Answer:
d. $970.36
Explanation:
The market price of the bond (Pv) can be calculated as follows :
Pmt = ($1,000 × 6.5%) ÷ 2 = $32.50
P/yr = 2
i = 6.99%
n = 8 × 2 = 16
Fv = $1,000
Pv = ?
Using a Financial calculator to enter the values as above, the market price of the bond (Pv) is $970.3583 or $970.36.
Smith lives in a world with two time periods: current period and future period. His income in each period is $10,000. A) Draw his intertemporal budget constraint when the interest rate is 33%. B) If Smith consumes $10,000 in each period, show his best affordable bundle and the indifference curve that passes through it. C) Graphically show how Smith's current consumption changes when the interest rate falls to 0%.
Answer and Explanation:
Answer and explanation attached
Haskell Corp. is comparing two different capital structures. Plan I would result in 12,000 shares of stock and $100,000 in debt. Plan II would result in 8,700 shares of stock and $155,000 in debt. The interest rate on the debt is 5 percent. Compare both of these plans to an all-equity plan assuming that EBIT will be $80,000. The all-equity plan would result in 18,000 shares of stock outstanding. Assuming that the corporate tax rate is 40 percent, what is the EPS for each of these plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Assuming that the corporate tax rate is 40 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)
Answer:
Please find attached detailed solution to the above question.
Explanation:
Please as attached detailed solution.
An office building with an adjusted basis of $320,000 was destroyed by fire on December 30, 2020. On January 11, 2021, the insurance company paid the owner $450,000. The fair market value of the building was $500,000, but under the co-insurance clause, the insurance company is responsible for only 90 percent of the loss. The owner reinvested $410,000 in a new office building on February 12, 2021, that was smaller than the original office building. What is the recognized gain and the basis of the new building if § 1033 (nonrecognition of gain from an involuntary conversion) is elected?
Answer:
Recognized gain or loss = $40,000
Basis of the new building = $320,000
Explanation:
Total gain = Insurance Claim - Adjusted Basis of destroyed Building
Total gain = $450,000-$320,000 = $130,000
if Section 1033 (nonrecognition of gain from an involuntary conversion) is elected
Recognized Gain = Insurance Claim – the Greater of Replacement Cost or the Adjusted Basis of Building
Recognized gain or loss = $450,000-$410,000
Recognized gain or loss = $40,000
Deferred Gain = Total gain - Recognized gain or loss
Deferred Gain= $130,000-$40,000
Deferred Gain = $90,000
Basis of the new building if Section 1033 (nonrecognition of gain from an involuntary conversion) is elected
Basis of the new building = Investment - Deferred Gain
Basis of the new building = $410,000 - $90,000
Basis of the new building = $320,000
Which kind of monetary policy would you expect in response to high inflation:
a. Expansionary
b. Contractionary
Answer:
B. Contractionary Monetary Policy
Explanation:
According to Investopedia, inflation is a quantitative measure of the rate at which average price level of selected goods and services in an economy increases over a period of time which causes the purchasing power of the currency to fall.
One popular method of controlling high inflation is the Contractionary Monetary Policy. The aim of the contractionary monetary policy is to cut the supply of money within an economy by decreasing bond prices and increasing interest rates through the central bank.
When the Central Bank increases their interests rates, banks become forced to increase their rates as well which discourages consumers from borrowing and makes saving more attractive.
These help to cut down spending, causes prices of goods and services to drop and consequently causes inflation to slow down.
Crispy Breakfast places a coupon in each box of its cereal product. Customers may send in five coupons and $3, and the company will send them a recipe book. Sufficient books were purchased at a cost of $5 each. A total of 500,000 boxes of product were sold in the current year. It was estimated that 4% of the coupons would be redeemed. During current year, 9,000 coupons were redeemed. What is Crispy's premium expense for 2013
Answer:
$8,000
Explanation:
premium expense = [(500,000 x 4%) / 5] x ($5 - $3) = 4,000 x $2 = $8,000
the journal entry to record this:
Dr Premium expense 8,000
Cr Estimated premium claims outstanding 8,000
Since the customers must send 5 coupons + $3 in order to get the free recipe book, the actual cost per recipe book = $5 - $3 = $2 per book
in total, the company estimates that 20,000 coupons will be redeemed, but you need 5 coupons per book, so that mean that 4,000 recipe books are expected to be handed out.
Hunter is the founder and CEO of a Web site development firm. Clients are typically small to midsized companies that are seeking an offbeat, innovative approach to their online design, as well as functionality that offers customers surprising ways to interact with the site. What is the more appropriate style of leadership, given the type of work Hunter wants his Web site designers to do
Answer:
The right solution would be "Transformational ".
Explanation:
The required leadership style throughout this situation, considering the sort of job Hunter requires his application or website developers or designers to be doing, is Transformative. The objective was to design or create an unexpected as well as creative approach is to develop or construct various websites.During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be ________. Prepare all necessary journal entries.
Answer:
the journal entry to record bad debt expense should be:
December 31, 202x, allowance for uncollectible accounts
Dr Bad debt expense 550
Cr Allowance for bad debts 550
The balance of the allowance for bad debts (uncollectible accounts) is $550.
Explanation:
Accounts receivable
debit credit
800,000
760,000
18,000
22,000
550
21,450
$22,000 x 2.5% = $550
When accounts were written off, the journal entry was:
Dr Bad debt expense 18,000
Cr Accounts receivable 18,000
Crimson Inc. recorded credit sales of $797,000, of which $540,000 is not yet due, $170,000 is past due for up to 180 days, and $87,000 is past due for more than 180 days. Under the aging of receivables method, Crimson Inc. expects it will not collect 2% of the amount not yet due, 16% of the amount past due for up to 180 days, and 27% of the amount past due for more than 180 days. The allowance account had a debit balance of $3,800 before adjustment. After adjusting for bad debt expense, what is the ending balance of the allowance account
Answer:
$65,290
Explanation:
The computation of the ending balance of the allowance account is shown below:-
Bad Debts for accounts receivable not yet due is
= $540,000 × 0.02
= $10,800
Bad Debts for accounts receivable due for up-to 180 days:
= $170,000 × 0.16
= $27,200
Bad Debts for accounts receivable due for more than 180 days:
= $87,000 × 0.27
= $23,490
Ending balance of Allowance account:
= $3,800 + $10,800 + $27,200 + $23,490
= $65,290
to beter take into account the differential impact of fixed and variable costs, marketing managers canuse ____ pricing
Answer:
target return pricing
Explanation:
Target return pricing is a pricing method that uses a very simple formula:
target price = [unit cost + (desired return x capital)] /unit salesThe price is based on the ROI that the company expects from a certain product (or project).
Even though this is a fairly simple method for pricing a good or service, it can also have serious negative consequences:
it doesn't take in account consumers' tastes or preferenceswhat happens if the expected ROI is too high, that could kill a project that could have been successful otherwisethe time frames are not always exact, e.g. you believed that a project would last 5 years, but due to a technological breakthrough it only lasts 4In order to successfully apply this type of pricing strategy, a company must be able to achieve or exceed their sales goals.
You invest 1,000 in a project today. the project will generate a cash flow of 3186 three years from now. if the interest rate is 3%, what is the net present value of the project?
Answer:
NPV= $1,915.64
Explanation:
Giving the following information:
Cash flow= $3,186
Number of periods= 3 years
Interest rate= 3%
Initial investment (Io)= $1,000
To calculate the net present value, we need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
NPV= -1,000 + (3,186/1.03^3)
NPV= $1,915.64
Rufus Inc. and Hardy Company are negotiating a nontaxable exchange of business properties. Rufus’s property has a $50,000 tax basis and a $77,500 FMV. Hardy’s property has a $60,000 tax basis and a $90,000 FMV. Which party to the exchange must pay boot to make the exchange work? How much boot must be paid? Assuming the boot payment is made, how much gain or loss will Rufus realize and recognize on the exchange, and what tax basis will Rufus take in the property acquired? Assuming the boot payment is made, how much gain or loss will Hardy realize and recognize on the exchange and what tax basis will Hardy take in the property acquired?
Answer:
Which party to the exchange must pay boot to make the exchange work?
Rufus must pay boot since the FMV of its property is less than the FMV of Hardy's property.How much boot must be paid?
$90,000 - $77,500 = $12,500Assuming the boot payment is made, how much gain or loss will Rufus realize and recognize on the exchange, and what tax basis will Rufus take in the property acquired?
Rufus doesn't have any gain, and the tax basis for the new asset will be $50,000 + $12,500 = $62,500Assuming the boot payment is made, how much gain or loss will Hardy realize and recognize on the exchange and what tax basis will Hardy take in the property acquired?
Since Hardy's property basis is $60,000 and it would be receiving $50,000 (Rufus's property) + $12,500 = $62,500, then it must recognize a $2,500 gain. The basis of Hardy's new property will be $62,500.Category of cost not associated from the extension of credit and accounts receivable is
A: Capital costs
B: Delinquency costs
C: Direct costs
D: Default costs
Answer:
A.Capital costs
Explanation:
please make me as brainlist
Products should be specified by brand because: a. price levels of brand items are low b. the number of potential suppliers is restricted c. it is difficult to develop accurate specifications for an item d. all of the above e. a and b above.
Answer:
C. It is difficult to develop accurate specifications for an item.
Explanation:
A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.
Generally, these products are manufactured and distributed through different marketing channels to various wholesalers or retailers before it gets to the consumers or customers.
Hence, each product should be distinguished from another through its brand name in order to enhance easier identification by the customers.
Products should be specified by brand because it is difficult to develop accurate specifications for an item. Thus, when a supplier such as a retailer or wholesaler wishes to place an order to a manufacturer, he or she should specify the order by brand.
Midtown Holdings Inc. contracts to sell a commercial parking garage to Nuevo Property LLC. The contract provides that if Midtown does not close the deal by a certain date, it must pay the buyer one-half of the value of the property. This provision is not enforceable if it is
Answer:
A penalty clause.
Explanation:
As the word penalty implies, it's said to come back as a sort of punishment towards who faults during a breach towards a contract, it can come as a punishment or forfeiture of a said paper, property or something tangible. it's sometimes seen to heavily levy it defaulters in an exceedingly monetary aspect during a lot of cases. An example will be seen when parties to a construction contract may agree that, if one party fails to deliver materials on time specified the project is delayed, it'll pay a hard and fast sum of cash per day, until delivery is created. It will be beneficial to use liquidated damages clauses, for various reasons.
B. Panuto: Isulat sa patlang kung ano ang tinutukoy sa pangungusap.
1. Ang tawag sa taong nagnenegosyo.
2. Ang panimulang salapi na ginagamit sa
pagnenegosyo.
3. Ang isang entrepreneur ay dapat magkaroon nito
upang ang produkto o serbisyo ay kumita ng
maganda
4. Alamin ang pagtatayuan ng negosyo.
5. Mahalaga ito upang maihatid at makilala ang
bagong produkto sa pamilihan.
Explanation:
1.negosyante.
2.kapital.
3.ng sapat na kaalaman sa pang negosyo.
4.inquiry
5.flayears
What's the present value, when interest rates are 7.5 percent, of a $170 payment made every year forever
Answer:
The present value of the perpetual annuity is $2,266.67.
Explanation:
Giving the following information:
Interest rate (i)= 7.5% = 0.075
Cash flows= $170
To calculate the present value (PV) of this perpetual annuity, we need to use the following formula:
PV= Cf/ (i)
PV= 170 / 0.075
PV= $2,266.67
The present value of the perpetual annuity is $2,266.67.
A company distributes a product that sells for $50 per unit. Variable expenses are $10 per unit, and fixed expenses total $15,000 annually. Assume that the company sold 4,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising expenditures, would increase annual unit sales by 50%. If these changes were made, by how much would net operating income increase or decrease?
Answer:
Income will increase by $20,000.
Explanation:
First, we need to calculate the current income:
Current income= 4,000*(50 - 10) - 15,000= $145,000
Now, the new selling price, fixed costs, and sales in units:
Selling price= 50*0.9= $45
Fixed costs= $45,000
Sales= 4,000*1.5= 6,000
New income= 6,000*(45 - 10) - 45,000= $165,000
Difference= 165,000 - 145,000= 20,000
Income will increase by $20,000.
Bates Company plans to add a new item to its line of consumer product offerings. Two possible products are under consideration. Each unit of Product A costs $10 to produce and has a contribution margin of $5, while each unit of Product B costs $18 and has a contribution margin of $6. What is the differential revenue for this decision
Answer:
the Differential revenue is $9
Explanation:
The computation of the differential revenue is shown below:
Differential revenue is
= (Product B) - (Product A)
= (Cost + contribution margin) - (Cost + contribution margin)
= ($18 + $6) - ($10 + $5)
= $24 - $15
= $9
hence, the Differential revenue is $9
Therefore the same is to be considered
We simply applied the above formula
Diego Corporation values its inventory at the lower of cost or net realizable value as required by IFRS. Diego has the following information regarding its inventory. Historical cost $100,000 Estimated selling price 98,000 Estimated costs to complete and sell 3,000 Replacement cost 90,000 What is the amount for inventory that Diego should report on the balance sheet under the lower of cost or net realizable value method
Answer:
$95,000
Explanation:
When a company reports its ending inventory at lower of cost or net realizable value (LCNRV), it must value its inventory at whichever is lower:
historical cost = $100,000net realizable value = selling price - estimated costs to complete and sell = $98,000 - $3,000 = $95,000since $95,000 is lower, then the company will report its inventory at net realizable value.
The skill you’re focusing on this week is:
could you explain some more please
Troy, a cash basis taxpayer, owns an office building. His records reflect the following for 20X1. On March 1, 20X1, office B was leased for twelve months for $12,000. A $900 security deposit was received which will be used as the last month's rent. On September 30, 20X1, the tenant in office A paid Troy $3,600 to cancel the lease expiring on March 31, 20X1. The lease of the tenant in office C expired on December 31, 20X1, and the tenant left improvements valued at $1,400. The improvements were not in lieu of any required rent. Considering just these four amounts, what amount must Troy include in rental income on his income tax return for 20X1?
a. $17,900
b. $17,000
c. $16,500
d. $13,800
Answer:
c. $16,500
Explanation:
The rental revenue from office B must be included even though 3 months of rent belong to 20x2 = $12,000 + the $900 security deposit (last moth of rent). The $3,600 received for canceling the lease of office A should also be included. Total rental income = $12,000 + $900 + $3,600 = $16,500.
Cash basis taxpayers recognize revenue when they collect money, and recognize expenses when they pay for them. There are some exceptions that apply to prepaid expenses or unearned revenue. This is known as the 12 month rule. It means that if the cash collection or payment do not extend for more than 12 months after they were made, then they can be recorded as either revenues or expenses during the current period. Since the rent was prepaid in advance for 12 months, then all the cash received must be considered revenue.
Define a random variable that represents the time in minutes required to assemble the product
A random variable x is a numerical outcome of a probability experiment. There is a numerical value which is determined by chance for each outcome in the procedure or experiment. Therefore, a random variable is used for describing outcomes using numerical values.
x = time in minutes
Dana, who is a trained yoga instructor, spends 4 hours on Monday baking and packing 10 boxes of cookies. She sells the cookies for $10 a box. Given that she can also teach yoga for $80 an hour, what is her opportunity cost of baking cookies?A. $220 B. $800 C. $320 D. $420 E. $100
Answer:
c. $320
Explanation:
Opportunity cost is an economic term for expressing cost in terms of forgone alternatives. The opportunity cost of Dana is calculated as;
Hours spent baking cookies = 4 hours, the amount earned per hour when Dana is working as yoga instructor = $80.
Therefore, the total opportunity cost of Dana, when she is baking is cookies;
= 4 hours × $80
= $320.
On December 31, 2020, Coolwear, Inc. had a balance in its prepaid insurance account of $59,400. During 2021, $97,000 was paid for insurance. At the end of 2021, after adjusting entries were recorded, the balance in the prepaid insurance account was $47,500. Insurance expense for 2021 was:
Answer:
$108,900
Explanation:
Opening balance in the prepaid insurance account = $59,400
Paid for insurance = $97,000
Balance in insurance account at the end = $47,500
Total amount paid ;
= Opening balance in the prepaid insurance account + paid for insurance
= $59,400 + $97,00
= $156,400
Insurance expense for 2021;
= Total amount paid - Balance at the end in the prepaid insurance account
= $156,400 - $47,500
= $108,900
Speicher sells sports shoes and formal shoes. Sports shoes sell for $110 each and cost $50 in variable expenses to make. Formal shoes sell for $220 and cost $100 in variable expenses to make. Speicher’s fixed expenses are $50,000. If 35% of his revenues are from sports shoes, what is Speicher’s weighted average contribution margin ratio? Provide your answer in decimal form (i.e. 65.2% = 0.652) and to three decimal places. Do not round intermediary calculations.
Answer:
weighted contribution margin ratio = 0.545
Explanation:
contribution margin of sport shoes = $110 - $50 = $60
contribution margin ratio of sport shoes = $60 / $110 = 0.545454
contribution margin of formal shoes = $220 - $100 = $120
contribution margin ratio of sport shoes = $120 / $220 = 0.545454
35% of total revenues come from sport shoes
weighted contribution margin ratio (it is the same for both products) = 0.545454 = 0.545
LLAP Company manufactures a special-ized hoverboard. LLAP began 2017 with an inventory of 240 hoverboards. During the year, it produced 1,200 boards and sold 1,300 for $800 each. Fixed production costs were $319,000, and variable production costs were $375 per unit. Fixed advertising, marketing, and other general and administrative expenses were $150,000, and variable shipping costs were $20 per board. Assume that the cost of each unit in beginning inventory is equal to 2017 inventory cost.1. Prepare an income statement assuming LLAP uses variable costing.2. Prepare an income statement assuming LLAP uses absorption costing. LLAP uses a denominator level of 1,100 units. Production-volume variances are written off to cost of goods sold.3. Compute the breakeven point in units sold assuming LLAP uses the following:a. Variable costingb. Absorption costing (Production
Answer:
Please see solution below
Explanation:
1. Prepare an income statement assuming LLAP uses variable costing
$
Sales
$800 × 1,300 = $1,040,000
Less cost of goods sold
Opening stock
($375 × 240)
$90,000
Add cost of goods manufactured
$450,000
Less closing stock
($374 × 140)
($52,500). ($487,500)
Gross profit. $562,500
Less periodic costs
Fixed production costs
($319,000)
Fixed advertising, marketing, admin
($150,000)
Shipping cost
($20 × 1,300)
($26,000)
Net income
$57,500
2. Prepare an income statement assuming LLAP uses absorption costing
$
Sales ($800 × 1,300)
$1,040,000
Less costs of goods sold
Opening stock ($665 × 240)
$159,600
Add costs of goods manufactured
769,000
Less closing stock ($665 × 140)
($93,100)
Add under - applied overhead
$29,000. $864,500
Gross profit. $175,500
Less periodic costs
Fixed advertising, marketing, admin
($150,000)
Shipping cost ($20 × 1,300)
($26,000)
Net loss. ($500)
3. Compute the Break even point in units sold assuming LLAP uses variable and absorption costing
a. Variable costing
BEP(units) = Fixed costs / Contribution per unit
= $319,000 + $150,000 / ($800 - $375 - $20)
= $469,000 / $405
= 1,159
b. Absorption costing(production = 1,200 boards)
BEP(units) = Fixed costs / Contribution per unit
= $319,000 + $150,000 / ($800 - $375 - $20)
= $469,000 / $385
= 1,159
_______ refers to the gathering information and uncovering customer needs by using one or more questions.
a. Probing
b. Communication narrowing
c. Objection refutation
d. Question empathizing
e. Interrogative encoding
Answer:
a. Probing
Explanation:
Probing refers to the gathering of information and uncovering customer needs by using one or more questions.
This ultimately implies that, business owners and service providers through the help of customer relationship department are able to understand the various customer needs by asking pertinent questions. The main purpose of this strategic approach (probing) is to ensure businesses understand customer needs and are able to provide appropriate solutions in a timely manner.
Some examples of probing questions used by various businesses are;
Did you enjoy our service? How satisfied are you with this product?What would you recommend we add to our website?If XYZ common stock has a $4 dividend, a yield of 4.2%, a price-to-earnings (P/E) ratio of 12, and it is trading at $96, its approximate earnings per share (EPS) is
Answer:
$8
Explanation:
According to the given situation, the computation of earnings per share is shown below:-
Earnings per share = Stock price ÷ Price-to-earnings
= $96 ÷ 12
= $8
Therefore we have applied the above formula to determining the earnings per share.
The same is to be considered
We simply divided the stock price by the price to earning so that the earning per share could come
For most consumers, maximizing utility through consumption generally means finding good deals in order to maximize the utility received for each dollar spent. However, some makers of luxury goods believe that their customers actually achieve utility by paying high prices. As a result, lowering prices may lead to reduced sales for the makers of luxury goods. How is this counterintuitive concept rationalized by analysis of consumer behavior and the utility maximization rule
Answer:
The explanation of that situation is below.
Explanation:
To begin with, the most important factor to have in mind in the situation explained above is the fact that we are talking about a "luxury good" and therefore that when it comes to this type of goods is better when the majority of the people do not possess or at least they must represent the fact that they are exclusive for only some part of the population. That is why that those goods use the strategy of increase always the price because that will means that they are not affordable for the majority of the society but only for a few and that will give to the owner of the good a sense of uniqueness and with that it also comes the sense of superiority. That is why that when it comes to this type of good the analysis change and it collides with the other theory of utility maximation.
. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)
Question Completion:
Diego Company manufactures one product that is sold for $76 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 58,000 units and sold 54,000 units.
Manufacturing Variable costs per unit:
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
The company sold 40,000 units in the East region and 14,000 units in the West region. It determined that $320,000 of its fixed selling and administrative expense is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
Answer:
Diego Company
Difference = $170,000 - (72,000)
= $242,000
Explanation:
a)Data and Calculations:
Selling price = $76 per unit
Units sold = 54,000
Units produced = 58,000
Direct materials $23
Direct labor 15
Variable manufacturing overhead 3
Variable selling and administrative 3
Variable costs per unit: $44
Fixed costs per year:
Fixed manufacturing overhead $1,160,000
Fixed selling and administrative $ 640,000
Cost of Production:
Under variable costing:
Variable cost per unit X Units produced
= $44 * 58,000 = $2,552,000
Cost of goods sold = $44 * 54,000 = $2,376,000
Cost of Ending Inventory = $44 * 4,000 = $176,000
Under Absorption costing:
(Variable manufacturing costs * Units produced) + Fixed manufacturing overhead
= $41 * 58,000 + $1,160,000
= $3,538,000
Product Cost per unit = $3,538,000/58,000 = $61
Cost of goods sold = $61 * 54,000 = $3,294,000
Ending Inventory = $61 * 4,000 = $244,000
Sales Revenue = $76 * 54,000 = $4,104,000
Income Statement Under Variable Under Absorption
Sales Revenue $4,104,000 $4,104,000
Cost of goods sold 2,376,000 3,294,000
Gross profit $1,728,000 $810,000
Fixed costs:
Manufacturing overhead $1,160,000
Selling and administrative 640,000 $640,000
Total fixed costs $1,800,000 $640,000
Net operating losses $72,000 $170,000
Difference = $170,000 - (72,000) = $242,000