07 = 0.975 x (1 + inflation rate)

(1 + inflation rate) = 1.07 / 0.975

(1 + inflation rate) = 1.097

Inflation rate = 1.097 - 1 = 0.097 = 9.7%

A stock had returns of 17.88 percent, −5.16 percent, and 20.39 percent for the past three years. What is the variance of the returns?

Answers

Answer:

Variance of the return = 0.01983

Explanation:

[tex]S^{2}[/tex]= Σ[tex](X-X)^{2}[/tex]/ N - 1

Mean return = 17.88% + -5.16% + 20.39% = 11.0367%  

Variance = [(17.88% - 11.0367%)2 + (-5.16% - 11.0367%)2 + (20.39% - 11.0367%)2] /(3 - 1)

Variance = [0.004683 + 0.026233 + 0.008748]/2

Variance = 0.01983

g The company plans a 4-for-1 stock split. How many shares will you own and what will the share price be after the stock split?

Answers

Answer: 14,400; $17

Explanation:

Stock splits are a strategy by firms to increase the liquidity of their shares especially when they are trading at a high price. The firm divides the stock by a certain number thus increasing the number of shares by the multiple of the number. This action will divide the price of the stock and thus allow for more trade as they are cheaper.

A 4-for- stock split means that each share will become 4.

Your total number of share will become;

= 4 * 3,600

= 14,400 shares

The new price will be;

= 68/4

= $17 per share

One of the necessary conditions for a contestable market is that new firms entering the market have a cost advantage over the existing firms.
A. True
B. False

Answers

Answer: False

Explanation:

A contestable market is a market whereby there is entry and exit for the companies and such companies usually have low sunk costs. Such companies have access to same technology and skills.

Therefore, the conditions for a contestable market that new firms entering the market have a cost advantage over the existing firms is not true.

Grasshopper Lawn Service provides general lawn maintenance to customers. The company’s fiscal year-end is December 31. Information necessary to prepare the year-end adjusting entries appears below.
On October 1, 2021, Grasshopper lent $110,000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2022.
On November 1, 2021, the company paid its landlord $22,500 representing rent for the months of November through January. Prepaid Rent was debited for the entire amount.
On August 1, 2021, Grasshopper collected $27,000 in advance rent from another company that is renting a portion of Grasshopper’s building. The $27,000 represents one year’s rent, and the entire amount was credited to Deferred Revenue.
Depreciation for the year is $23,000.
Vacation pay for the year that had been earned by employees but not paid to them or recorded is $13,000. The company records vacation pay as Salaries Expense.
Grasshopper began the year with $27,000 in its Supplies account. During the year $67,000 in supplies were purchased and debited to the Supplies account. At year-end,supplies costing $27,000 remain on hand.
Required:
Prepare the necessary adjusting entries on December 31, 2021.

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. Interest receivable $2,200 ($110,000 × 8% × 3 ÷ 12)

             To Interest income $2,200

(Being interest income accrued is recorded)

2. Rent expense Dr, $15,000 ($22,500 × 2 ÷ 3)

               To Prepaid rent $15,000

(Being expiry of prepaid rent is recorded)

3. Deferred revenue Dr, $11,250    (27000 × 5 ÷ 12)

           To Rent income $11,250

(Being rental income earned is recorded)

4. Depreciation expense Dr, $23,000

         To Accumulated depreciation $23,000

(Being depreciation expense is recorded)

5. Salaries expense Dr, $13,000

           To Salaries payable $13,000

(Being accrued vacation pay is recorded)

6. Supplies expense Dr, $67,000 ($27,000 + $67,000 - $27,000)

        To Supplies $67,000

(Being supplies used is recorded)

The preparation of the year-end adjusting entries for Grashopper Lawn Services is as follows:

Adjusting Journal Entries:

Debit Interest Receivable $2,200

Credit Interest Revenue $2,200

Debit Rent Expense $15,000

Credit Prepaid Rent $15,000

Debit Deferred Revenue $11,250

Credit Rent Revenue $11,250

Debit Depreciation Expense $23,000

Credit Accumulated Depreciation $23,000

Debit Salaries Expense $13,000

Credit Vacation Payable $13,000

Debit Supplies Expenses $67,000

Credit Supplies $67,000

Data Analysis:

Interest Receivable $2,200 Interest Revenue $2,200

($110,000 x 8% x 3/12)

Rent Expense $15,000 Prepaid Rent $15,000

($22,500 x 2/3)

Deferred Revenue $11,250 Rent Revenue $11,250

($27,000 x 5/12)

Depreciation Expense $23,000 Accumulated Depreciation $23,000

Salaries Expense $13,000 Vacation Payable $13,000

Supplies Expenses $67,000 Supplies $67,000

Learn more about preparing adjusting entries at https://brainly.com/question/13933471

If accounting profits for a firm are 20% of output, and the opportunity cost of financial capital is 8% of output, then what do the firm's economic profits equal

Answers

Answer: 12%

Explanation:

The Economic profits for a firm refers to the revenue received less all implicit and explicit costs.

The implicit costs would be all the costs associated with the inputs into the goods sold and explicit costs will be the opportunity cost.

Accounting profits already account for implicit costs so the formula for Economic profit is;

= Accounting profit - Opportunity cost

= 20% - 8%

= 12%

Based on the information given the firm's economic profits equal 12%  of output.

Economic profit:

Using this formula

Economic profit=Accounting profit - Opportunity cost

Where:

Accounting profit=20%

Opportunity cos=8%

Let plug in the formula

Economic profit= 20% - 8%

Economic profit= 12%

Inconclusion the firm's economic profits equal 12%  of output.

Learn more about economic profit here:https://brainly.com/question/8960234

Currently Baldwin is paying a dividend of $1.10 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield

Answers

Answer:

Dividend yield = 227.06%

Explanation:

Assuming the Closing stock market summary for Baldwin company is $44.05

Dividend yield = Dividend * 100 / (Price* (1 + growth rate) )

Dividend yield = 1.10 * 100 / (44.05 * (1+0.10) )

Dividend yield = 1.10 * 100 / (44.05 * 1.10)

Dividend yield = 110 / 48.455

Dividend yield = 2.2706

Dividend yield = 227.06%

Union Local School District has bonds outstanding with a coupon rate of 4.5 percent paid semiannually and 20 years to maturity. The yield to maturity on these bonds is 3.8 percent and the bonds have a par value of $10,000. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

Answer:

$10,974.45

Explanation:

coupon rate 4.5%, semiannual = 2.25%

20 years until maturity = 40 periods

market rate 3.8%, semiannual = 1.9%

par value $10,000

market price of the bonds = PV of par value + PV of coupon payments

PV of par value = $10,000 / (1 + 1.9%)⁴⁰ = $4,710.13

PV of coupon payments = $225 x 27.84144 (PV annuity factor, 1.9%, 40 periods) = $6,264.32

market value = $4,710.13 + $6,264.32 = $10,974.45

Answer:

The dollar price of the bond is $10,974.45.

Explanation:

The dollar price of the bond, PV, can be determined as follows :

N = 20 × 2 = 40

PMT = ($10,000 × 4.5%) ÷ 2 = $225

P/YR = 2

YTM = 3.80 %

FV = $10,000

PV = ?

Using a Financial Calculator, the dollar price of the bond, PV is $10,974.45.

Morrison Corporation had the following common stock record during the current calendar year: Outstanding-January 1 2,000,000 Additional shares issued 3/31 100,000 Distributed a 10% stock dividend on 6/30 Additional shares issued 9/30 100,000 What is the number of shares to be used in computing basic EPS

Answers

Answer:

the number of shares to be used in computing basic EPS is 2,100,000.

Explanation:

Basic Earnings Per Share = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stocks

Weighted Average Number of Common Stocks Calculation :

Common Stocks Outstanding on 1 January         2,000,000

Additional Shares 9/12 × 100,000                              75,000

Additional Shares 3/12 × 100,000                              25,000

Weighted Average Number of Common Stocks 2,100,000

Using the tables above, if an investment is made now for $17,550 that will generate a cash inflow of $5,850 a year for the next four years, what would be the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%

Answers

Answer:

$993.71

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  

Cash flow in year 0 = $-17,550

Cash flow each year from year 1 to 4 = $5,850

I = 10%

NPV = $993.71

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  

Sally Eason put $4,000 in her deductible IRA this year. If Sally is in the 25 percent marginal tax bracket, the government actually contributed ____ of that amount for her. Group of answer choices

Answers

Answer: $1000

Explanation:

From the question, we are informed that Sally Eason put $4,000 in her deductible IRA this year and that Sally is in the 25 percent marginal tax bracket.

Based on the above information, the government contributed:

= 25% × $4,000

= 25/100 × $4,000

= 0.25 × $4,000

= $1000

Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Smiley issued $6,200,000 of 9-year, 9% bonds at a market (effective) interest rate of 6%, receiving cash of $7,479,078. Interest is payable semiannually on April 1 and October 1.

a. Journalize the entry to record the issuance of bonds on April 1, Year 1. If an amount box does not require an entry, leave it blank.

b. Journalize the entry to record the first interest payment on October 1, Year 1, and amortization of bond premium for six months, using the straight-line method. (Round to the nearest dollar.) For a compound transaction, if an amount box does not require an entry, leave it blank.

c. Why was the company able to issue the bonds for $20,811,010 rather than for the face amount of $20,000,000?

Answers

Answer:

All requirements are solved below

Explanation:

Requirement A: Entry to record the issuance of a bond on April 1 year 1

                                                     DEBIT           CREDIT

Entry

Cash                                       $7,479,078  

Bonds payable                                              $6,200,000  

Premium on Bonds payable                          $1,279,078

Requirement B: Entry to record the first interest payment on October 1 Year 1

                                                        DEBIT           CREDIT

Entry

interest expense                          $207940  

Premium on Bonds payable(w)    $71,060  

Cash(w)                                                                $279,000

Working

Cash = $6,200,000 x 9% x 6/12

Cash = 279000

Premium = ($1,279,078/9years ) x 6/12

Premium = $71,060

Requirement C: Why was the company able to issue the bonds for $7,479,078 rather than for the face amount of $6,200,000  

Answer: The company was able to issue the bonds for $7,479,078 rather than $6,200,000  because the market rate of interest is less than the contract rate of interest.

n the cash flow information for the Ping Kings project, Ping spent $300,000 for research and development of the golf clubs. Ping's tax rate is 40%. How much of this cost should be included in the initial (t = 0) cash flow for this project

Answers

Answer: C. $0

Explanation:

When including initial costs in a project's cash-flow, the relevant costs are those that henceforth will be spent on the project. Sunk costs are not to be included because they have already been incurred and cannot be recovered.

Research and Development costs have already been incurred and so are sunk costs. Hence they are not to be included in the initial cash-flow for the project.

The amount of the cost that should be included in the initial (t = 0) cash flow for Ping Kings' Project is D. $300,000.

This is a cash outlay (outflow).  It bears a negative value.  The initial cash flow cannot be $120,000, $180,000, or $0 because of Ping's tax rate of 40%. Under the FASB, Research and Development costs are capitalized.

Secondly, tax is not applied on capital investment but its net income.

Options for this question include:

A. $120,000

B. $180,000

C. $0

D. $300,000

Learn more: https://brainly.com/question/18958117

According to the lecture video on building dynamic charts, which of the following Excel functions are used in the "Refers to:" formula in Name Manager?
A) SUMIF
B) COUNTIF
C) OFFSET
D) COUNT

Answers

Answer:

OFFSET

COUNT

Explanation:

two options are correct, select both.

Answer:

Option C  and D are correct

Explanation:

OFFSET - From a cell or a range of cells, returns a reference to a range with a specified number of rows and columns.

COUNT - To determine the number of entries in a number field that is part of a range or array of values, use the COUNT function.

A large firm in the newspaper industry employs 250 people, of which 32 are upper-level managers. As a result of this employee-to-manager ratio, the firm experiences 12.8% reduced productivity. At the same time, a small firm with 65 employees and 4 upper-level managers experiences 6.2% reduced productivity.
If everything else is constant, what can we say about the cost structure in this industry over this range of production?
A. The firms in this industry have economies of scale.
B. The firms in this industry have constant returns to scale.
C. The firms in this industry have diseconomies of scale.

Answers

Answer:

C. The firms in this industry have diseconomies of scale.

Explanation:

Diseconomies of scale arise when the business expands so its cost per unit rises at the time when the output is also increased so ultimately the cost is also increased

in this, the firm experience excessive average cost that result in lower productivity as compared before when there is an increase in output

Therefore according to the given situation, the third option is correct as it fits  the given scenario

Busch Company has these obligations at December 31. For each obligation, indicate whether it should be classified as a current liability, long-term liability, or both. (a) A note payable for $100,000 due in 2 years. select a balance sheet section (b) A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments. select a balance sheet section (c) Interest payable of $15,000 on the mortgage. select a balance sheet section (d) Accounts payable of $60,000. select a balance sheet section

Answers

Answer:

Busch Company

Indication of whether the obligation be classified as a current liability, long-term liability, or both:

(a) A note payable for $100,000 due in 2 years. Long-term Liability

(b) A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments.   Both.

Every year, $20,000 would be classified as Current Liability while the remaining balance is long-term liabilities.

(c) Interest payable of $15,000 on the mortgage. Both

If the interest payable is to be settled at the end of the mortgage, then it is classified as only long-term.

(d) Accounts payable of $60,000. Current Liability

Explanation:

Busch's current liabilities are financial obligations that are due for settlement within the next accounting period of 12 months or less.

The long-term liabilities of Busch Company are those financial obligations that are not due for settlement within the next accounting period.

For some long-term liabilities, Busch may settle some part within 12 months.  That part that can be settled within the accounting period are classified as current while the other parts are non-current.

On January​ 1, 2018, Waller Sales issued in bonds for . These are eightyear bonds with a stated rate of ​%, and pay semiannual interest. Waller Sales uses the straightline method to amortize the bond discount. After the second interest payment on December​ 31, 2018, what is the bond carrying​ amount? (Round your intermediate answers to the nearest​ cent, and your final answer to the nearest​ dollar.)

Answers

Answer:

Carrying value December 31, 2018 = $24,137.50

Explanation:

the numbers are missing, so I looked for a similar question to fill in the blanks:

Waller Sales issued $30,000 in bonds for $23,300. These are eight-year bonds with a stated rate of 11%

The journal entry to record the issuance of the bonds:

January 1, 2018, bonds are issued at a discount:

Dr Cash 23,300

Dr Discount on bonds payable 6,700

    Cr Bonds payable 30,000

discount amortization = $6,700 / 16 coupons = $418.75 per coupon payment

First and second coupon payments:

June 30 (or December 31), 2018, coupon payments

Dr Interest expense 3,718.75

    Cr Cash 3,300

    Cr Discount on bonds payable 418.75

Carrying value June 30, 2018 = $23,300 + $418.75 = $23,718.75

Carrying value December 31, 2018 = $23,300 + $418.75 = $24,137.50

Anna hired Juan to act as her sales agent in her auto dealership. However, Anna has instructed Juan not to enter into any sales contracts before she has had a chance to review the transaction. One day, Juan entered into a sales contract with William without informing Anna first. Has Juan created a contract with William that is binding on Anna in this situation?

Answers

Answer:

Yes, Juan did have apparent authority to act.

Explanation:

In the situation that is being described it can be said that Yes, Juan did have apparent authority to act. Even though Anna has asked Juan to let her review the transaction before entering into a contract, she gave Juan the authority to act on her behalf and represent her as an authority in the auto dealership when she made him a sales agent. Therefore any and all contracts entered by Juan in the dealership are binding on Anna as well.

llinois​ Furniture, Inc., produces all types of office furniture. The​ "Executive Secretary" is a chair that has been designed using ergonomics to provide comfort during long work hours. The chair sells for​ $130. There are 480 minutes available during the​ day, and the average daily demand has been 48 chairs. There are eight​ tasks:

Answers

Answer:

The tasks A and B will be performed together, then C, D and E will be performed one by one and then F and G will be performed to enable the final task H which will be performed last.

Total task time is 49 mins

=  4 + 7 + 6 + 5 + 6 + 7 + 8 + 6  

=49 mins.

Cycle time is 10 min per chair

Production time available per day divided by units required per day

480 minutes / 50 chairs

= 10 mins per chair.

Minimum number of workstation

49 mins / 10 mins = 5 workstations

Explanation:

The tasks A and B will be performed together, then C, D and E will be performed one by one and then F and G will be performed to enable the final task H which will be performed last.

Total task time is 49 mins

=  4 + 7 + 6 + 5 + 6 + 7 + 8 + 6  

=49 mins.

Cycle time is 10 min per chair

Production time available per day divided by units required per day

480 minutes / 50 chairs

= 10 mins per chair.

Minimum number of workstation

49 mins / 10 mins = 5 workstations

Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018. Common stock—$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding $ 400,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 460,000 Total stockholders' equity $ 920,000 During 2019, the following transactions affected its stockholders’ equity accounts. Jan. 2 Purchased 4,500 shares of its own stock at $25 cash per share. Jan. 5 Directors declared a $2 per share cash dividend payable on February 28 to the February 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 Sold 1,688 of its treasury shares at $29 cash per share. Required: 1. Prepare journal entries to record each of these transactions.

Answers

Answer:

Kohler Corporation

Journal Entries:

Jan. 2:

Debit Treasury Stock $45,000

Debit Paid-in Capital In Excess of Par $67,500

Credit Cash Account $112,500

To record the purchase of 4,500 shares of its own stock at $25 per share.

Jan. 5:

Debit Dividends $71,000

Credit Dividends Payable $71,000

To record the declaration of $2 per share cash dividend.

Feb. 28:

Debit Dividends Payable $71,000

Credit Cash Account $71,000

To record the payment of cash dividend on 35,500 shares at $2 per share.

July 6:

Debit Cash Account $48,952

Credit Treasury Stock $16,880

Credit Paid-in Capital In Excess of Par $32,072

To record the sale of treasury stock shares at $29 per share.

Explanation:

a) Data and Calculations:

Common stock—$10 par value, 100,000 shares authorized,

40,000 shares issued and outstanding $ 400,000

Paid-in capital in excess of par value,

common stock                                             60,000

Retained earnings                                      460,000

Total stockholders' equity                      $ 920,000

b) The purchase on Jan. 2 of its own stock of 4,500 shares, the cash receipt is credited to the Cash Account while the Treasury Stock is debited, but only with the par value of the repurchased shares if the par value method is adopted.  If the costing method is adopted, the value to be debited to the Treasury Stock account would have $112,500 without any debit to the Paid-in Capital In Excess of Par.  This is also followed when the sale of 1,688 treasury shares at $29 per share takes place on July 6, but with opposite entries.

c) To compute the dividend payable, the treasury stock shares of 4,500 are deducted from the outstanding shares of 40,000.  This means that the shareholders of record have shares outstanding totalling 35,500 (40,000 - 4,500).

d) The general journal is used in these cases to record the transactions initially in the books of Kohler Corporation.  They show the accounts to be debited and the others to be credited, since two accounts or more are usually involved in any business transaction.

Where can you go in the Banking Center to review downloaded bank feed transactions that have already been matched to existing transactions in QuickBooks Online?a. For Review tabb. Reviewed tabc. Recognized tab d. Excluded tab

Answers

Answer:

Where can you go in the Banking Center to review downloaded bank feed transactions that have already been matched to existing transactions in QuickBooks Online?

a. For Reviewed tab

Explanation:

In QuickBooks online, you have the Reviewed tab where you can download at least the last 90 days of transactions, made with your bank or credit card. QuickBooks is also able to categorize all the downloaded transactions you have done. In the reviewed tab you can find all the accepted bank transactions.

Calgary Lumber Company incurs a cost of $315 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $440 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $465 per hbf, which can be sold for $600 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

Answers

Answer:

Calgary Lumber Company

Differential Analysis dated March 15:

                                     Alternative 1                   Alternative 2

                                Sell rough-cut Lumber     Process to finished-cut

Sales                             $440                                  $600

Cost of processing         315                                     465

Profit                             $125                                    $135

Choose Alternative 2.

Explanation:

Calgary Lumber Company's differential analysis is a tool that its management can use to decide the alternative to pursue by examining the differences in the outcomes of two or more alternative actions.  From the analysis done between the two alternatives open to Calgary, it appears that the second alternative will yield a higher profit of $135 instead of alternative 1's profit of $125.  There is a differential profit of $10 per hundred board feet to be made if Calgary Lumber Company pursues alternative 2 instead of alternative 1.

Discuss three major factors that contribute to an employee's decision to join a union. Discuss the five reasons that have contributed to the trend of decline in unionization g

Answers

Answer:

The answer is below

Explanation:

Three major factors that contribute to an employee's decision to join a union.

1. Greater Bargaining Power

As an individual employee, it can be difficult to negotiate for wage increase or better working condition generally. However, being a member Union, together the group can negotiate and demand for what they feel is right for their members. In a rare occasion, the threat of a strike by a Union is a great tool to bargain well with the employer.

2. Minimize Discrimination

As a Union, it is easier to demand for equality in terms of wage, working condition, promotion, leave etc. Unlike individual employee, who may be facing discrimination from his or her supervisor as to employee related issue. Union can ensure the management used the right policies that seek for equality among all its employees without favoritism or discrimination.

3. Sense of Security

An employee may join the Union on the basis that, Union can save them against abrupt dismissal or other types of work insecurities including accident, injury, illness etc.

Also, Union can help secure retirement benefits and ensure the management improve on the employees' welfare generally.

Five reasons that have contributed to the trend of decline in unionization

1. Irrelevance appearance of the Union:

Many workers believe that Union is not necessary because in the time of economic boom, getting wage increase and other working benefits can be gotten be individual employee and not necessarily through a Union, and at the same time, during economic downturn, unions often times don't have the capacity to protect their members from layoffs, wage and benefit reductions and tougher working conditions.

2. Poor Image of the Union:

Many employers and employees tend to view union with negativity, in the sense that, often times, their demands can be unreasonable, and are characterized by issue of labor racketeering, mob influence and embezzlement.

3. Unions are Seen as Political:

For some employees, they believe that Union tend to use their money or Union dues to support a political candidate. This in turn has made some employees who are neutral, not wanting to join the Union.

4. Reliance on goverment:

Many employees now believe that, government, not Union gives better form of security and voice to air their opinions. These includes pensions, healthcare, protection.

5. Global competition and deregulation in Unionized industries:

Since most of the companies or industries that have union has been deregulated, this has increased its competition, there by, making the need for union not really necessary, because with or without Union, one may still faces sack.

Kathy fields wants to buy a condominium selling for $95,000. The bank is requiring 20% down and is charging 9.5% interest for a 25 year loan. determine the amount required down payment and the amount of the monthly payment for the principal and interest.

Answers

Answer:

The down payment is 19000 and monthly payment is 664.009

Explanation:

The purchase price of condominium = $95000

Down payment = 20%

Interest charged  = 9.5 %

Time period = 25 years

Down payment amount =  95000 × 20% = 19000

Remaining loan amount = $76000

Below is the calculation of monthly payment:

[tex]\text{Present vlaue of annuity} =\frac{A(1-(1+r)^{-n})}{r} \\A = monthy \ installment \\76000 = \frac{A(1-(1+ 0.095/12)^{-25\times 12})}{ 0.095/12} \\A(0.906112) = 601.667 \\A = 664.009[/tex]

In its most recent annual report, Appalachian Beverages reported current assets of $70,300 and a current ratio of 1.90. Assume that the following transactions were completed:_________.
(1) purchased merchandise for $6,700 on account and (2) purchased a delivery truck for $10,000, paying $2,000 cash and signing a two-year promissory note for the balance.
Compute the updated current ratio (round answers to 2 decimal places)Transaction (1) ________________Transaction (2) ________________I am not sure how to do this problem, I understand how to general compute the current ration:________.Current raion= currenct assets/current liabilitiesbut how do you do compute an update?If someone could show me how to do this correctly, I will award them lifesaver.

Answers

Answer:

Appalachian Beverages

With reported current assets of $70,300 and a current ratio of 1.90, one can work out the current liabilities from these two.  The current liabilities are equal to $70,300/1.90 - $37,000.  To work back, one can state that current ratio equals $70,300/$37,000 = 1.90.

Having ascertained the value of the former current liabilities, one can use the information to update the two parameters for calculating the current ratio as follows:

Current liabilities increased by $6,700 from purchase of merchandise on account and of a delivery truck by $8,000.  So, the updated current liabilities equal to $37,000 + 6,700 + 8,000 = $51,700.  Similarly, the current assets decreased by $2,000 for the part-payment for the delivery truck.  Thus, current assets are now equal to $68,300 ($70,300 - 2,000).

Having updated the two parameters, one can then compute the updated current ratio as follows:

Current ratio = current assets/current liabilities = $68,300/$51,700 = 1.32.

Explanation:

Appalachian Beverages' current ratio shows the relationship between current assets and current liabilities and the ability of the entity to settle current liabilities with current assets.

Airborne Airlines Inc. has a $1,000 par value bond outstanding with 10 years to maturity. The bond carries an annual interest payment of $90 and is currently selling for $960. Airborne is in a 20 percent tax bracket. The firm wishes to know what the aftertax cost of a new bond issue is likely to be. The yield to maturity on the new issue will be the same as the yield to maturity on the old issue because the risk and maturity date will be similar.

Required:
a. Compute the yield to maturity on the old issue and use this as the yield for the new issue.
b. Make the appropriate tax adjustment to determine the aftertax cost of debt.

Answers

Answer:Yield to maturity is 9.59%;  After tax cost of debt =7.672%

Explanation:

 A)   Yield to maturity ={ C + (FV-PV)/t} /  {(FV +PV)/2}

Where C – Interest payment    = $90

FV – Face value of the security

= $1000

PV – Present value/curent market value = $960

t – years it takes the security to reach maturity= 10 years

imputing the values and calculating,

yield to maturity ={ C + (FV-PV)/t} /  {(FV +PV)/2}

= $90 + (1000-960)/10} / 1000 + 960 /2

$90 + 4= $94 /980= 0.0959

therefore Yield to maturity is 9.59%

B)   After tax cost of debt =    Yield To Maturity  x (1 - tax rate)

=9.59% x (1-20%)= 9.59% x (1-0.2 )= 9.59% x 0.8 =

9.59 % x 80%=7.672%

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