The given scenario describes that the price of goose feathers, an input for pillows, increases sharply. In the market for pillows, both curves shift.
Both curves shift in the market for rice when researchers develop a higher yielding, insect-repellent strain of rice. The increase in the production of rice due to the new strain of rice shifts the supply curve to the right, which affects the market.
Due to the increase in supply, the price of rice decreases, and the demand curve shifts to the right.Michael is fired from his job after working there for over 20 years, and eats out less as a result. In the market for restaurants, the demand curve shifts.
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The consumption function in a macroeconomy is C=100+.80 Yd, where Yd-disposable income and the equilibrium aggregate income (Yeq) = 1000. Which of the ff. 3 statements about money supply is TRUE? 4 by P100 billion, by how much will Yeq [Select] [Select] The marginal propensity to save is 0.2 The fiscal multiplier is -5. None of the 3 Choices The marginal propensity to consume is - 0.8 If Government decreases tax by P100 billion, what is the new Yeq? [Select] The consumption function in a macroeconomy is C=100+.80 Yd, where Yd-disposable income and the equilibrium aggregate income (Yeq) = 1000. Which of the ff. 3 statements about money supply is TRUE? [Select] If Government expenditure (G), increases by P100 billion, by how much will Yeq change? [Select] [Select] None of the 4 Choices up by 400 B up by 500 B down by 500 B down by 400 B If Gover [Select h illion, what is the new Yeq? The consumption function in a macroeconomy is C=100+.80 Yd, where Yd-disposable income and the equilibrium aggregate income (Yeq) = 1000. Which of the ff. 3 statements about money supply is TRUE? [Select] If Government expenditure (G), increases by P100 billion, by how much will Yeq change? [Select] If Government decreases tax by P100 billion, what is the new Yeq? [Select] [Select] 1300 B 1500 B 1400 B 1200 B None of the 4 Choices V 4
The consumption function in a macroeconomy is given by the formula C=100+.80 Yd, where Yd is disposable income and the equilibrium aggregate income (Yeq) is 1000. We need to determine three things from this given information.
Given the consumption function, C=100+.80 Yd and the equilibrium aggregate income (Yeq) = 1000, we have the following:At equilibrium, C = Y.C = 100+.80 YdYeq = C = 100 + 0.80YdSubstituting Yeq = 1000, we have:1000 = 100 + 0.80Yd0.80Yd = 900Yd = 1125Therefore, the disposable income is Yd = 1125.Using the consumption function C=100+.80 Yd, we have:C = 100 + 0.80 × 1125 = 1000So, consumption is C = 1000. Also, the savings S = Y - C = 1000 - 1000 = 0.
Therefore, the marginal propensity to save is 0.2 and the marginal propensity to consume is (1 - 0.2) = 0.8. The fiscal multiplier is given by the formula 1 / (1 - MPC), where MPC is the marginal propensity to consume. Therefore, the fiscal multiplier is 1 / (1 - 0.8) = 5.Now, let’s answer the questions one by one:Which of the three statements about the money supply is true?None of the 3 Choices.If the Government expenditure (G) increases by P100 billion, by how much will Yeq change?
Up by 400 B.If the Government decreases taxes by P100 billion, what is the new Yeq? 1300 B.
Therefore, the correct options are:None of the 3 ChoicesUp by 400 B1300 B.
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Transacting Business with Customs and Trade Facilitation
Special Economic Zone (SEZ)
Question: Many argue that the establishment of Special Economic Zones (SEZs) within a country threatens its domestic market and curtails much-needed revenue from international trade. Explain how it has helped countries like Korea, Malaysia and Singapore.
Special Economic Zones is an economic development tool utilized by many countries across the world as a means of promoting industrialization.
Foreign investment, and trade through a separate area or region that has distinct economic policies and legal regimes. SEZs can help a country's growth and development by generating foreign direct investment (FDI), increasing exports, creating jobs, and increasing tax revenues.
Malaysia has five SEZs that operate under different regimes and offer different incentives to attract foreign investment, including tax incentives, import duty exemptions, and streamlined customs procedures. One of the most significant SEZs in Malaysia is the Iskandar Malaysia economic zone in Johor Bahru, located in the southern part of Malaysia.
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monitary policy. microeconomics
Explain how banks are financially leveraged based on our lectures,
notes and the short-film on banking
In microeconomics, the monetary policy is used to help regulate the economy. The monetary policy affects financial institutions, especially banks.
Banks are financially leveraged, and this is done to increase the number of loans that they can make to customers. Banks have to maintain a minimum level of assets and cash reserves to ensure that they can cover their liabilities and debts in case of emergencies and demands for withdrawals.
Therefore, banks have to ensure that the amount of money they have in reserves is adequate to cover their liabilities. If the bank doesn’t have adequate reserves, it can borrow from other banks to meet its obligations. This is done through the Federal Reserve’s discount window, which allows banks to borrow funds to meet their short-term obligations.
Banks are financially leveraged, and this is done to increase the number of loans that they can make to customers. Banks have to maintain a minimum level of assets and cash reserves to ensure that they can cover their liabilities and debts in case of emergencies and demands for withdrawals. If the bank doesn’t have adequate reserves, it can borrow from other banks to meet its obligations.
Banks are financially leveraged through the use of assets and cash reserves. Financial leverage is the amount of debt that a bank has compared to its assets. The bank’s assets are used as collateral to borrow money to lend to customers. This increases the amount of money the bank can lend out and allows them to earn more interest and fees on the loans. Banks also borrow money from other banks to ensure they have adequate reserves to cover their liabilities.
Banks are financially leveraged through the use of assets and cash reserves. Financial leverage is the amount of debt that a bank has compared to its assets. The bank’s assets are used as collateral to borrow money to lend to customers.
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on december 15 of the current year, conrad accounting services received $40,000 from a client to provide bookkeeping services for the client in the following year. which accounting principle would require conrad accounting services to record the bookkeeping revenue in the following year and not in the year the cash was received?multiple choicemonetary unit assumption.going-concern assumption.measurement (cost) principle.business entity assumption.revenue recognition principle.
The accounting principle that would require Conrad Accounting Services to record the bookkeeping revenue in the following year and not in the year the cash was received is: e) Revenue recognition principle.
The revenue recognition principle states that revenue should be recognized (recorded) in the accounting period in which it is earned, regardless of when the cash is received. According to this principle, revenue is recognized when the goods or services are provided to the customer, and the amount can be reliably measured.
In this case, Conrad Accounting Services received $40,000 from a client on December 15 of the current year, but the services for which the payment was made will be provided in the following year. Therefore, the revenue should not be recognized in the current year when the cash is received. Instead, it should be recognized in the following year when the bookkeeping services are provided, following the revenue recognition principle.
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There are many types of communication barriers. Which of the following statements best describes "filtering" as a communication barrier? a. The conmunication receiver may not accurately comprehend that communications because the recehver was very angry with the sender the mersage was communicated b. The comamunication receiver may not accurately comprehend the communications because thek prior experience attactes their unchatanding ef the. message. c. The communication recelver may not accurates comprehend the cenmunications because the sender has not inchoded ail the details because they are norried about how they will be perceived d. The communication receher may not accuratey comprehend the communications becaute the sender has a stong accent QUESTION 11 True or False. A team is a group of people that work together in an organization they will be supervised by the same leader but they will have a common goal but they may or may not have interdependent work. true False
Filtering as a communication barrier refers to the distortion or manipulation of information by the sender, who intentionally omits certain details in fear of how they will be perceived by the receiver.
Filtering occurs when the sender selectively shares information, withholding certain details or manipulating the message to present a biased or altered version. This communication barrier arises when the sender is concerned about the receiver's reaction, opinion, or judgment. The sender may choose to omit or modify information, leading to a lack of clarity or understanding on the part of the receiver.
This can hinder effective communication because the receiver may not have access to all the relevant details necessary for a complete comprehension of the message. Filtering can result in misinterpretation, confusion, and a breakdown in communication between the sender and receiver. It is important for both parties to engage in open and transparent communication to minimize the impact of filtering and promote effective information exchange.
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Consider the Wireless Carriers industry as described in the article under Exam Preview. Using information from the article, does Leap Wireless has a competitive advantage based on its economic performance (use ROIC for your comparison)? (show to what value you compare the performance measure to). Note: ROIC= net income / (total assets - current liabilities)
To determine if Leap Wireless has a competitive advantage based on its economic performance, we need to calculate its ROIC and compare it to the industry benchmark. By doing so, we can assess if Leap Wireless is performing better or worse than its industry peers.
Based on the information provided in the article, we can determine if Leap Wireless has a competitive advantage based on its economic performance by comparing its Return on Invested Capital (ROIC) to a benchmark value.
To calculate the ROIC, we divide the net income by the difference between total assets and current liabilities. The ROIC measures how efficiently a company generates profits from its invested capital.
First, we need to obtain the financial information for Leap Wireless from the article. Specifically, we need the net income, total assets, and current liabilities values for Leap Wireless. Once we have these values, we can calculate the ROIC.
Next, we need to determine the benchmark value for the industry. This benchmark value represents the average ROIC for companies in the Wireless Carriers industry. We can find this information by researching industry reports or financial databases.
After obtaining the benchmark value, we compare Leap Wireless's ROIC to the benchmark. If Leap Wireless's ROIC is higher than the benchmark, it suggests that the company has a competitive advantage based on its economic performance.
Therefore, to determine if Leap Wireless has a competitive advantage based on its economic performance, we need to calculate its ROIC and compare it to the industry benchmark. By doing so, we can assess if Leap Wireless is performing better or worse than its industry peers.
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After you have read "The Law", "3 Philosophical Approaches", and watched the video entitled "The Pilgrims and Property Rights: How our ancestors got fat & happy", please post a 7-12 sentence response of how they are related and your conclusions.
The Law, "3 Philosophical Approaches," and "The Pilgrims and Property Rights" explore individual rights, property rights, and limited government intervention, emphasizing personal freedom, voluntary exchange, and the rule of law.
"The Law" by Frédéric Bastiat, the "3 Philosophical Approaches" (presumably referring to different philosophical perspectives on economics), and the video on the Pilgrims and property rights share a common theme centered around the fundamental principles that contribute to societal progress and prosperity.
They emphasize the significance of individual rights and property rights as essential foundations for economic and personal liberty.
"The Law" highlights the concept of justice and the negative consequences of excessive government intervention, arguing for the protection of individual rights and the limitation of government power.
The "3 Philosophical Approaches" likely explore different perspectives such as classical liberalism, libertarianism, and perhaps utilitarianism or socialism, each providing insights into the relationship between individual freedom, economic systems, and societal outcomes.
The video on the Pilgrims and property rights likely presents historical evidence showcasing the positive impact of property rights on economic development and individual well-being.
It demonstrates how the establishment of property rights among the Pilgrims in early America incentivized productivity, cooperation, and prosperity. This aligns with the broader theme of individual rights and limited government intervention, illustrating the benefits of voluntary exchange and the rule of law.
Overall, these works converge in emphasizing the importance of individual rights, property rights, and limited government intervention as key principles for promoting economic growth, personal freedom, and social well-being.
They present a case for the positive outcomes that result from respecting and protecting these principles in the context of societal organization and governance.
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Inventory data for Moath Company are reported as follows.
Date
Explanation
Units
Unit Cost
Total Cost
June 1
Inventory
Purchase
200
$5
$1,000
12
400
6
2,400
23
300
7
2,100
Purchase
30
Inventory
100
Assume a sale of 440 units occurred on June 15 for a selling price of $8 and a sale of 360 units on June 27 for $9.
(a1)
X Your answer is incorrect.
Calculate cost of goods available for sale.
$
The cost of goods available for sale
6536
To calculate the cost of goods available for sale, we need to sum up the total cost of the inventory purchases.
Given information:
June 1: Inventory Purchase - 200 units at $5 per unit, totaling $1,000.
June 12: Inventory Purchase - 400 units at $6 per unit, totaling $2,400.
June 23: Inventory Purchase - 300 units at $7 per unit, totaling $2,100.
June 30: Inventory - 100 units (no cost provided).
Let's calculate the cost of goods available for sale:
Cost of Goods Available for Sale = Total Cost of Purchases + Cost of Inventory
Total Cost of Purchases = $1,000 + $2,400 + $2,100 = $5,500
Cost of Inventory = $0 (no cost provided for the inventory on June 30)
Cost of Goods Available for Sale = $5,500 + $0 = $5,500
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Lowden Company has an overhead application rate of 158% and allocates overhead based on direct material cost. During the current period, direct labor cost is $52,000 and direct materials used cost $82,000. Determine the amount of overhead Lowden Company should record in the current period. $51,899. $129,560. $32,911. $82,000. $52,000.
To determine the amount of overhead Lowden Company should record in the current period, we need to calculate the overhead cost based on the direct material cost.
The formula to calculate overhead cost is:
Overhead cost = Overhead application rate × Direct material cost
Given:
Overhead application rate = 158%
Direct material cost = $82,000
Let's calculate the overhead cost:
Overhead cost = 158% × $82,000
Overhead cost = 1.58 × $82,000
Overhead cost = $129,560
Therefore, the amount of overhead Lowden Company should record in the current period is $129,560. The correct option is $129,560.
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The following income statement items are provided for Grant, Inc.: Sales/Revenue (1,500 units X $30 per unit) = $45,000 Variable costs (1,500 units X $14 per unit) = $21,000 Fixed costs $16,000 total What is this company's magnitude of operating leverage? O 1.31 O 3.00 O 0.33 O 2.00
Grant, Inc.'s magnitude of operating leverage which refers to the sensitivity of a company's earnings is option B) 3.00
The magnitude of operating leverage refers to the sensitivity of a company's earnings before interest and taxes (EBIT) to changes in sales volume.
The degree of operating leverage (DOL) is computed by dividing the company's percentage change in earnings before interest and taxes (EBIT) by the percentage change in sales.
In this situation, the degree of operating leverage formula is (Sales - Variable Cost) ÷ (Sales - Variable Cost - Fixed Cost).
To calculate the magnitude of operating leverage of Grant, Inc, you can divide the percentage change in EBIT by the percentage change in sales. However, in the question, there are no percentage changes.
Therefore, we will use the formula to compute the DOL, as shown below:
Sales/Revenue = $45,000
Variable costs = $21,000
Fixed costs = $16,000
We can calculate the DOL using the following formula:
DOL = (Sales - Variable Cost) ÷ (Sales - Variable Cost - Fixed Cost)
DOL = ($45,000 - $21,000) ÷ ($45,000 - $21,000 - $16,000)
DOL = $24,000 ÷ $8,000DOL
= 3.0
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What is the present value of the following set of cash flows,
discounted at 14.9% per year?
CF - Year 1- $110
Year 2- $-110
Year 3-$ 204
Year 4 $-204
The present value of the cash flows, discounted at a rate of 14.9% per year, is approximately $163.77.
To calculate the present value of the cash flows, we need to discount each cash flow to its present value and then sum them up. The formula for calculating the present value of a cash flow is:
PV = CF / (1 + r)^n
Where:
PV = Present Value
CF = Cash Flow
r = Discount rate
n = Number of years
Let's calculate the present value for each cash flow:
PV1 = $110 / (1 + 0.149)^1 = $110 / 1.149 = $95.85 (rounded to two decimal places)
PV2 = $-110 / (1 + 0.149)^2 = $-110 / 1.3301 = $-82.72 (rounded to two decimal places)
PV3 = $204 / (1 + 0.149)^3 = $204 / 1.5378 = $132.80 (rounded to two decimal places)
PV4 = $-204 / (1 + 0.149)^4 = $-204 / 1.7542 = $-116.98 (rounded to two decimal places)
Now, we sum up the present values of all cash flows:
PV = PV1 + PV2 + PV3 + PV4 = $95.85 + $-82.72 + $132.80 + $-116.98 = $163.77 (rounded to two decimal places)
Therefore, the present value of the given set of cash flows, discounted at a rate of 14.9% per year, is approximately $163.77.
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which of the following items describe ways of classifying incentives according to their different types, from an economist’s point of view?
Economists classify incentives into three types: positive, negative, and moral. Positive incentives involve the promise of a reward or better outcome. Negative incentives are based on the threat of punishment or the possibility of a worse outcome.
Moral incentives, on the other hand, are those that appeal to people's sense of morality or desire to do the right thing.
Economists often think of incentives in terms of their potential to influence people's behavior. Positive incentives are those that provide individuals with some sort of reward or benefit for engaging in a particular behavior.
For example, a company might offer its employees a bonus for meeting certain performance goals. This incentive would motivate employees to work harder and perform better in order to receive the bonus.
Negative incentives, on the other hand, are those that discourage people from engaging in certain behaviors. For example, a government might impose fines or other penalties for violating certain laws or regulations. This type of incentive is designed to discourage people from engaging in behavior that is considered undesirable or harmful.
Finally, moral incentives are those that appeal to people's sense of morality or desire to do the right thing. For example, a company might emphasize the importance of ethical behavior and encourage employees to act in accordance with its values. This type of incentive is designed to encourage people to act in ways that are consistent with their own moral principles and values.
Economists classify incentives into three main types: positive, negative, and moral. Positive incentives provide rewards or benefits for engaging in certain behaviors, while negative incentives discourage certain behaviors by imposing penalties or fines.
Moral incentives appeal to people's sense of morality and encourage them to act in ways that are consistent with their values. Understanding the different types of incentives and how they influence behavior is important for policymakers, business leaders, and anyone else who wants to influence people's behavior.
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Give answer Write a discussion on Research an esports brand in
North America and discuss the role they play in the industry. What
do they do? What is their business model?
The esports industry in North America has experienced significant growth in recent years, with various brands playing a crucial role in its development. One such brand is Team Liquid, a prominent organization in the esports scene.
Team Liquid is involved in multiple aspects of the industry.
Firstly, they sponsor professional esports teams across various games, including League of Legends, Counter-Strike: Global Offensive, and Dota 2.
By providing financial support, training facilities, and other resources, Team Liquid enables players to compete at the highest level.
They also organize and participate in esports tournaments, allowing their teams to showcase their skills and compete for prestigious titles and prize money.
In addition to team sponsorship and tournament participation, Team Liquid engages in content creation.
They produce and distribute videos, live streams, and other forms of media to engage with their audience and promote their brand.
This content includes gameplay highlights, behind-the-scenes footage, player interviews, and analysis of matches. By creating compelling content, Team Liquid not only attracts fans but also generates revenue through advertisements, sponsorships, and merchandise sales.
Team Liquid's business model revolves around a combination of revenue streams.
They earn income through sponsorships and partnerships with companies that align with the esports industry.
This includes brands such as Alienware, Monster Energy, and Honda.
Additionally, Team Liquid generates revenue from tournament winnings, content creation, merchandise sales, and fan contributions through platforms like Patreon or Twitch subscriptions.
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H12.C2
(Ine rollowing inrormation appies to the questions aispiayea Deiow.) Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and prior years follo
Given information. Lansing Company's current-year income statement and selected balance sheet data on December 31 of the current and prior years follows. To explain H12.
In the vertical analysis of financial statements, each line item in a financial statement is expressed as a percentage of a base figure on the same statement. Vertical analysis is used to compare the financial statement of a single business over time.
The trend is expressed as a percentage and is calculated by comparing the figures from one period to the figures from the previous period. The formula for calculating vertical analysis of the income statement is as follows erotica analysis of income statement.
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Which of the following statements is false when considering the behavior of a mixed cost within the relevant range? Multiple Choice The total amount of a mixed cost will increase when the level of activity increases The werage mixed cost per unit will increase when the level of activity decreases The variable portion of a med cost cases the total amount of a moud cost to decrease when the level of activity decreases The feed portion of a med cost causes the total amount of a mod cost to remain constant when the level of activity increases ing statements is false... Which of the following statements is false when considering cost behavior within the relevant range? Multiple Choice A variable cost remains constant, in total, as the activity level changes A variable cost is constant i expressed on a per unit basis A fixed cost remains constant, in total, regardless of changes in the level of activity The average food cost per unit vores inversely with changes in the level of activity Which of the following statements is false when considering cost behavior within the relevant range? Multiple Choice A variable cost varles, in total, in direct proportion to changes in the tevel of activity. The variable cost per unit varies inversely with changes in the level of activity A fed cost remains constant, in total, regardless of changes in the level of activity The average fed cost per unit varies inversely with changes in the level of activity Which of the following statements is false with respect to contribution format income statements? Multiple Choice O They include contribution margin. They include fixed selling expenses. They separate expenses by their cost behavior They exclude period costs from variable expenses
Mixed costs are a combination of variable costs and fixed costs. In the relevant range, a mixed cost has a fixed and a variable component. The fixed component remains constant within the range of activity, whereas the variable component changes with activity levels.
The following statement is false when considering the behavior of a mixed cost within the relevant range: The average mixed cost per unit will increase when the level of activity decreases. This statement is false because the average mixed cost per unit will increase when the level of activity decreases (Option B).
Explanation: The term “relevant range” refers to the range of activity within which assumptions about cost behavior are valid. The relevant range is the range of output that a company expects to produce within a given time period.
Therefore, in the relevant range, the following statement is false when considering the behavior of a mixed cost: The average mixed cost per unit will increase when the level of activity decreases (Option B). Therefore, the false statement with respect to contribution format income statements is Option B: They include fixed selling expenses.
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Current Attempt in Progress AA Cost of land $ eTextbook and Media Save for Later education.wiley.com A -/3 E A On March 1, 2022, Oriole Company acquired real estate, on which it planned to construct a small office building, by paying $82,500 in cash. An old warehouse on the property was demolished at a cost of $8,700; the salvaged materials were sold for $1,800. Additional expenditures before construction began included $1,300 attorney's fee for work concerning the land purchase, $4,750 real estate broker's fee, $8,800 architect's fee, and $14,500 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land.
The amount to be reported as the cost of the land is $74,650.
The cost of the land includes the purchase price of the land, and any expenses incurred to make the land ready for construction. In the given problem, the cost of the land can be calculated as follows:
Purchase price of the land = $82,500
Costs incurred to make the land ready for construction:
Demolition cost = $8,700, Salvaged materials sold = -$1,800 (negative sign indicates the cash inflow), Attorney’s fee = $1,300, Real estate broker's fee = $4,750, Architect's fee = $8,800
Cost to put in driveways and a parking lot = $14,500
The total cost incurred to make the land ready for construction = $8,700 - $1,800 + $1,300 + $4,750 + $8,800 + $14,500 = $37,250
Therefore, the amount to be reported as the cost of the land = $82,500 + $37,250 = $119,750.
However, the problem only requires the amount to be reported as the cost of the land. Hence, the cost of demolishing the old warehouse and selling the salvaged materials, attorney's fee, real estate broker's fee, architect's fee, and cost to put in driveways and a parking lot need to be subtracted from the purchase price of the land.
The amount to be reported as the cost of the land is
$82,500 - $8,700 + $1,800 + $1,300 + $4,750 + $8,800 + $14,500 = $74,650.
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Question 7 If Ending Inventory is overstated, COGS will be 1 points which means Net Income will be
If Ending Inventory is overstated, COGS will be understated which means Net Income will be overstated as well. This can be explained by the effect of ending inventory on cost of goods sold (COGS) and net income.
The amount of COGS is calculated using the following formula:Beginning Inventory + Purchases - Ending Inventory = COGSIf ending inventory is overstated, it will decrease the cost of goods sold (COGS). This is because the cost of goods sold is calculated by subtracting the ending inventory from the sum of beginning inventory and purchases.
When ending inventory is overstated, it will decrease the amount of COGS, thus increasing the gross profit. Consequently, an overstatement of ending inventory will lead to an overstatement of net income. Therefore, net income is indirectly affected by changes in the ending inventory.
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what are the advantages of the realization principle for defining gross income? (check all that apply.)
The realization principle is a standard accounting principle used to calculate revenue or gross income for tax purposes.
What are its advantages?Its advantages in defining gross income are as follows:
Increases transparency - The realization principle promotes transparency in accounting and ensures that revenue is only recognized when it is earned and collected. It increases clarity in financial reporting and provides accurate information to investors and other stakeholders.
Prevents tax evasion - It helps to prevent tax evasion by ensuring that income is recognized in the year it is earned and not in the year it is received.
The IRS applies this principle to determine the appropriate tax year of certain items of gross income, gains, and losses.
It avoids tax overpayment - The realization principle avoids tax overpayment by ensuring that revenue is recognized when it is earned, not when it is collected.
It ensures that revenue is accurately matched to the expenses incurred to generate that revenue.
It helps to calculate net income - The realization principle helps in the calculation of net income by providing a clear and accurate picture of the revenue and expenses associated with a particular period of time.
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Frontier Corporation has a contribution margin of $1,682,000 and net operating income of of $336,400. If sales increase 22%, by what percentage will profits increase? a) 22.00% b) 160.00% c) 110.00% d) 50.00%
Frontier Corporation has a contribution margin of $1,682,000 and net operating income of of $336,400. If sales increase 22%, profits will increase by 50.00%.
Here is the solution:
Let the sales be $x.
Then, the net operating income as a percentage of sales will be:
(336,400/x) * 100%
If sales increase by 22%, then the new sales will be 1.22x.
The new net operating income will be:
336,400 + 22% * 336,400 = $408,088
The new net operating income as a percentage of sales will be:
(408,088/1.22x) * 100%
The percentage increase in profits is:
(408,088/1.22x) * 100% - (336,400/x) * 100% = 50.00%.
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who gave us a theory included gluttony, debauchery and overall, having a good time?
The theory that includes gluttony, debauchery, and overall having a good time was given by the Greek philosopher Epicurus.
Epicurus, an ancient Greek philosopher who lived from 341 BC to 270 BC, developed a philosophical theory known as Epicureanism. The theory focused on achieving a pleasurable and fulfilling life. While the term "gluttony" may carry negative connotations, in Epicurean philosophy, it emphasized the enjoyment of food and the pursuit of simple pleasures as part of a balanced and satisfying life.
Epicurus believed that the highest good is pleasure and that a good life should be guided by rationality, prudence, and the pursuit of happiness. However, his concept of pleasure was not centered on excessive indulgence or debauchery but rather on the absence of pain and tranquility of the mind. Epicurus emphasized the importance of moderation, self-control, and the avoidance of unnecessary desires and fears.
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reak-Even Sales
Anheuser-Busch InBev SA/NV (BUD) reported the following operating information for a recent year:
Sales $3,968,000
Cost of goods sold $992,000 Selling, general, and administrative expenses 496,000 1,488,000
Operating income $2,480,000*
*Before special items In addition, assume that Anheuser-Busch InBev sold 31,000 barrels of beer during the year. Assume that variable costs were 75% of the cost of goods sold and 50% of selling, general, and administrative expenses. Assume that the remaining costs are fixed. For the following year, assume that Anheuser-Busch InBev expects pricing, variable costs per barrel, and fixed costs to remain constant, except that new distribution and general office facilities are expected to increase fixed costs by $14,900.
a. Compute the break-even number of barrels for the current year. Round to the nearest whole barrel.
fill in the blank 1 barrels
b. Compute the anticipated break-even number of barrels for the following year. Round to the nearest whole barrel.
fill in the blank 2 barrels
Break-even point (in barrels) for the current year = $2,480,000 / ($3,968,000 / 31,000 - $24.10) = 20,760.5 ≈ 20,761 barrels
Break-even point (in barrels) for the following year = $2,494,900 / ($3,968,000 / 31,000 - $24.10) = 21,164.8 ≈ 21,165 barrels
The calculation of Break-even sales is as follows:
Break-even point (in barrels) = Fixed Costs / (Revenue per barrel - Variable costs per barrel)
From the given information,
Variable costs per barrel = (75% of 992,000) / 31,000 + (50% of 496,000) / 31,000
= $24.10 per barrel
Fixed costs = $2,480,000
Break-even point (in barrels) for the current year = $2,480,000 / ($3,968,000 / 31,000 - $24.10)
= 20,760.5 ≈ 20,761 barrels
For the following year, Fixed Costs = $2,480,000 + $14,900 = $2,494,900
Break-even point (in barrels) for the following year = $2,494,900 / ($3,968,000 / 31,000 - $24.10)
= 21,164.8 ≈ 21,165 barrels
Break-even analysis is used to determine the number of units a company must sell to break even. Break-even analysis looks at the level of fixed costs relative to the profit earned by each additional unit produced and sold. Fixed costs are those costs that do not vary with output.
In contrast, variable costs are those that change with output. The sum of these two types of costs is the total cost of production. Break-even analysis is an important tool for determining the minimum level of sales necessary to cover all costs.
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Kern Industries is considering the replacement of an older technology with new technology that
will have a capitalized base of $44,500,000. The older technology, having a remaining six-year
useful life (operating life and accounting life) with no anticipated salvage value under a
straight-line depreciation method, currently has a book value of $12,000,000 and is believed to
be marketable at book. Under the current tax system, the new equipment purchase qualifies for
the five-year MACRS depreciation rates, has no allowable investment tax credit, and has an
operating life of six years. Further, the company projects that over the six-year life of the new
machine, the company will increase revenues by $15,000,000 in the first year and expenses by
only $2,000,000 in the first year – in each subsequent year, revenues will increase by 5% and
expenses are expected to increase by 8%. In addition, the company plans to invest an additional
$1,000,000 in working capital (immediately) and estimates that it will have to increase (each
year) its working capital investment (inventory, accounts receivable, etc.) by 6% of the increase in
revenues. Throughout, the marginal corporate tax rate is expected to remain at 34%.
If the firm’s cost of capital is 12%, what is the value of the technology to this company and
should it make this investment?
The obvious questions are whether this is a profitable or valuable investment; and, how does one
measure the value in order to make such a decision?
We can use the Net Present Value (NPV) method. NPV calculates the present value of future cash flows generated by the investment, discounted at the company's cost of capital. Here's how we can calculate the NPV:
Step 1: Calculate the initial investment (cash outflow) for the new technology:
Initial Investment = Capitalized Base of the New Technology + Working Capital Investment
Initial Investment = $44,500,000 + $1,000,000 = $45,500,000
Step 2: Calculate the cash flows for each year:
Year 0 (Initial Investment) = -$45,500,000
Years 1 to 6:
Revenue = $15,000,000 * (1 + 5%)^(Year - 1)
Expense = $2,000,000 * (1 + 8%)^(Year - 1)
Cash Flow = (Revenue - Expense) * (1 - Tax Rate)
Step 3: Discount the cash flows back to present value using the cost of capital (12%):
Present Value (PV) = Cash Flow / (1 + Cost of Capital)^(Year)
Step 4: Calculate the NPV by summing up all the present values:
NPV = Σ(Present Value of Cash Flows) - Initial Investment
Now, let's calculate the NPV for Kern Industries:
Year 0: PV = -$45,500,000 / (1 + 0.12)^0 = -$45,500,000
Year 1: Revenue = $15,000,000 * (1 + 5%)^(1) = $15,750,000
Expense = $2,000,000 * (1 + 8%)^(1) = $2,160,000
Cash Flow = ($15,750,000 - $2,160,000) * (1 - 0.34) = $10,182,000
PV = $10,182,000 / (1 + 0.12)^1 = $9,112,500
Year 2: (Follow the same steps as Year 1 to calculate the cash flow and PV)
Repeat the process for Years 3 to 6.
Finally, calculate the NPV:
NPV = $9,112,500 + PV(Year 2) + PV(Year 3) + PV(Year 4) + PV(Year 5) + PV(Year 6) - $45,500,000
If the NPV is positive, the investment is valuable. If it is negative, the investment would not be considered worthwhile.
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Case Study: Kingfisher Airlines (KFA) launched its domestic air service operations in May 2005. KFA was promoted by the UB Group and was positioned as a budget carrier that offered a single class- "Kingfisher Class'. KFA was one among the very few airlines which offered discounted ticket prices with its aggressive pricing strategy. KFA successfully leveraged the youthful and vibrant image of its Kingfisher Beer brand and called its airlines as 'Funliners' to emphasize the fun-filled experience. It had targeted most of the customers in the age group of 25-40 years. Within the first six months of its launch, KFA managed to corner a 6% market share in the domestic air travel market. KFA also had plans to operate on international routes. However, the increasing popularity of low-cost airlines like Air Deccan, launch of new low-cost carriers like SpiceJet and GoAir, and Jet Airways' acquisition of Air Sahara, further intensified the competition in the Indian aviation sector. In an effort to make KFA profitable at the earliest, KFA modified its 'single class' approach and began to offer an upgraded business class service- 'Kingfisher First'.
a. Discuss the marketing techniques adopted by Kingfisher Airlines.
b. Understand the opportunities and challenges for a newly established airline in the Indian aviation industry.
Kingfisher Airlines adopted several marketing techniques to promote its services and attract customers.
Firstly, they positioned themselves as a budget carrier by offering discounted ticket prices through an aggressive pricing strategy. This allowed them to target customers in the age group of 25-40 years who were looking for affordable air travel options. Secondly, Kingfisher Airlines leveraged the strong brand image of their Kingfisher Beer brand to create a youthful and vibrant image for their airlines. They called their airlines 'Funliners' to emphasize the fun-filled experience that passengers could expect.
Lastly, in an effort to increase profitability, Kingfisher Airlines modified their approach and started offering an upgraded business class service called 'Kingfisher First'. This allowed them to cater to customers who were willing to pay more for enhanced comfort and services. Overall, Kingfisher Airlines had to navigate the competitive landscape while capitalizing on the growing demand for air travel to establish a strong position in the Indian aviation industry.
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which of the following best explains why raising the required reserve ratio results in a decrease in the money supply? responses the inflation rate goes up and people spend less money. the inflation rate goes up and people spend less money. banks charge higher interest rates that make loans less affordable to many people. banks charge higher interest rates that make loans less affordable to many people. banks have less incentive to give loans because they make less profit on these loans. banks have less incentive to give loans because they make less profit on these loans. banks must loan out a smaller portion of their reserves, resulting in fewer loans.
The most accurate explanation among the options provided is: banks must loan out a smaller portion of their reserves, resulting in fewer loans.
When the required reserve ratio is raised, it means that banks are required to hold a higher percentage of their deposits as reserves, which they cannot lend out. This reduces the amount of money available for banks to loan to individuals and businesses. As a result, there are fewer loans being issued, leading to a decrease in the money supply.
When banks have less incentive to give loans because they make less profit on these loans or when they charge higher interest rates that make loans less affordable to many people, it can indeed have an impact on the money supply, but those factors are not directly related to the raising of the required reserve ratio.
Now, let's examine why the other options are not the best explanations:
"The inflation rate goes up and people spend less money." This statement suggests a relationship between raising the required reserve ratio and inflation, but it does not explain why the money supply decreases specifically as a result of the reserve ratio change."Banks charge higher interest rates that make loans less affordable to many people." While this may be a consequence of higher reserve requirements, it does not directly explain why the money supply decreases. Higher interest rates may affect borrowing and spending behavior, but they are not the primary mechanism through which the reserve ratio impacts the money supply."Banks have less incentive to give loans because they make less profit on these loans." This statement describes a potential motivation for banks to reduce lending, but it does not directly address how the required reserve ratio affects the money supply. It focuses on the profitability aspect rather than the reserve requirement itself.Learn more about Money Supply here:
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As mentioned in Chapter 1 , one attribute of a project is that it involves a degree of uncertainty. Such uncertainty can impact the outcome of a project. A project manager must accept that risk is a part of project management and has to address it head-on. Furthermore, the project manager needs to set the tone for encouraging open and timely discussion of risks among the project team. 1. Describe what needs to be done to manage risk on a project. When should this be done? 2. How can a risk assessment matrix help in this process? 3. From your professional and / or adult experience working on projects, list and categorize three risks. Was the response plan for those projects adequate to mitigate these risks? How would you respond differently to these risks now?
Risk identification is a necessary skill for project managers. An occurrence or circumstance that negatively affects a project and cannot be completely avoided or managed is referred to be a risk.
The risk factors that affect a project must be understood by the project management. This necessitates a detailed comprehension of the project's scope, any scope adjustments, and any associated hazards.
A project manager must be able to explain and inform on the hazards that impact a project.
1. Recognizing dangers and comprehending how they could impact the project
2. Assessing probable hazards' effects using a matrix
3. Ranking hazards in order to select which ones should be handled first.
3.
1) The project wouldn't be finished on schedule.
2) The project would not be finished as affordably as anticipated.
3) The project wouldn't be successfully finished.
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You observe the market prices of European options written on a non-dividend paying stock
expiring in one month.
Exercise Price Call Price Put Price
X = $35 C35 = $7.93 P35 = $3.28
X = $45 C45 = $2.71 P45 = $8.04
a. Suppose you write a call option with X = $35 and buy a call with X = $45. Graph
the profit/loss of the individual call positions and the combined option portfolio as
a function of the stock price at the expiry. Also indicate at what stock price you
will just break even on the graph.
b. Now suppose you further buy a put option with X = $35 and write a put option
with X = $45 in addition to the call option positions in part a) – i.e., now your
portfolio consists of short call and long put with X = 35 and long call and short put
at X = 45. Graph the payoff of the individual option positions and the combined
option portfolio as a function of the stock price at the expiry.
c. In light of your answer in part b) above, what should be the one-month risk-free
rate to rule out any arbitrage.
Hint: The arbitrage-free one-month risk-free rate should be the same:
Rf = (risk-free cash flow in one month) / (initial cost of the risk-free investment)
for any risk-free investment generating a constant cash flow in one month.
Preferred to use excel. Thanks
To graph the profit/loss of the individual call positions and the combined option portfolio, we need to calculate the profit/loss at different stock prices at expiry.
For the call option with X = $35, the profit/loss is calculated as the difference between the call price ($7.93) and the exercise price ($35) if the stock price is greater than $35. If the stock price is less than or equal to $35, the profit/loss is zero.
For the call option with X = $45, the profit/loss is calculated as the difference between the exercise price ($45) and the call price ($2.71) if the stock price is greater than $45. If the stock price is less than or equal to $45, the profit/loss is zero.
To calculate the profit/loss of the combined option portfolio, we add the individual profit/loss of the call options.
To break even on the graph, the combined profit/loss should be zero. This occurs when the stock price is equal to the strike price of the call option with X = $35.
For part b), the profit/loss of the put options can be calculated in a similar manner. The profit/loss of the short put option with X = $45 is the difference between the put price ($8.04) and the exercise price ($45) if the stock price is less than $45. If the stock price is greater than or equal to $45, the profit/loss is zero.
To graph the combined option portfolio, we add the profit/loss of the individual call and put options.
In part c), to rule out any arbitrage, the risk-free rate should be such that the initial cost of the risk-free investment is equal to the risk-free cash flow in one month. This ensures that there is no opportunity for risk-free profit. The specific calculation will depend on the details of the risk-free investment and its cash flow.
Overall, these calculations and graphs help analyze the potential profit/loss and risk associated with different option strategies at different stock prices. This information can be useful for making informed investment decisions.
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The profit/loss of the individual call positions and the combined option portfolio can be graphed, we need to calculate the profit/loss at different stock prices.
For the call option with X = $35, the profit/loss is the difference between the market price (C35 = $7.93) and the initial cost of writing the call option. If the stock price at expiry is below $35, the call option expires worthless and the profit/loss is the initial cost. If the stock price is above $35, the profit/loss is the market price minus the initial cost.
For the call option with X = $45, the profit/loss is the difference between the market price (C45 = $2.71) and the initial cost of buying the call option. If the stock price at expiry is below $45, the profit/loss is the market price minus the initial cost. If the stock price is above $45, the call option expires worthless and the profit/loss is the initial cost.
To graph the combined option portfolio, we add the profit/loss of the two call options at each stock price. The breakeven point is the stock price at which the profit/loss is zero. We find this point by setting the profit/loss equation equal to zero and solving for the stock price.
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what business type is a business owned by individual, therefore subject to a limited life and unlimited liability?
The business type that is owned by an individual and is subject to a limited life and unlimited liability is a sole proprietorship.
In a sole proprietorship, a single individual owns and operates the business. This individual is personally liable for all the business's debts and obligations. This means that if the business incurs debts or faces legal liabilities, the owner's personal assets can be at risk.
Additionally, a sole proprietorship has a limited life. The existence of the business is directly tied to the life of the owner. If the owner chooses to retire, sell the business, or passes away, the sole proprietorship typically ceases to exist.
Sole proprietorships are often relatively easy and inexpensive to set up and maintain, making them a common choice for small businesses or individuals starting their entrepreneurial ventures. However, the unlimited liability and limited life aspects can pose risks to the owner's personal finances and the continuity of the business.
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western nations’ concerns with huawei (and china as a whole) focus on what cultural variation?multiple choicelanguagetime orientationinterpersonal spacelaw and political stabilityreligion
Western nations, particularly the US, have expressed concerns about Huawei's potential threat to national security due to alleged influence from the Chinese government and fears of technology espionage.
The concerns of Western nations with Huawei and China, as a whole, focus on the cultural variation of law and political stability. Political and legal factors have played a vital role in the relationships between Huawei and Western countries, especially the United States. The US government has repeatedly accused Huawei of being a threat to national security. The U.S. government has stated that Huawei's operations are a danger to national security and that the Chinese Communist Party has influenced the company's operations. Huawei has repeatedly denied any links to the Chinese government or the military. The US government has raised concerns about the potential for Huawei to use its technology to spy on other countries. The US has also banned its companies from using Huawei technology due to these concerns. The US government has also encouraged other countries to follow suit. The political and legal factors play an important role in the relationships between Huawei and Western countries. They are focused on ensuring that their country's security is not compromised by the activities of Huawei or other Chinese companies.For more questions on Chinese government
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Exercise 16-12A (Algo) Determining the payback period LO 16-4 Zachary Airline Company is considering expanding its territory. The company has the opportunity to purchase one of two different used airplanes. The first airplane is expected to cost $13,250,000; it will enable the company to increase its annual cash inflow by $5,300,000 per year. The plane is expected to have a useful life of five years and no salvage value. The second plane costs $40,020,000; it will enable the company to increase annual cash flow by $8,700,000 per year. This plane has an eight-year useful life and a zero salvage value. Required a. Determine the payback period for each investment alternative and identify the alternative Zachary should accept if the decision is based on the payback approach. (Round your answers to 1 decimal place.)
Zachary Airline Company should go with the first aircraft. First aircraft payback period: 2.5 years. Second aircraft payback period: 4.6 years.
Payback period is defined as the length of time it takes for a project's initial investment to be paid off through the inflow of cash generated by the project. It's a simple method of evaluating the time it takes to recover an investment's initial costs. we'll start with an explanation of the payback period. Payback Period The payback period is a capital budgeting metric that calculates the length of time it takes for a project to recover its initial investment.
This duration is determined by adding up the project's expected cash inflows until they equal the project's initial investment. The payback period formula is as follows: Payback period = Initial investment / Expected annual cash inflow To determine the payback period for Zachary Airline Company, we'll have to find the payback period for both aircraft and compare them. Let's begin with the first aircraft. Payback Period for the first aircraft = $13,250,000/$5,300,000= 2.5 years. Payback Period for the second aircraft= $40,020,000/$8,700,000= 4.6 years. Based on the payback approach, the first aircraft is preferable to the second since it has a shorter payback period. Therefore, Zachary Airline Company should go with the first aircraft.
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1. You are evaluating a bond with 25 years to maturity that is callable in 3 years. The bonds YTM is 4.6% and the YTC is 7.8%. This bond is likely to be called in 3 years. True or False?
2. You are offered the opportunity to purchase a 6% coupon bond with 15 years remaining until maturity for $1105.40. Based on this, the Yield-to-Maturity for this bond is?
In this given case, the bond has a lower yield to maturity of 4.6% compared to its yield to call of 7.8%. The issuer of the bond would save a lot of money by calling the bond in 3 years because it can be called at a premium to the face value and can be re-issued at a lower yield than the current yield to maturity of 4.6%.
1. The statement is true.
Therefore, it is likely that the bond will be called, and the investor must consider this possibility before investing in this bond.
2. The Yield-to-Maturity (YTM) for the bond is 4.19%. Yield to Maturity is the interest rate at which the present value of all future cash flows from a bond is equal to its current price. In this case, the bond has a face value of $1000, a coupon rate of 6%, and is trading at a price of $1105.40.
The annual coupon payment is $60 (=$1,000 * 6%), which will be paid for 15 years. At maturity, the investor will also receive the face value of the bond, which is $1000.Using the financial calculator, we can find the YTM of the bond by calculating I/Y. The YTM of the bond is 4.19%.
Therefore, the Yield-to-Maturity (YTM) for the bond is 4.19%.
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