Equity capital is generally more expensive than debt capital due to several reasons. These reasons include: Equity capital involves more risk than debt capital. Debt capital is borrowed money, and the lender expects to be repaid with interest. On the other hand, equity capital involves taking on investors who own a portion of the company.
Investors in equity capital expect to receive a return on their investment in the form of dividends and/or an increase in the value of their shares. Equity investors bear the risk of losing their investment if the company doesn't perform well. There is no fixed repayment schedule for equity capital.
Debt capital has a fixed repayment schedule. Equity capital, on the other hand, is considered an indefinite investment. Investors in equity capital expect to be compensated through returns on their investment, but they do not have a fixed repayment schedule. This means that if the company becomes profitable, it may have to share its earnings with equity investors for an indefinite period of time. This makes equity capital more expensive than debt capital. Equity capital comes with more strings attached than debt capital.
Equity investors usually expect some degree of control over the company's decision-making process. They may require a say in the company's strategy, management, or other aspects of its operation. This can be a costly expense for the company since it means giving up some control over its business to equity investors. These factors make equity capital more expensive than debt capital. However, there are also benefits to equity financing, such as not having to make interest payments or repay the principal amount borrowed.
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underutilized resources, such as unemployed workers or idle capital, will make an economy operate
more efficiently and effectively.
Underutilized resources, such as unemployed workers or idle capital, can have a significant impact on the efficiency and effectiveness of an economy.
these resources are not fully utilized, it means there is potential productive capacity that is not being utilized to its fullest extent. By putting these resources to work, an economy can benefit in the following ways:
1. Increased productivity: Employing unemployed workers and utilizing idle capital increases overall productivity within the economy. Unemployed individuals contribute their skills and labor, while idle capital, such as machinery or equipment, can be utilized to produce goods and services more efficiently. This leads to higher output levels and economic growth.
2. Reduction in waste: Underutilized resources represent wasted potential. By employing these resources, the economy can reduce waste and inefficiencies. Unemployed workers can contribute to production and generate income, while idle capital can be put to use in generating goods and services. This optimization leads to a more efficient allocation of resources.
3. Economic growth and development: When underutilized resources are effectively utilized, it can stimulate economic growth and development. Increased production, job creation, and income generation contribute to overall economic expansion. This can lead to improved living standards, increased consumption, and investment opportunities.
4. Improved competitiveness: Utilizing underutilized resources can enhance a country's competitiveness in the global market. A more efficient and productive economy can produce goods and services at competitive prices, making it more attractive for trade and investment.
It is important for policymakers and businesses to identify and address barriers that prevent the full utilization of these resources. This can involve implementing policies that promote job creation, skill development, infrastructure investment, and fostering an enabling environment for businesses to thrive.
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the following proof proves that the sum of two even numbers is even. select the mistake in the proof.
The following proof proves that the sum of two even numbers is even. Let a and b be two even numbers. Then by definition of even, a = 2m and b = 2n for some integers m and n.
In the given proof, there is no mistake as it is proven that if a and b are even numbers, then a + b is also an even number. To prove that the sum of two even numbers is even, it is shown that two even numbers can be represented in terms of 2m and 2n, where m and n are integers.
When we add these numbers, the resulting sum can be simplified to 2(m + n), where (m + n) is also an integer, making the sum even the proof is correct. To further elaborate, even numbers are divisible by and are always represented in the form 2n, where n is an integer.
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Carla Vista Company. a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-vear period and requires equal annual payments of $30.080 at the beginning of each year. The frst payment is received on January 1.2020 Carla Vista had purchased the machine during 2019 for $116.000. Collectibility of lease payments by Carla Vista is probable. Carla Vista set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Carla Vista at the termination of the lease. Your answer is correct. Compute the amount of the lease receivable. (For calculation purposes, use 5 decimal places as disployed in the factor tabie pravided and round final answer to 0 decimal ploces eg. 5,275 . Amount of the leasereceivable Suppose at the end of the lease term, Carla Vista receives the asset and determines that it actually has a fair value of $1.350 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Carla Vista at the end of the lease term. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places es. 5,275.
The amount of the lease receivable is $138,753 and the journal entry to recognize the receipt of the asset at the end of the lease term is to credit lease receivable and debit asset for $1,350.
Amount of the lease receivable
= (Present Value of Lease Payments)
= [Annual Lease Payments * Present Value of an ordinary annuity for 8 periods at 6%]
= ($30,080 * 4.62251)
= $138,753
Journal entry to recognize the receipt of the asset at the end of the lease term
Date | Account Title | Debit | Credit
------- | ------------- | -------- | --------
12/31/20 | Lease Receivable | $1,350 | Asset
Here is the explanation for the journal entry:
Lease Receivable: This account is credited to record the receipt of the asset from Dexter Corporation.
Asset: This account is debited to record the acquisition of the asset.
The fair value of the asset is higher than the anticipated residual value of $0, so Carla Vista records a gain on the disposal of the asset. The gain is calculated as follows:
Gain on Disposal of Asset = Fair Value of Asset - Book Value of Asset
= $1,350 - $0
= $1,350
This gain is not taxable because it is a capital gain.
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Question 7 A rural farmer's auction regularly buys barrels of corn from the local farmers, By Friday of each week, the auction station sells all of their leftover goods to a horse breeder to be used to feed the horses. The auction has been paying $13 per barrel for the fresh corn from the farmers and is able to resell it to the local markets for $28 per barrel. The horse breeder pays only $5 per barrel for the week-old corn. On average the local markets demand 374 (with a a standard deviation of 87 ) barrels of corn each week. Since the farmer's auction needs to place their orders well in advance from the local farmers, how many barrels of corn should the auction purchase each week?
The farmer's auction should purchase 461 barrels of corn each week.
The average demand for corn from the local markets is 374 barrels per week.
The standard deviation of demand is 87 barrels per week.
The auction pays $13 per barrel for the fresh corn from the farmers and is able to resell it to the local markets for $28 per barrel.
The horse breeder pays only $5 per barrel for the week-old corn.
We know that the auction wants to maximize its profits. To do this, it should purchase enough corn to meet the average demand of the local markets, plus enough corn to cover the standard deviation of demand. This way, the auction will have enough corn to meet demand even if there is a higher-than-average demand.
The total number of barrels of corn that the auction should purchase is:
Average demand + Standard deviation of demand = 374 barrels + 87 barrels = 461 barrels
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16 Part 16 of 16 0.7 oints 8 00:20:01 eBook Print References Required information c. From the bottom of Refund Receipt, select More > Transaction Journal d. What are the Account and Amount Debited? No
From the bottom of Refund Receipt, select More > Transaction Journal and find the Account and Amount Debited in QuickBooks.
When you select More > Transaction Journal from the bottom of the Refund Receipt, you will see the Account and Amount Debited in Quick Books. Quick Books is a popular accounting software used by small businesses to manage their finances, including sales, expenses, and payments.
QuickBooks allows you to create and send invoices, track sales and expenses, manage inventory, and generate financial reports. Therefore, the answer to the question "From the bottom of Refund Receipt, select More > Transaction Journal. Provided in the given question.
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Assume that Universal plans to purchase $700,000 in fixed assets during 2022 and to dispose of no fixed assets during 2022. What would be its forecast for net fixed assets in 2022?
The forecast for net fixed assets in 2022 would be $700,000.
Net fixed assets represent the value of a company's fixed assets after deducting accumulated depreciation. In this case, Universal plans to purchase $700,000 in fixed assets during 2022 and does not plan to dispose of any fixed assets. Therefore, the forecast for net fixed assets in 2022 would be equal to the amount of fixed assets purchased, which is $700,000.
Net fixed assets are an important component of a company's balance sheet as they represent the long-term investment in assets that are used to generate revenue. By forecasting net fixed assets, companies can estimate the value of their long-term assets and plan for future investments and capital expenditures.
It's worth noting that the forecast for net fixed assets assumes that no disposals of fixed assets will occur during 2022. If there were any disposals, the forecasted net fixed assets would need to take into account the value of the disposed assets as well. However, in this scenario, since no disposals are expected, the forecast is simply based on the planned purchase of $700,000 in fixed assets.
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________ are financial payments over and above regular base pay.
A) Foreign service premiums
B) Hardship allowances
C) Balance sheet payments
D) Mobility premiums
The correct answers are A) Foreign service premiums, B) Hardship allowances, and D) Mobility premiums. These terms refer to different types of financial payments provided to individuals in addition to their regular base pay in certain situations. Let's briefly explain each one:
A) Foreign service premiums: These are additional payments given to employees who work in foreign countries. They are intended to compensate for the challenges and additional costs associated with living and working abroad.
B) Hardship allowances: Hardship allowances are payments made to employees who are working in challenging or difficult environments. These could include locations with extreme climate conditions, high levels of security risks, or limited access to basic amenities. The purpose is to provide compensation for the hardships endured by the employees.
C) Balance sheet payments: This option is not correct. Balance sheet payments typically refer to financial transactions related to the accounting treatment of assets, liabilities, and equity on a company's balance sheet. They are not specifically related to additional payments made to employees.
D) Mobility premiums: Mobility premiums are financial incentives given to employees who are required to relocate for work purposes. These payments help cover the costs associated with moving, such as transportation, temporary accommodation, and other related expenses.
In summary, while foreign service premiums, hardship allowances, and mobility premiums are all types of financial payments provided on top of base pay, balance sheet payments are not directly related to additional employee compensation.
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Discon Corporation manufactures a popular doll called Teardrops. Last year the company started with 11,000 dolls, produced 255,000 dolls, and ended the year with 9,000 dolls. Each doll was sold for $23. The actual unit cost for Teardrops is given below:
Direct material $ 3.00
Direct labour 0.80
variable overhead 3.50
Fixed overhead 8.20
Total unit cost $ 15.50
The only selling expenses were a commission of $3 per unit sold and advertising amounting to $360,000. Administrative expenses, all fixed, equalled $280,000. There were no beginning and ending work-in-process inventories.
Required:
1. Prepare an income statement.
Discon Corporation's income statement shows a net income of $46,750.
Prime Cost $3.80 per doll. Conversion Cost $7.30 per doll. Variable cost $7.30 per doll.
Income StatementSales Revenue: $581,900
(255,000 dolls * $23/doll)
Cost of Goods Sold: $395,250
(255,000 dolls * $15.50/doll)
Gross Profit: $186,650
Selling Expenses: $111,900
(255,000 dolls * $3/doll) + $360,000
Administrative Expenses: $280,000
Net Income: $46,750
Prime Cost:Prime cost is the sum of direct materials and direct labor costs. In this case, prime cost is $3.00 + $0.80 = $3.80 per doll.
Conversion Cost:Conversion cost is the sum of direct labor and variable overhead costs. In this case, conversion cost is $3.80 + $3.50 = $7.30 per doll.
Variable Cost:Variable cost is the sum of direct materials, direct labor, and variable overhead costs. In this case, variable cost is $3.80 + $3.50 + $0.00 = $7.30 per doll.
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(remaining question)
The only selling expenses were a commission of $3 per unit sold and advertising amounting to $351,000. Administrative expenses, all fixed, equaled $271,000. There were no beginning and ending work-in-process inventories.
Required
1. Prepare an income statement.
2. Calculate the following per unit costs.
a. Prime Cost
b. Conversion Cost
c. Variable cost
Chad will provide the service in exchange for a $34,500 non-interest bearing note, to be paid at the end of six years. The market rate is 6%. Use the TVM Solver.
Find the following:
1. Service Revenue for 12/31/Y1: $
2. How much Interest Revenue was recorded YTD at 12/31/Y3: $
The interest revenue recorded YTD at 12/31/Y3 is $3,315.28.
1. To find the service revenue for 12/31/Y1, we need to calculate the present value of the $34,500 non-interest bearing note at the market rate of 6% for six years.
Using the TVM (Time Value of Money) Solver, we can determine the present value. Here are the steps:
Step 1: Open the TVM Solver on a financial calculator or use a financial software/tool.
Step 2: Enter the following information:
- N (number of periods): 6
- I/Y (interest rate per period): 6%
- FV (future value): $34,500
- PV (present value): ?
- PMT (payment per period): 0 (since it is a non-interest bearing note)
Step 3: Solve for PV (present value).
By solving the equation, we find that the present value (service revenue) for 12/31/Y1 is $25,672.04.
2. To calculate the interest revenue recorded Year-to-Date (YTD) at 12/31/Y3, we need to determine the interest earned on the non-interest bearing note from 12/31/Y1 to 12/31/Y3.
The interest revenue can be calculated by subtracting the initial service revenue from the present value of the non-interest bearing note at 12/31/Y3.
Here are the steps:
Step 1: Calculate the interest earned for two years.
- PV (present value at 12/31/Y1): $25,672.04 (calculated in step 1)
- N (number of periods): 2
- I/Y (interest rate per period): 6%
- FV (future value): ?
- PMT (payment per period): 0 (since it is a non-interest bearing note)
Step 2: Solve for FV (future value).
By solving the equation, we find that the future value at 12/31/Y3 is $28,987.32.
Step 3: Calculate the interest revenue YTD at 12/31/Y3.
- Interest Revenue = Future Value - Initial Service Revenue
- Interest Revenue = $28,987.32 - $25,672.04
- Interest Revenue = $3,315.28.
Therefore, the interest revenue recorded YTD at 12/31/Y3 is $3,315.28.
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6. What role does business strategy alignment play in successful supply chain management? Consider the importance of getting all of the supply chain partners on the same page when it comes to satisfying the ultimate customers of the supply chain. 7. What did Bon Ami do to reduce transportation costs as it aligned its business strategy with the low-cost business strategy of Wal-Mart? This has to do with Bon Ami's distribution center. 8. Think about the "perfect order" and discuss how Bon Ami's delivery times to Wal-Mart have had to become more precise. How do more precise delivery times support WalMart's low-cost/fast-growth business strategy?
Business strategy alignment plays a crucial role in successful supply chain management because it ensures that all supply chain partners are working towards a common goal of satisfying the ultimate customers. The concept of the "perfect order" refers to delivering products to customers accurately, on time, and in the desired condition.
Business strategy alignment plays a crucial role in successful supply chain management because it ensures that all supply chain partners are working towards a common goal of satisfying the ultimate customers. When the business strategies of all partners are aligned, they can coordinate their efforts and resources effectively, resulting in improved efficiency, cost-effectiveness, and customer satisfaction. Alignment helps in streamlining processes, optimize inventory levels, minimize lead times, and enhance overall supply chain performance.
To reduce transportation costs and align its business strategy with the low-cost strategy of Wal-Mart, Bon Ami implemented changes in its distribution center. Bon Ami optimized its distribution network by strategically locating its distribution center closer to Wal-Mart's retail stores or distribution hubs. This helped in reducing transportation distances, minimizing fuel costs, and improving delivery efficiency. By aligning its distribution center location with Wal-Mart's network, Bon Ami was able to leverage economies of scale, reduce transportation expenses, and enhance its cost competitiveness.
The concept of the "perfect order" refers to delivering products to customers accurately, on time, and in the desired condition. As Bon Ami aligned its business strategy with Wal-Mart's low-cost/fast-growth strategy, it had to ensure more precise delivery times to support Wal-Mart's operations. Wal-Mart's low-cost strategy focuses on efficient inventory management and minimizing stockouts. By delivering products to Wal-Mart with more precision, Bon Ami helps Wal-Mart maintain optimal inventory levels, avoid overstocking or stockouts, and meet customer demand effectively. Precise delivery times enable Wal-Mart to minimize holding costs, maximize sales, and enhance customer satisfaction, all of which align with its low-cost/fast-growth business strategy.
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If the price of gasoline is $4.00 per gallon and the price elasticity of demand is −.4 how much will a 10% reduction in the quantity available for sale on the market affect the price? Will total expenditures on gasoline increase or decrease? How do you know?
If the price of gasoline is $4.00 per gallon and the price elasticity of demand is −.4, a 10% reduction in the quantity available for sale on the market will increase the price by 4%.
Total expenditures on gasoline will increase.
To find the answer, we needed to use the formula:
% change in quantity demanded = % change in price / price elasticity of demand
where:% change in price = -10% (reduction in quantity available for sale on the market)
% change in quantity demanded = ?
price elasticity of demand = -0.4 (negative sign means a negative relationship between price and quantity demanded, which is typical of gasoline)
Plugging in the given values, % change in quantity demanded = % change in price / price elasticity of demand
% change in quantity demanded = (-10%) / (-0.4)%
change in quantity demanded = 4%
This means that a 10% reduction in quantity available for sale on the market leads to a 4% increase in price. Thus, the new price of gasoline will be:$4.00 + 4% = $4.16
Total expenditures on gasoline will increase because the price increase is greater than the quantity decrease. Since the demand for gasoline is inelastic (-0.4), a decrease in quantity available for sale on the market will only result in a small decrease in quantity demanded, whereas the price increase will be significant.
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1. THE TWO KINDS OF FEDERAL ADMINISTRATIVE AGENCIES?
- legislative and executive
- executive and independent
- legislative and independent
- executive and judicial
2. IF A BUSNIESSFIRM LANDSCAPES ITS GROUND AND DEVELOPES A STRUCTURE GRADER THAT BENEFITS THE FIRM BUT ALSO BENEFITS THE NEIGHBORHOOD THAT WOULD BE ?
- third party beneficiary
- condition subsequent
- done beneficiary contract
- positive externality
The two kinds of federal administrative agencies are executive and independent. The neighborhood gains from these improvements even though it is not directly involved in the business transactions or activities of the firm.
- Executive agencies are created and overseen by the executive branch of the government, which is responsible for enforcing laws. Examples include the Environmental Protection Agency (EPA) and the Federal Bureau of Investigation (FBI). These agencies are under the direct control of the president.
- Independent agencies, on the other hand, are established by Congress to carry out specific functions. They are meant to be more independent from political influence. Examples include the Federal Communications Commission (FCC) and the Securities and Exchange Commission (SEC). These agencies have their own leadership and are not directly controlled by the president.
If a business firm landscapes its ground and develops a structure grader that benefits both the firm and the neighborhood, this would be an example of a positive externality.
- A positive externality occurs when a third party, in this case, the neighborhood, benefits from the actions of an economic agent, the business firm, without compensation. In this scenario, the firm's landscaping and structure grader not only benefit the firm by enhancing its property value or aesthetics but also benefit the neighborhood by improving the overall appearance or property values in the area.
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Linda owned a parcel on Frontage Road that was 120ft. wide by 250ft. deep. She subdivided the lot into two parcels of 120ft by 125ft. She then sold the front property to Henry, reserving an access easement in the deed for access to the rear parcel. Linda did nothing with the rear property for 20 years, after which time she decided to build a house. Henry, on the other hand, had constructed a house and lived on the front parcel for 20 years. He claimed the easement was invalid because of nonuse. If Henry filed a lawsuit, the court would find the easement invalid because Linda could not grant herself an easement. invalid because of nonuse for 20 years. valid because easements created by deed do not terminate. invalid because Linda failed to put in the deed that the easement would not be used for an indeterminate period.
Therefore, the court would likely find the easement valid because easements created by deed do not typically terminate due to nonuse, and Linda had the legal right to grant an easement to herself.
If Henry filed a lawsuit claiming that the easement is invalid due to nonuse, the court would likely find the easement valid. Here's why:
1. Easements created by deed do not typically terminate due to nonuse. An easement is a legal right to use someone else's property for a specific purpose, such as accessing another parcel of land. Once an easement is created and properly recorded in the deed, it generally remains in effect unless there are specific conditions or events outlined in the deed that would terminate it. In this case, Linda reserved an access easement in the deed when she sold the front property to Henry.
2. Linda granted the easement to herself. In this situation, Linda sold the front property to Henry while reserving an access easement in the deed for herself to access the rear parcel. While it may seem unusual for someone to grant an easement to themselves, it is legally permissible. Linda's intent was to maintain the right to access the rear parcel through the front property, which she successfully did by including the easement in the deed.
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If Henry filed a lawsuit claiming the easement was invalid due to nonuse, the court would likely find the easement valid because easements created by deed generally do not terminate due to nonuse.
An easement is a legal right to use another person's property for a specific purpose, in this case, access to the rear parcel. The fact that Linda did not use the easement for 20 years does not automatically invalidate it. Additionally, Linda granted the easement to herself when she sold the front property to Henry, which is not legally possible.
An easement is typically granted by one party to another, not to oneself. Therefore, the court may find the easement invalid on that basis. To summarize, if Henry filed a lawsuit claiming the easement was invalid due to nonuse, the court would likely find the easement valid because easements created by deed do not terminate due to nonuse. However, the court may find the easement invalid because Linda granted it to herself, which is not legally permissible.
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which of the following is true about regulation and supervision of the financial system? multiple choice question. government agencies regulate but do not supervise the financial system. government agencies create rules to regulate the financial system and supervise the system to make sure these rules are followed. government agencies create rules to supervise the financial system and regulate the system to make sure these rules are followed. government agencies supervise but do not regulate the financial system.
Government agencies create rules to regulate the financial system and also have the responsibility of supervising the system to ensure compliance with these rules.
Regulation and supervision of the financial system are crucial for maintaining stability, protecting consumers, and preventing fraudulent activities. Government agencies, such as central banks, financial regulatory authorities, and supervisory bodies, play a vital role in this process. These agencies develop and implement rules and regulations that govern various aspects of the financial system, including banking, securities, insurance, and other financial institutions.
Regulation involves establishing guidelines and requirements that financial institutions must adhere to, such as capital adequacy ratios, risk management practices, disclosure requirements, and consumer protection measures. These rules are designed to promote transparency, fairness, and stability in the financial system.
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Sammy Wilsonand friends started a consulting firm,Wilson Consultants Inc., on January 01, 2010.The company helps organizations improve their performance by analyzing existing business problems and developing plans for improvements. This is how the trial balance looks on January 31, 2010.
On January 01, 2010, Sammy Wilson and friends established Wilson Consultants Inc., a consulting firm aimed at assisting organizations in enhancing their performance by analyzing current business issues and devising improvement plans.
To evaluate the company's financial position, a trial balance was prepared on January 31, 2010. In this case, a trial balance is a list of all the company's accounts and their corresponding balances. It is used to ensure that the total debits equal the total credits, which signifies that the accounting records are in balance.
However, the question does not provide any details about the trial balance itself. To provide a clear and concise answer, it is necessary to have the specific accounts and their respective balances.
Therefore, without more information, it is not possible to provide an accurate and informative response. If you can provide the account names and their balances, I will be able to guide you further in understanding the trial balance and its implications.
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On January 01, 2010, Sammy Wilson and friends established Wilson Consultants Inc., a consulting firm specializing in helping organizations enhance their performance through the analysis of existing business problems and the development of improvement plans.
A trial balance is a statement that summarizes all the balances in the accounts of a company at a particular point in time. In this case, the trial balance shows the financial information for Wilson Consultants Inc. as of January 31, 2010. However, the trial balance itself is not provided in the question.
The trial balance typically includes a list of accounts and their respective balances, such as cash, accounts receivable, accounts payable, revenue, expenses, and equity. Each account has a debit or credit balance, depending on whether it has increased or decreased during the accounting period.
A trial balance serves as the basis for preparing financial statements, such as the income statement and balance sheet, which provide a more comprehensive view of a company's financial position.
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Sales
Variable Costs
Contribution Margin
Fixed Costs
Operating Income
$100,000
$60,000
$40,000
$30,000
$10,000
The above financial information was the result of selling 9.158 units.
What would their new operating income be if they sold 10,753 units? ROUND ANY INTERMEDIATE CALCULATION OF UNIT COSTS TO FOUR DECIMAL PLACES BEFORE CALCULATING YOUR FINAL
ANSWER. Round your answer to the nearest whole number. Enter your answer
without dollar signs or commas.
If the company sold 10,753 units, their new operating income would be $1,972. Operating income is a measure of a company's profitability that reflects the earnings generated from its core business operations.
To calculate the new operating income if the company sold 10,753 units, we need to determine the unit contribution margin and the new fixed costs.
Given:
Sales: $100,000
Variable Costs: $60,000
Contribution Margin: $40,000
Fixed Costs: $30,000
Operating Income: $10,000
Units Sold: 9,158
First, let's calculate the unit contribution margin:
Unit Contribution Margin = Contribution Margin / Units Sold
Unit Contribution Margin = $40,000 / 9,158 = $4.36
Next, let's calculate the new fixed costs:
New Fixed Costs = Fixed Costs
Now, we can calculate the new operating income:
New Operating Income = (Sales - Variable Costs - (Unit Contribution Margin * New Units Sold)) - New Fixed Costs
New Operating Income = ($100,000 - $60,000 - ($4.36 * 10,753)) - $30,000
Calculating the above expression gives us the new operating income:
New Operating Income = $1,972
Therefore, if the company sold 10,753 units, their new operating income would be $1,972.
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16 Escher Skateboards has been manufacturing its own wheels for its skateboards. The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labor cost. The direct materials and direct labor cost per unit to make the wheels are $1.50 and $1.80, respectively. Normal production is 200,000 wheels per year. A supplier offers to make the wheels at a price of S4 cach. If the skateboard company accepts this offer, all variable manufacturing costs will be eliminated, but the $42,000 of fixed manufacturing overhead currently being charged to the skateboard wheels will have to be absorbed by other products. Instructions 1. Prepare the incremental analysis for the decision to make or buy the wheels. 2. Should Escher Skateboard buy the wheels from the outside supplier? Justify your answer.
1. Since buying is less expensive than producing, Escher Skateboard should buy the wheels from the outside supplier.
2. The total cost of buying is less than the total cost of manufacturing, indicating that buying is the better option.
The total cost of buying is less than the total cost of manufacturing, indicating that buying is the better option.
1. Prepare the incremental analysis for the decision to make or buy the wheels. Incremental analysis is the process of examining the financial implications of a decision.
The following incremental analysis was performed to decide whether Escher Skateboard should manufacture or buy the wheels from a supplier.
Cost of manufacturing 200,000 wheels: Direct materials cost = $1.50 * 200,000
= $300,000
Direct labor cost = $1.80 * 200,000
= $360,000
Variable manufacturing overhead cost = 30% of direct labor cost = 0.30 * $360,000
= $108,000
Fixed manufacturing overhead cost
= $42,000
Total cost = $300,000 + $360,000 + $108,000 + $42,000
= $810,000
Cost of buying 200,000 wheels: Price per wheel = $4
Cost to buy 200,000 wheels = $4 * 200,000
= $800,000
Since buying is less expensive than producing, Escher Skateboard should buy the wheels from the outside supplier.
2. Should Escher Skateboard buy the wheels from an outside supplier? Justify your answer.
Escher Skateboard should buy the wheels from an outside supplier because it will save money.
The total cost of buying is less than the total cost of manufacturing, indicating that buying is the better option.
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On December 31,20×1, the Income Statement section of the worksheet is shown below. The balance of Ally Logan's drawing account is $32,000. Prepare the closing entries that should be made in the general journal. Journal entry worksheet Prepare the closing entries that should be made in the general journal. Journal entry worksheet Record entry to transfer sales, interest, purchases return and allowances and purchase discounts to income summary. Note: Enter debits before credits. Prepare the closing entries that should be made in the general journal. Journal entry worksheet Record entry to transfer sales return and allowances, purchases and expenses to income summary. Note: Enter debits before credits. Prepare the closing entries that should be made in the general journal. Journal entry worksheet Record entry to transfer net income to capital account. Note: Enter debits before credits. Prepare the closing entries that should be made in the general journal. Journal entry worksheet < 12 Record entry to transfer drawings to capital account. Note: Enter debits before credits.
Closing Entries refers to the journal entries that transfer the balances of temporary accounts to permanent accounts at the end of the accounting period. These entries result in the resetting of the temporary accounts to zero balances, ready to accumulate the data of the next accounting period.
Temporary accounts include revenue accounts, expense accounts, and withdrawal accounts.The given information in the Income Statement section of the worksheet on December 31, 20x1, shows that the balance of Ally Logan's drawing account is 32,000. The closing entries are as follows:Closing Entry 1: Record the transfer of sales, interest, purchases return, allowances, and purchase discounts to income summary. Sales Interest Purchases returns and allowances Purchase discounts Income summary Closing Entry 2:
Record the transfer of sales returns and allowances, purchases, and expenses to income summary. Sales returns and allowances Purchases Expenses Income summary Closing Entry 3: Record the transfer of net income to the capital account. Income summary Capital Closing Entry 4: Record the transfer of drawings to the capital account. Capital Drawings Therefore, these are the closing entries that should be made in the general journal on December 31, 20x1.
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A researcher designs a study so that aspects of the study mirror the outside world, including multiple potential influences upon the study's results. This researcher is primarily concerned with
A. internal validity. (changes in the experiment made a difference.)
B. external validity. (generalizability)
C. the control group.
D. the experimental group.
The researcher is concerned with the generalizability of the study's results to the real world, so they are trying to increase the external validity of the study.
External validity is the extent to which the results of a study can be generalized to other situations, people, settings, and measures. A study with high external validity is more likely to be applicable to the real world.
Internal validity is the extent to which the results of a study can be attributed to the independent variable, rather than to other factors. A study with high internal validity is more likely to be accurate and reliable.
The control group and the experimental group are both important aspects of a study, but they are not directly related to external validity. The control group is used to compare the results of the experimental group to a baseline, while the experimental group is the group that is exposed to the independent variable.
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Match the accounting terminology to the definitions. 1. Cost of Goods Sold a. An inventory system that requires businesses to obtain a physical count of inventory to determine quantities on hand. 2. Perpetual inventory system b. Expenses, other than Cost of Goods Sold, that are incurred in the entity's major ongoing operations. 3. Periodic inventory system c. Excess of Sales Revenue over Cost of Goods Sold. 4. Operating expenses d. The cost of inventory that the business has sold to customers. 5. Gross margin e. Goods the company owns and expects to sell to customers in the normal course of operations. 6. Inventory f. An inventory system that keeps a running record of inventory. Select the letter of the definition that corresponds to the term. 1. Cost of Goods Sold 2. Perpetual inventory system 3. Periodic inventory system 4. Operating expenses 5. Gross margin 6. Inventory
Cost of Goods Sold (COGS): The cost of inventory that the business has sold to customers.
The matching of accounting terminology to the definitions are given below; Perpetual inventory system: An inventory system that keeps a running record of inventory.
Periodic inventory system: An inventory system that requires businesses to obtain a physical count of inventory to determine quantities on hand. Operating expenses: Expenses, other than Cost of Goods Sold, that are incurred in the entity's major ongoing operations Gross margin: Excess of Sales Revenue over Cost of Goods Sold. Inventory: Goods the company owns and expects to sell to customers in the normal course of operations.
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which of the following best describe a wrap account? the firm offering the account would need to be registered as both a broker-dealer and an investment advisor the account fee covers both transactions and advice the wrap fee for the account covers only where the firm acts as a broker or acts as a dealer the firm may only be registered as a broker or dealer a) iii and iv b) ii and iii c) i and iv d) i and ii
A wrap account refers to an investment account that is typically managed by an asset management company or a financial advisory firm for a flat fee.
A wrap account is designed to provide investors with a comprehensive and Option is not correct because the fourth point, "the firm may only be registered as a broker or dealer"
Is incorrect since it is required that the firm should be registered as both a broker-dealer and an investment advisor. investment portfolio. To answer the question, the following options best describe a wrap account:
Option (a) is not correct because the fourth point, "the firm may only be registered as a broker or dealer" is incorrect since it is required that the firm should be registered as both a broker-dealer and an investment advisor.
Option (b) is the correct answer; ii and iii describe a wrap account.
The reason is that the account fee covers both transactions and advice while the wrap fee for the account covers only where the firm acts as a broker or acts as a dealer.
Option (c) is incorrect because only point i is correct. Lastly, option (d) is incorrect because point iii is incorrect.
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Kinko Copying office at Lafayette estimates that a copy machine
would help generating $1,100 cash flows each year for the remaining
two years in this copy machine's useful life. The current book
value
The Kinko Copying Office at Lafayette estimates that a copy machine would help in generating $1,100 cash flows each year for the remaining two years of its useful life. The current book value is not given, so the following assumptions will be made. 100 words only.
To determine whether to replace the copier or not, the firm can use a relevant cash flow analysis. This involves identifying the incremental cash flows generated by each alternative, including the present copier, and the cost of acquiring a new copier.
If the net cash flows from the purchase of the new copier are higher than those from continuing to use the existing copier, the firm should buy the new one.
Since the copier has only two years of useful life left, the firm should consider the annual cash flows of $1,100, which will generate a total of $2,200 over the next two years.
The book value is not given; thus, it is safe to assume that the copier has no salvage value. The purchase of a new copier would require a capital expenditure of $5,000.
The incremental cash flows of the replacement of the copier would be -$5,000 and $2,200 for year one and year two respectively. Therefore, the net cash flows for the replacement of the copier would be -$2,800. This suggests that the current copier should be maintained for the next two years, as it is less costly than purchasing a new one.
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How does the company's product feature (build quality, packaging, durability, reliability, quality of inputs) reflect the company's positioning? (5 Marks)
The company's product feature such as build quality, packaging, durability, reliability, and quality of inputs reflects the company's positioning in several ways.
These product features are important considerations that the company can use to shape its reputation and positioning in the market.
Build Quality: The quality of a company's product, in this case, build quality, can determine the company's reputation in the market. The better the build quality, the better the company's positioning in the market. A company that prioritizes build quality is seen as one that is committed to producing high-quality products that will last for a long time.
Packaging: Packaging is another essential product feature that reflects a company's positioning. The packaging of a company's product can communicate the company's values, beliefs, and objectives. A company that prioritizes environmentally-friendly packaging, for instance, positions itself as one that is committed to environmental conservation.
Durability: A product that is durable can position a company as one that produces high-quality products. A durable product is one that is reliable and can last for a long time without breaking down or malfunctioning.
Reliability: Reliability is an essential product feature that positions a company as one that can be trusted to produce dependable and consistent products. A company that prioritizes reliability will strive to produce products that work efficiently and consistently.
Quality of Inputs: The quality of inputs is another essential product feature that positions a company in the market. The better the quality of inputs used in a product, the better the product's overall quality. A company that prioritizes the quality of inputs can position itself as one that produces high-quality products.
Conclusively, the company's product feature such as build quality, packaging, durability, reliability, and quality of inputs reflects the company's positioning in the market. A company that prioritizes these features can position itself as one that is committed to producing high-quality, dependable, and reliable products.
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For the first four hours of the day, the arrival rate at the newly established gas station is 18 vehicles per hour. The gas station is capable of serving 16 vehicles per hour. The last vehicles arrives exactly four hours after the start of the day. Assume that the system is empty at the start and that no vehicle who arrives leaves without being served.
How long will that vehicles be in the gas station ( in hours ) ___ hour
The average time a vehicle spends at the gas station is 0.5 hour, and the total time spent by all vehicles is four hours.
The gas station has an arrival rate of 18 vehicles per hour and a service rate of 16 vehicles per hour. This means that on average, more vehicles arrive at the gas station than can be served.
To calculate the average time a vehicle spends at the gas station, we can use the formula:
Average time = 1 / (service rate - arrival rate)
In this case, the service rate is 16 vehicles per hour and the arrival rate is 18 vehicles per hour. Plugging these values into the formula, we get:
Average time = 1 / (16 - 18)
= 1 / (-2)
= -0.5 hour
Since time cannot be negative, the average time spent by vehicles at the gas station is 0.5 hour.
However, the last vehicle arrives exactly four hours after the start of the day. This means that the total time spent by all vehicles at the gas station is four hours.
To find the number of vehicles that arrived during these four hours, we can use the formula:
Number of vehicles = arrival rate * time
Plugging in the values, we get:
Number of vehicles = 18 * 4
= 72 vehicles
The vehicles will be in the gas station for 4 hours.
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Suppose the demand and supply functions are: Q z
d
=15−5P z
Q s
2
=3+3P τ
What is the equllibrium quantity for the competitive market? 2.5 1.5 7.5 4.5
The equilibrium quantity for the competitive market is 7.5. It represents the point where buyers and sellers agree on the quantity and price in the market, ensuring a balance between supply and demand.
To find the equilibrium quantity for the competitive market, we need to determine the quantity at which the quantity demanded (Qd) equals the quantity supplied (Qs). In other words, we are looking for the point where the demand and supply curves intersect.
Given the demand function Qd = 15 - 5P and the supply function Qs = 3 + 3P, we can set Qd equal to Qs:
15 - 5P = 3 + 3P
Next, we can solve for P by rearranging the equation:
15 - 3 = 5P + 3P
12 = 8P
P = 12/8
P = 1.5
Now, we can substitute the value of P back into either the demand or supply function to find the equilibrium quantity. Let's use the demand function:
Qd = 15 - 5P
Qd = 15 - 5(1.5)
Qd = 15 - 7.5
Qd = 7.5
Therefore, the equilibrium quantity for the competitive market is 7.5.
At this quantity, the quantity demanded equals the quantity supplied, resulting in a market equilibrium where there is no excess demand or supply. It represents the point where buyers and sellers agree on the quantity and price in the market, ensuring a balance between supply and demand.
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If Terry's discount rate is 3 , what is their associated discount factor?
Where are nudges least likely to be useful A person has lots of chance to learn from experience Choices that are made only on
The associated discount factor for Terry's discount rate of 3 is 0.9709.
The discount factor represents the present value of future cash flows, taking into account the discount rate. It is calculated using the formula: Discount Factor = 1 / (1 + Discount Rate). In this case, Terry's discount rate is 3. Plugging the value into the formula, we get: Discount Factor = 1 / (1 + 3) = 0.25. Therefore, the associated discount factor for Terry's discount rate of 3 is 0.25.
Regarding the second question, nudges are least likely to be useful when a person has ample opportunities to learn from experience or when the choices being made are solely based on personal preferences. Nudges are behavioral interventions designed to guide people towards making better decisions without limiting their freedom of choice. They can be effective in situations where individuals lack information, face cognitive biases, or make choices that may not align with their long-term goals. However, when individuals have sufficient experience and knowledge to make informed decisions, or when personal preferences play a significant role, nudges may have limited impact. In such cases, individuals may rely more on their own judgment and preferences rather than being influenced by external nudges.
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the comstock lode in nevada yielded vast amounts of __________.
The Comstock Lode in Nevada yielded vast amounts of silver and gold. Discovered in 1859, the Comstock Lode was a major mining deposit that played a significant role in the development of the American West.
Located near Virginia City, Nevada, the lode produced an enormous quantity of precious metals, particularly silver, making it one of the richest and most important mining sites in the United States. The discovery of the Comstock Lode sparked a mining rush, attracting thousands of miners, prospectors, and entrepreneurs to the region. The extraction of silver and gold from the Comstock Lode not only resulted in immense wealth for individuals and mining companies but also had a profound impact on the economy of the Western United States. The influx of population and capital spurred the growth of towns, infrastructure, and industries in the area.
The Comstock Lode's production of silver and gold contributed significantly to the overall wealth and prosperity of the United States during the late 19th century. It also played a vital role in the silver mining industry, supporting the nation's monetary system and bolstering economic activity in the region. The legacy of the Comstock Lode remains an important part of Nevada's history and the story of American mining.
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compare the two types of market expansion strategies with
special reference to export marketing?
Domestic market expansion focuses on the home country, while international market expansion, including export marketing, targets foreign markets.
Domestic market expansion involves strategies aimed at increasing sales and market share within the home country, catering to local consumer preferences and implementing effective marketing strategies. On the other hand, international market expansion and export marketing strategies involve targeting foreign markets to sell products or services abroad. This requires understanding international consumer preferences, adapting products or services to meet foreign demand, complying with foreign regulations, establishing distribution networks, and implementing effective marketing and promotional activities in foreign markets. The key difference lies in the geographic scope and the need to address additional challenges such as cultural differences, language barriers, and legal requirements when expanding internationally.
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"An increase in the price of smartphones of 16.00% would cause
the quantity demanded of smartphones to decrease by 18.00%. The
absolute value of the price elasticity of demand
is______
To find the absolute value of the price elasticity of demand, we need to divide the percentage change in quantity demanded by the percentage change in price.
1. Calculate the percentage change in quantity demanded:
Percentage change in quantity demanded = (New quantity demanded - Old quantity demanded) / Old quantity demanded * 100%
In this case, the percentage change in quantity demanded is -18.00%.
2. Calculate the percentage change in price:
Percentage change in price = (New price - Old price) / Old price * 100%
In this case, the percentage change in price is 16.00%.
3. Divide the percentage change in quantity demanded by the percentage change in price to find the absolute value of the price elasticity of demand:
Absolute value of the price elasticity of demand = |Percentage change in quantity demanded / Percentage change in price|
Absolute value of the price elasticity of demand = |-18.00% / 16.00%|
Therefore, the absolute value of the price elasticity of demand is 1.125.
In conclusion, the absolute value of the price elasticity of demand is 1.125. This means that a 1% increase in price would lead to a 1.125% decrease in quantity demanded, indicating a relatively elastic demand for smartphones.
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Find the profit function if cost and revenue are given by C(x)=197+2.9x and R(x)=7x−0.08x
2
. The profit function is P(x)=__
The profit function is [tex]P(x) = 4.1x - 0.08x^2 - 197[/tex]. This equation represents the profit made based on the number of items sold, x. The profit function calculates the difference between the revenue and the cost, giving us the overall profit.
To find the profit function, we need to subtract the cost function from the revenue function.
Let's go through the steps:
Given:
Cost function: [tex]C(x) = 197 + 2.9x[/tex]
Revenue function: [tex]R(x) = 7x - 0.08x^2[/tex]
To find the profit function, P(x), we subtract the cost function from the revenue function:
[tex]P(x) = R(x) - C(x)[/tex]
Let's substitute the given functions into the equation:
[tex]P(x) = (7x - 0.08x^2) - (197 + 2.9x)[/tex]
Now, let's simplify the equation:
[tex]P(x) = 7x - 0.08x^2 - 197 - 2.9x[/tex]
Combining like terms, we have:
[tex]P(x) = 4.1x - 0.08x^2 - 197[/tex]
So, the profit function is [tex]P(x) = 4.1x - 0.08x^2 - 197.[/tex]
This equation represents the profit made based on the number of items sold, x.
The profit function calculates the difference between the revenue and the cost, giving us the overall profit.
The profit is influenced by the quantity sold, as indicated by the x term, as well as the cost and revenue functions.
The coefficient of [tex]x^2 (-0.08)[/tex] shows that the profit is influenced by the square of the quantity sold, indicating a non-linear relationship.
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