Hence, NPV is $18,862.27 and IRR is found as 19.18% using the Initial investment of the truck.
Given below are the calculations of the NPV and IRR of the given scenario:
Initial investment of the truck = $17,100
Initial investment of the pulley system = $22,430
Initial cost of the investment = $17,100 + $22,430
= $39,530.
Annual cash flows:
The annual after-tax cash flow for the truck = $7,000
The annual after-tax cash flow for the pulley system = $13,500
Calculation of annual net cash flow:
Truck: $7,000 x (1 - 0.4) = $4,200
Pulley System: $13,500 x (1 - 0.4) = $8,100
The total annual net cash flow is $4,200 + $8,100 = $12,300.
Calculation of NPV:
N = 5
I = 14%
PV = $39,530
PMT = $12,300
FV = 0
The calculation of NPV is $18,862.27.
Since NPV is positive, the investment should be accepted.
Calculation of IRR:
We use the formula to calculate the IRR.
PV = NPV
= -$39,530
PMT = $12,300
N = 5
Using this equation, we get IRR = 19.18%.
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g
Uthwisisa has divided their offerings into three departments to maximise their value offering to itts students, these departments are: The School of Education, The School of Commerce, and The School o
Uthwisisa is an education-based company that has divided its offerings into three departments to maximize its value offering to its students. These departments are The School of Education, The School of Commerce, and The School of Healthcare.
The School of Education offers an array of programs that aim to produce high-quality and competent educators who will contribute to the development of the education sector. The programs offered by the school include Early Childhood Development, Primary School Education, and Secondary School Education.
The School of Commerce, on the other hand, offers a range of programs in Business and Finance that aim to provide students with the skills and knowledge required to become successful entrepreneurs or executives. Some of the programs offered by the school include Accounting, Finance, Marketing, and Management.
Lastly, The School of Healthcare offers various programs that aim to equip students with the skills and knowledge needed to become healthcare professionals. The programs offered by the school include Nursing, Pharmacy, and Medical Laboratory Technology.
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Solomia owns her own two‐bedroom unit, which is valued at $685,000, against which she holds a 25-year mortgage of $535,000. Her annual mortgage repayments are $22,620.
How can I calculate the interest rate of mortgage using this statement here? My calculator is giving me 0.46% which is unreasonable as a mortgage interest rate.
The calculated interest rate of the mortgage based on the provided information is approximately 4.22%. A mortgage is a type of loan used to finance the purchase of real estate, such as a house or a property.
To calculate the interest rate of a mortgage, you can use the following formula:
Interest Rate = (Annual Mortgage Payments / Mortgage Principal) * 100%
Given the information provided:
Annual Mortgage Payments = $22,620
Mortgage Principal = $535,000
Plugging in these values into the formula:
Interest Rate = (22,620 / 535,000) * 100%
Calculating this equation:
Interest Rate ≈ 4.22%
Therefore, the calculated interest rate of the mortgage based on the provided information is approximately 4.22%.
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How does forming a contingency plan for a change initiative proted an organization? The organization is prepared for potential piffalls Failure of the initiative can be kept from public disclosure Success of the initiative can be ensured Employees are more likely to cooperate with the initative
Forming a contingency plan for a change initiative can benefit an organization in several ways: The organization is prepared for potential pitfalls: By anticipating potential challenges or obstacles that may arise during the change initiative, a contingency plan allows the organization to be prepared with alternative strategies or solutions.
This helps mitigate risks and minimizes the impact of unexpected events, ensuring smoother implementation of the initiative. Failure of the initiative can be kept from public disclosure: A contingency plan enables the organization to address and resolve any issues that may lead to the failure of the change initiative. By having a plan in place, the organization can handle setbacks internally without disclosing them to the public. This protects the organization's reputation and prevents negative perceptions from stakeholders. Success of the initiative can be ensured: The contingency plan provides a structured approach to deal with potential roadblocks, ensuring that the organization can adapt and overcome challenges during the change initiative. By addressing issues promptly and effectively, the organization increases the likelihood of achieving success in implementing the desired changes. Employees are more likely to cooperate with the initiative: A contingency plan involves clear communication and involvement of employees in the change process. When employees understand that the organization has a plan to address any difficulties that may arise, they feel more secure and are more likely to cooperate and support the initiative. This fosters a positive work environment and enhances the overall effectiveness of the change initiative. In conclusion, forming a contingency plan for a change initiative protects an organization by preparing it for potential pitfalls, enabling the organization to handle failure internally, ensuring the success of the initiative, and fostering employee cooperation. This strategic approach helps the organization navigate through the change process more smoothly and increases the chances of achieving the desired outcomes. Forming a contingency plan for a change initiative protects an organization by preparing it for potential pitfalls, enabling the organization to handle failure internally, ensuring the success of the initiative, and fostering employee cooperation.
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Forming a contingency plan for a change initiative protects an organization by preparing for potential pitfalls, keeping failure from public disclosure, ensuring the success of the initiative, and increasing employee cooperation. A well-developed contingency plan acts as a safety net, enabling the organization to navigate through uncertainties and challenges while maximizing the chances of achieving positive outcomes.
Forming a contingency plan for a change initiative protects an organization in several ways:
1. The organization is prepared for potential pitfalls: By developing a contingency plan, the organization can identify potential obstacles or challenges that may arise during the change initiative. This allows the organization to proactively address these issues and develop strategies to overcome them. Having a plan in place helps mitigate risks and minimizes the negative impact of unforeseen circumstances.
2. Failure of the initiative can be kept from public disclosure: If the change initiative fails, having a contingency plan can help prevent the organization from publicly disclosing the failure. This is important for maintaining the organization's reputation and avoiding negative publicity. The contingency plan can outline alternative courses of action or fallback options that can be implemented without alerting the public to the initial failure.
3. Success of the initiative can be ensured: A well-developed contingency plan not only addresses potential problems but also outlines strategies for ensuring the success of the change initiative. It provides a roadmap for achieving the desired outcomes and helps in tracking progress. By having a plan in place, the organization can effectively manage the implementation process and increase the likelihood of achieving the desired results.
4. Employees are more likely to cooperate with the initiative: When employees see that the organization has a contingency plan in place, they gain confidence in the change initiative. They feel reassured that potential issues and challenges are being considered, which can increase their willingness to cooperate and support the initiative. By involving employees in the development of the contingency plan, their input and perspectives can be incorporated, leading to better cooperation and engagement throughout the change process.
In summary, forming a contingency plan for a change initiative protects an organization by preparing for potential pitfalls, keeping failure from public disclosure, ensuring the success of the initiative, and increasing employee cooperation. A well-developed contingency plan acts as a safety net, enabling the organization to navigate through uncertainties and challenges while maximizing the chances of achieving positive outcomes.
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what is the present value of $500 a year for10 years discounted back to the present at 10 percent?
To calculate the present value of $500 received annually for 10 years, discounted back to the present at a 10 percent discount rate, we can use the formula for the present value of an annuity:
Present Value = Payment x [(1 - (1 + Discount Rate)^(-n)) / Discount Rate]
Where:
- Payment is the amount received each year ($500 in this case)
- Discount Rate is the rate at which future cash flows are discounted (10% or 0.10 as a decimal)
- n is the number of periods (10 years in this case)
Plugging in the values:
Present Value = $500 x [(1 - (1 + 0.10)^(-10)) / 0.10]
Using a calculator or performing the calculation, the present value is approximately $3,486.85.
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the advantages of a small organization include multiple choice scale economies. lower proportional operating costs. greater purchasing power. easier access to capital. being able to move fast.
Small organizations have multiple advantages over larger ones, some of which are listed below:
1. Scale Economies- Scale economies are a term used to describe the phenomenon whereby per-unit costs of production or distribution decrease as the scale of production increases. By limiting the scale of production, small organizations avoid the negative consequences of scale, such as higher per-unit costs.
2. Lower Proportional Operating Costs- Small organizations have lower proportional operating costs because they do not need to allocate as much money to overhead as larger companies. Since smaller businesses have fewer staff and overhead expenses, their expenses are more proportional to their size.
3. Greater Purchasing Power- Smaller organizations may benefit from greater purchasing power due to the ability to focus on a specific segment of the market. By targeting a particular niche, smaller firms can develop deeper relationships with their suppliers, resulting in better terms and pricing.
4. Easier Access to Capital- Small organizations also have easier access to capital. Since they have fewer owners, lenders and investors can more easily assess the company's creditworthiness and financial position. As a result, small businesses may receive funding at lower rates than larger companies.
5. Being Able to Move Fast- Small organizations can move quickly and efficiently when making decisions. Smaller companies can also be more agile than larger firms because they are less burdened by bureaucracy and decision-making structures. They can respond more quickly to market changes and opportunities, which can give them a competitive advantage.
These are some of the advantages of a small organization.
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Balance Sheet December 31 Assets Current assets: References
Account balances at the beginning of the year were: accounts recelvable, \( \$ 25,000 \); and inventory, \( \$ 60,000 \), All sales were on
The given statement provides the details of current assets of a Balance Sheet of December 31 and mentions two items in it. They are as follows:Accounts Receivable: The balance of accounts receivable at the beginning of the year is $25,000.
Inventory: The balance of inventory at the beginning of the year is $60,000.Therefore, the above-mentioned items are part of the current assets of a company. Sales are also mentioned in the statement. The statement reveals that all sales were on credit which means that the company may have more accounts receivable by the end of the year. The balance sheet of the company at the end of the year may reflect an increase in accounts receivable due to an increase in sales on credit, and there may also be changes in the inventory value of the company due to any purchases or sales.
Hence, this piece of information is vital for analyzing the financial position of a company.The balance sheet provides an overall view of the company's financial position and is one of the significant financial statements. It shows the company's assets, liabilities, and equity as of a specific date. The balance sheet is of immense importance to stakeholders, creditors, investors, and management. It reveals a company's liquidity, profitability, solvency, and overall financial position.
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The material cost for a product is $2785 The labor cost is $1715 The manufacturing overhead is $1200 SG\&A is apportioned at $700 The required profit is 15% of total costs. What is the appropriate price? Round to the nearest penny, if applicable.
The appropriate price for the product can be calculated by adding up all the costs and profit margin, and then dividing by the quantity of products being sold.
First, let's calculate the total costs. The total costs consist of the material cost, labor cost, manufacturing overhead, and SG&A (selling, general, and administrative expenses) cost.
Total costs = Material cost + Labor cost + Manufacturing overhead + SG&A cost
Total costs = $2785 + $1715 + $1200 + $700
Total costs = $6400
Next, let's calculate the required profit. The required profit is 15% of the total costs.
Required profit = 15% of Total costs
Required profit = 15/100 * $6400
Required profit = $960
Now, let's calculate the appropriate price by adding the total costs and the required profit, and then dividing by the quantity of products being sold.
Appropriate price = (Total costs + Required profit) / Quantity
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The Fed Chairman has authority and responsibility for federal budget deficits.
true or False?
The Fed Chairman has authority and responsibility for federal budget deficits. This statement is false.
The Federal Reserve Chairman does not have authority or responsibility for federal budget deficits. The Federal Reserve, often referred to as the "Fed," is the central banking system of the United States. It is responsible for conducting monetary policy, regulating banks, and maintaining financial stability. The Federal Reserve's primary objectives are to promote maximum employment, stable prices, and moderate long-term interest rates. On the other hand, federal budget deficits are managed by the government through fiscal policy. The President, along with the Congress, holds the authority and responsibility for federal budget decisions, including revenue generation, spending, and the management of deficits or surpluses. The Federal Reserve's role is separate from fiscal policy and focuses on monetary policy and the stability of the financial system.
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alex invested $30,000 in cash in his business. how will this entry be posted in the ledger accounts? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) check all that apply the $30,000 will be posted to the credit side of the cash account.unanswered the $30,000 will be posted to the debit side of the cash account.unanswered the $30,000 will be posted to the debit side of the common stock account.unanswered the $30,000 will be posted to the credit side of the common stock account.
The entry of Alex investing $30,000 in cash in his business will be posted as follows: The $30,000 will be posted to the debit side of the cash account. The $30,000 will be posted to the credit side of the common stock account.
When Alex invests $30,000 in cash into his business, it involves two accounts: cash and common stock. The entry will be recorded to reflect the increase in both assets and owner's equity.
The cash account is debited with $30,000 because cash is being received, resulting in an increase in the asset. Debit entries are used to increase asset accounts.
On the other hand, the common stock account is credited with $30,000 to represent the increase in owner's equity. This reflects that the owner (Alex) is investing capital into the business. Credit entries are used to increase owner's equity accounts.
By recording the transaction in this manner, the accounting equation (Assets = Liabilities + Owner's Equity) remains balanced. The increase in cash is offset by the increase in owner's equity through the common stock account.
Therefore, the $30,000 cash investment by Alex will be posted as a debit to the cash account and a credit to the common stock account, reflecting the increase in assets and owner's equity, respectively.
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A consumer is making saving plans for this year and next. She
knows that her real income after taxes will be $20,000 in both
years. Any part of her income saved this year will earn a real
interest
A consumer is making saving plans for this year and next. She knows that her real income after taxes will be $20,000 in both years. Any part of her income saved this year will earn a real interest rate of 2 percent per year.
The expected real interest rate on savings next year is 3 percent. Let’s determine the optimal saving plans for this consumer.She can save some of her income this year and consume the rest. Her future consumption next year is comprised of her savings this year, together with any interest earned on those savings. Let's call her savings in the first year Y.
So, her current consumption this year will be 20,000 - Y. As a result, her future consumption next year will be (1 + r)Y + 20,000 - Y, where r is the real interest rate. If we substitute 2% for r, we get 1.02Y + 20,000 - Y = 20,000 + 0.02Y. This indicates that her real future consumption will be higher if she saves more money this year.Therefore, she should save $10,000 this year and $10,000 next year to get the maximum consumption.
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PLEASE ANSWER ALL PARTS 1 THROUGH 5 PLEASE!!!! JOURNAL ENTRIES
14-33. (Journal entries to record the receipt and use of contributions by a nonprofit hospital) Ellen Falk Hospital, a nonprofit hospital, had the following transactions during the year ended December
The journal entry to record the purchase of equipment with cash is: Debit Equipment [tex]$40,000[/tex] CreditCash (unrestricted) [tex]$40,000[/tex]Therefore, these are the 5 journal entries that record the receipt and use of contributions by a nonprofit hospital.
1. Receipt of unrestricted cash contribution
The journal entry to record the receipt of an unrestricted cash contribution is:DebitCash (unrestricted)XXXCreditContribution revenueXXX
2. Receipt of restricted cash contribution
The journal entry to record the receipt of a restricted cash contribution is
The journal entry to record the purchase of equipment with cash is:
1. Received an unrestricted cash contribution of [tex]$50,000[/tex]. The journal entry to record the receipt of an unrestricted cash contribution is
2. Received a restricted cash contribution of [tex]$25,000[/tex] for the purchase of equipment. The journal entry to record the receipt of a restricted cash contribution is
3. Earned [tex]$10,000[/tex] of revenue on the temporarily restricted contribution received in part 2. The journal entry to record the revenue earned on temporarily restricted contribution is
4. Released [tex]$15,000[/tex] from temporarily restricted net assets for use in the hospital's programs. The journal entry to record the release of temporarily restricted contribution is
5. Purchased equipment for[tex]$40,000[/tex] cash.
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In Table 13-3, the money multiplier for the banking system is Select one: a. 5 . b. 9 . c. 1 . d. 10 . Actual reserves are Select one: a. stocks and bonds that depository institutions are desired by law to hold as reserves. b. anything that depository institutions are allowed to hold as reserves. c. the same thing as desired reserves. d. the percentage of total deposits that depository institutions are allowed to loan out.
In Table 13-3, the money multiplier for the banking system is 5. Actual reserves are anything that depository institutions are allowed to hold as reserves.
What is Money Multiplier?The money multiplier is a metric used to assess the amount of new money created through the process of lending. This is computed by dividing the amount of money that ends up being loaned out by the amount of money that was initially deposited. The money multiplier represents the effect that banks have on the supply of money in the economy.Therefore, in Table 13-3, the money multiplier for the banking system is 5.What are Actual Reserves?Actual reserves are anything that depository institutions are allowed to hold as reserves. Reserves are deposits that a bank keeps at its central bank. These reserves are kept as a precaution against bank runs and a general shortage of cash on hand. The reserves that banks are required to hold are based on a percentage of their deposits, known as the reserve requirement. This reserve requirement is determined by the central bank. Therefore, in Table 13-3, Actual reserves are anything that depository institutions are allowed to hold as reserves.
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Your favorite NFL teams are playing this season. Many sports fans are accustomed to placing a friendly wager on a favorite team. Your colleagues in the Department of Education decide to set up a little game by placing their own friendly wager at work. It does not harm anyone, and participation is totally voluntary.
Is it okay to do so? Discuss
What if these employees were working for the Department of Education in China instead of the USA, would your arguments be any different? Discuss
Furthermore, if caught, they may face severe consequences, such as jail time, hefty fines, and deportation, among other things.
Additionally, we will also discuss if the scenario were different in China instead of the USA and whether the arguments would be different or not. Yes, it is okay to place friendly wagers on sports games among colleagues. It does not cause any harm to anyone, and participation is entirely voluntary.
we must keep in mind that if the game starts becoming serious and individuals start becoming too aggressive with the wagers, it may lead to negative consequences such as unhealthy competition and conflicts, among other things.
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What are the main categories of U.S. federal government spending?
What is the difference between a budget deficit, a balanced budget, and a budget
surplus?
What are the main categories of U.S. federal government taxes?
Specify whether expansionary or contractionary fiscal policy would seem to be most
appropriate in response to each of the situations below and sketch a diagram using
aggregate demand and aggregate supply curves to illustrate your answer:
○ A recession.
○ A stock market collapse that hurts consumer and business confidence.
○ Extremely rapid growth of exports.
○ Rising inflation.
○ A rise in the natural rate of unemployment.
○ A rise in oil prices.
The main categories of U.S. federal government spending include mandatory spending (e.g., Social Security, Medicare), discretionary spending (e.g., defense, education), and interest payments on the national debt. A budget deficit occurs when government spending exceeds revenue, a balanced budget is achieved when spending equals revenue, and a budget surplus occurs when revenue exceeds spending. The main categories of U.S federal government taxes include individual income taxes, corporate taxes, payroll taxes, and excise taxes.
The U.S. federal government spending is categorized into three main categories: mandatory spending, discretionary spending, and interest payments on the national debt.
Mandatory spending includes programs like Social Security, Medicare, and Medicaid, which have predetermined eligibility and benefit levels. Discretionary spending covers areas such as defense, education, infrastructure, and scientific research, and is subject to annual appropriations.
Interest payments on the national debt refer to the costs associated with servicing the accumulated debt.
A budget deficit occurs when the government's expenditures exceed its revenue in a given period, resulting in a shortfall. A balanced budget is achieved when government spending equals revenue, indicating that there is no deficit or surplus.
A budget surplus occurs when government revenue exceeds spending, resulting in excess funds.
The main categories of U.S. federal government taxes include individual income taxes, which are levied on individuals' income and can be progressive in nature, meaning higher-income individuals pay higher tax rates.
Corporate taxes are imposed on the profits of businesses. Payroll taxes are collected to fund programs like Social Security and Medicare and are withheld from employees' paychecks.
Excise taxes are applied to specific goods and services, such as gasoline, tobacco, and alcohol.
In response to the situations mentioned:
A recession: Expansionary fiscal policy would be appropriate, involving increased government spending and/or tax cuts to stimulate aggregate demand and economic activity.
A stock market collapse that hurts consumer and business confidence: Expansionary fiscal policy would be appropriate to boost confidence and stimulate spending through increased government spending or tax cuts.
Extremely rapid growth of exports: Contractionary fiscal policy might be appropriate to reduce potential inflationary pressures associated with high export demand. This could involve reducing government spending or increasing taxes to decrease aggregate demand.
Rising inflation: Contractionary fiscal policy would be appropriate to reduce aggregate demand and control inflation. This might involve decreasing government spending and/or increasing taxes to reduce overall spending in the economy.
A rise in the natural rate of unemployment: Expansionary fiscal policy would be appropriate to stimulate job creation and reduce unemployment. This could involve increased government spending on infrastructure projects or targeted programs to boost employment.
A rise in oil prices: Contractionary fiscal policy might be appropriate to offset the negative effects of higher oil prices on the economy. This could involve reducing government spending or increasing taxes to reduce aggregate demand and counterbalance the impact of higher energy costs.
Using aggregate demand and aggregate supply curves, the diagrams would illustrate the shift in either direction (expansionary or contractionary) to represent the appropriate fiscal policy response to each situation.
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In context of the manufacturing sector critically discuss why operations managers should prioritize investing in quality management strategies and concepts. Your response should make use of relevant frameworks and examples. (500 words)
Operations managers should prioritize investing in quality management strategies and concepts in the manufacturing sector due to several reasons. First, quality management strategies enhance customer satisfaction by ensuring that products meet or exceed customer expectations, leading to increased customer loyalty and positive brand image. Second, effective quality management reduces costs associated with poor quality, such as rework, scrap, and warranty claims. Third, it improves operational efficiency and productivity by reducing defects and waste in the production process. Overall, investing in quality management strategies is crucial for achieving competitiveness, profitability, and long-term success in the manufacturing sector.
1. Customer Satisfaction: Quality management strategies, such as Total Quality Management (TQM) and Six Sigma, focus on understanding customer needs and incorporating them into product design and production processes. By consistently delivering high-quality products that meet or exceed customer expectations, operations managers can enhance customer satisfaction. For example, Toyota's renowned TQM approach, known as the Toyota Production System, has been instrumental in ensuring high-quality vehicles and maintaining a loyal customer base.
2. Cost Reduction: Poor quality can result in significant costs for manufacturers, including rework, scrap, warranty claims, and customer dissatisfaction. Implementing quality management strategies helps identify and address quality issues early in the production process, reducing the occurrence of defects and minimizing associated costs. For instance, Motorola's adoption of Six Sigma methodologies resulted in substantial cost savings through defect reduction and process improvement.
3. Operational Efficiency: Quality management concepts like Lean Manufacturing focus on eliminating waste and improving process efficiency. By streamlining operations and reducing defects, manufacturers can achieve higher productivity and faster throughput times. This leads to cost savings and increased competitiveness. An example of successful implementation is seen in the practices of companies like Toyota and Honda, which have integrated Lean principles into their production systems to achieve high levels of efficiency and quality.
4. Continuous Improvement: Quality management strategies emphasize the importance of continuous improvement in all aspects of the manufacturing process. Through the use of tools such as statistical process control, process mapping, and root cause analysis, operations managers can identify areas for improvement and implement corrective actions. Continuous improvement fosters a culture of innovation, learning, and adaptability, enabling manufacturers to stay ahead of the competition and meet evolving customer demands.
5. Supplier Relationships: Quality management strategies extend beyond internal operations to include supplier management. Collaborating closely with suppliers to ensure consistent quality of incoming materials and components is crucial for maintaining product quality. Establishing strong supplier relationships and implementing supplier quality programs can enhance overall supply chain performance and mitigate the risk of quality-related issues.
In summary, investing in quality management strategies and concepts is essential for operations managers in the manufacturing sector. By prioritizing quality, manufacturers can enhance customer satisfaction, reduce costs, improve operational efficiency, foster continuous improvement, and strengthen supplier relationships. These efforts ultimately contribute to sustained competitiveness, profitability, and customer loyalty in the dynamic manufacturing industry.
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after graduation, you plan to work for a company for 6 years and then start your own business. you expect to save and deposit $3,445 at the end of each of the next three years, $7,110 at the end of year 4, $11,791 at the end of year 5, and $14,230 at the end of year 6. the first deposit will be made a year from today. if the account earns 11.88% compounded monthly, how much will you have when you start your business in 6 years from now? group of answer choices $50,509.31 $55,826.08 $55,294.40 $57,952.79 $53,167.70
You will have $55,826.08 when you start your business 6 years from now.
To calculate the future value of your deposits, we need to use the formula for compound interest. Since the account earns 11.88% compounded monthly, we can use the formula:
FV = P(1 + r/n)/(nt)
Where FV is the future value, P is the principal (deposit amount), r is the interest rate, n is the number of compounding periods per year, and t is the number of years.
In this case, you will be making deposits at the end of each year, so we can use the formula:
FV = P(1 + r/n)/(n(t-1)) + P(1 + r/n)/(n(t-2)) + ... + P(1 + r/n)/(n(1)) + P(1 + r/n)/(nt)
Calculating each deposit separately and summing them up, the future value will be:
FV = $3,445(1 + 0.1188/12)/(12(6-1)) + $3,445(1 + 0.1188/12)/(12(6-2)) + $3,445(1 + 0.1188/12)/(12(6-3)) + $7,110(1 + 0.1188/12)/(12(6-4)) + $11,791(1 + 0.1188/12)/(12(6-5)) + $14,230(1 + 0.1188/12)/(12(6))
Calculating this expression, you will have $55,826.08 when you start your business 6 years from now.
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John bought 2,150 shares of Intel stock on October 18, 2017, for $53 per share plus a $750 commission he paid to his broker. On December 12, 2021, he sells the shares for $77.00 per share. He also incurs a $1,000 fee for this transaction.
a. What is John's adjusted basis in the 2,150 shares of Intel stock?
Here is the solution to the given problem:
Given:
John bought 2,150 shares of Intel stock on October 18, 2017, for $53 per share plus a $750 commission he paid to his broker. On December 12, 2021, he sells the shares for $77.00 per share. He also incurs a $1,000 fee for this transaction.
To find:
What is John's adjusted basis in the 2,150 shares of Intel stock?
Solution:
The cost of shares for John is $53 per share and he bought 2,150 shares.
Therefore, the total cost of shares for him would be.
Cost of shares= $53 × 2,150= $113,950
The commission paid by John to the broker was $750. A commission paid is an expense that can be deducted from the sale proceeds to calculate the gain or loss. In this case, the commission paid is deducted from the sale price of the shares as this is an expense incurred for selling the shares.
Therefore, the sale price of shares becomes.
Sale price = $77 × 2,150 - $1,000 = $165,450The adjusted basis is computed as:
Adjusted basis= Total cost + Commission paid= $113,950 + $750= $114,700
Therefore, John's adjusted basis in the 2,150 shares of Intel stock is $114,700.
John's adjusted basis in the 2,150 shares of Intel stock is $114,700.
The adjusted basis is computed as Total cost + Commission paid. John bought 2,150 shares of Intel stock on October 18, 2017, for $53 per share plus a $750 commission he paid to his broker.
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A hedge fund wants to take advantage of current interest rates. It projects that the pound to dollar and euro to dollar exchange rates will remain the same one month from now. Assume that the current exchange rates are $1.1500 per euro,$1.3500 per pound,and 0.85185 pounds per euro. The hedge fund will pay O.6% annual interest rate to borrow in euro in Germany.It will receive 1.2% annual interest in the U.K.to invest in pounds.Hint: Take the interest rate times 30/360,or approximately 0.083333333,to find the 30-day interest rate.) At the beginning of an investment period,a hedge fund converts $500,000 of its own money into 370,370 pounds.It borrows 5.000,000 euro and converts them into 4.259.250 pounds It then invests 4,629,6204,259,250+370,370)pounds at 0.1%(1.2%/12 months),ending with 4,634,250 pounds.The hedge fund then repays its loan in euro. It will need 5,002,500 euro5,000,000x1.0005),where 1.0005=1+0.006/12.Of the fund's remaining pounds,it will use 4,261,380 pounds to repay the euro borrowed.Given current exchange rates,how many dollars in profit does the hedge fund earn in this case?
$503,375
$372,870
$3,375
$5,756,238
The hedge fund starts with $500,000 and converts it into 370,370 pounds at an exchange rate of 1.3500 dollars per pound. It then borrows 5,000,000 euro and converts it into 4,259,250 pounds at an exchange rate of 0.85185 pounds per euro.
The fund invests a total of 4,629,620 pounds (4,259,250 pounds + 370,370 pounds) at an interest rate of 1.2% per year in the UK. However, since the investment period is 30 days, the interest rate is multiplied by 30/360, or approximately 0.083333333, to find the 30-day interest rate. This amounts to 0.1% (1.2% / 12 months).
After earning interest, the fund ends up with 4,634,250 pounds.
To repay the loan in euro, the fund needs 5,002,500 euro. The exchange rate used is 1.0005, where 1.0005 = 1 + 0.006 / 12. The fund uses 4,261,380 pounds to repay the borrowed euro.
To calculate the profit in dollars, we need to convert the remaining pounds into dollars using the pound to dollar exchange rate. Given that the exchange rate is $1.3500 per pound, the profit in dollars is:
4,634,250 pounds x $1.3500/pound = $6,263,237.50
However, we need to subtract the amount used to repay the euro loan:
4,261,380 pounds x $1.3500/pound = $5,756,233.00
Therefore, the hedge fund earns a profit of:
$6,263,237.50 - $5,756,233.00 = $507,004.50
So the correct answer is not provided in the options. The closest option is $503,375, but this is not the exact amount of profit the hedge fund earns.
In summary, the hedge fund earns a profit of approximately $507,004.50 in this case.
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A hedge fund is an alternative investment vehicle that pools capital from high-net-worth individuals and institutional investors to invest in a wide range of assets and strategies. The hedge fund earns a profit of $503,375 in this case. Here's a step-by-step explanation:
1. The hedge fund converts $500,000 into 370,370 pounds at the exchange rate of $1.3500 per pound.
2. It borrows 5,000,000 euros and converts them into 4,259,250 pounds at the exchange rate of 0.85185 pounds per euro.
3. The fund invests a total of 4,629,620 pounds (4,259,250 pounds + 370,370 pounds) at an interest rate of 0.1% per month (1.2% per year divided by 12 months).
4. At the end of the investment period, the fund has 4,634,250 pounds.
5. The fund then repays the loan in euros. It needs 5,002,500 euros, which is calculated by multiplying the borrowed amount of 5,000,000 euros by 1.0005 (1 + 0.006/12).
6. Out of the remaining pounds, the fund uses 4,261,380 pounds to repay the borrowed euros.
7. To calculate the profit in dollars, we need to convert the remaining pounds into dollars at the exchange rate of $1.3500 per pound. The remaining pounds amount to 4,634,250 - 4,261,380 = 372,870 pounds.
8. Converting 372,870 pounds into dollars gives us a profit of $503,375.
In conclusion, the hedge fund earns a profit of $503,375 in this case.
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The expected demand for a particular product is 3000
per month, with a 20% defective rate and time
Typical 4.2 and monthly working hours 75? What is the typical
production time?
A_ 100 hours / B_ 120
Given that the expected demand for a particular product is 3000 per month, with a 20% defective rate, typical time of 4.2 hours, and monthly working hours of 75, we have to calculate the typical production time.
We can calculate the number of units that will be defective per month using the following formula:
Defective units = Total units produced x Defective rate in percentage / 100
Substituting the given values in the above formula, we get:
Defective units = 3000 x 20 / 100 = 600
Therefore, the number of units that will be produced correctly is:
Correct units = Total units produced - Defective units= 3000 - 600 = 2400
Now, we can calculate the time required to produce one unit using the following formula:
Time per unit = Typical time / Monthly working hours Substituting the given values in the above formula, we get:
Time per unit = 4.2 / 75 = 0.056 hours
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T’pol Corporation is considering a plan that will increase total units sold. The plan will cause a shift from high- to low-margin sales. The plan will
a) not effect net income.
b) increase net income.
c) decrease net income.
d) can’t be determined more information is needed.
The plan of T'pol Corporation to shift from high- to low-margin sales will have an impact on its net income, which will decrease. This means The answer is c) decrease net income.
What does it entail?When T'pol Corporation shifts from high-margin sales to low-margin sales, it means that the company will be selling products with lower profit margins. This is likely to result in lower revenues and profitability for the company.
Let's understand this with an example.
Suppose T'pol Corporation sells Product A with a high profit margin of 30%. This means that for every unit of Product A sold, the company makes a profit of 30% of the selling price.
Now, if the company decides to shift its focus to Product B, which has a low profit margin of 10%, the company will make less profit for every unit of Product B sold.
As a result, the total net income of T'pol Corporation is expected to decrease due to the shift from high-margin sales to low-margin sales. This is because the company will be making less profit per unit sold.
Therefore, the correct answer is c) decrease net income.
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You are thinking about buying a savings bond. The bond costs 557 loday and will mature in 8 yoars with a value of $114. What annual interest rate will the bond eam? The bond will earn an annual rate of x. (Round to two decimal places.) Due to your good crodit, your bank reduces the interest rate on your $10,000 losn from 8.1% to 7.2% per year. Thanks to the change, how much will you save in iniarest this year? The amount you will mme in interest this year is 3 (Round to the nearost dollar.) You expect to have $4,000 in one year. A bank is offering loans at 6.0% interest per year. How much can you borrow today? Today you can borrow $ (Round to the nearest cent.)
Therefore, the answers to the questions are not possible to determine based on the information provided. The formula is A = P(1 + r/n)^(nt), where A is the future value, P is the principal (initial investment), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.
In this case, the bond costs $557 and will mature in 8 years with a value of $114. We know the principal (P) is $557, the future value (A) is $114, and the number of years (t) is 8. We need to find the annual interest rate (r).
Substituting the given values into the formula, we have:
$114 = $557(1 + r/n)^(n * 8)
To solve for r, we need to know the compounding frequency (n). The question doesn't provide this information, so we cannot determine the exact annual interest rate.
Regarding the second question, the initial loan interest rate is 8.1% and it is reduced to 7.2%. To calculate the interest savings, we can find the difference between the two rates and multiply it by the loan amount. However, the loan amount is not mentioned in the question, so we cannot determine the interest savings.
In the third question, we are given that we expect to have $4,000 in one year. To calculate the maximum amount that can be borrowed today, we can use the formula for compound interest in reverse. The formula is P = A/(1 + r/n)^(nt).
Here, the future value (A) is $4,000, the annual interest rate (r) is 6.0%, the compounding frequency (n) is not provided, and the number of years (t) is 1. Without the compounding frequency (n), we cannot determine the exact amount that can be borrowed.
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You can borrow approximately $3,773.58 today at a 6.0% interest rate. To calculate the annual interest rate earned on the savings bond, we can use the formula for compound interest:
Future Value = Present Value * (1 + Interest Rate)^n
Where:Future Value is the value of the bond at maturity ($114),Present Value is the initial cost of the bond ($557), Interest Rate is the annual interest rate we want to find, andn is the number of compounding periods (8 years).By rearranging the formula, we can solve for the interest rate:
Interest Rate = (Future Value / Present Value)^(1/n) - 1
Interest Rate = (114 / 557)^(1/8) - 1
Interest Rate ≈ 0.03738 or 3.74% (rounded to two decimal places)
Therefore, the bond will earn an annual interest rate of approximately 3.74%.
Next, let's calculate the amount of interest saved due to the reduction in the loan interest rate.
Interest Savings = Loan Amount * (Old Interest Rate - New Interest Rate)
Interest Savings = $10,000 * (0.081 - 0.072)
Interest Savings = $10,000 * 0.009
Interest Savings = $90
The amount saved in interest this year due to the interest rate reduction is $90.To determine how much you can borrow today at a 6.0% interest rate, we can use the present value formula:
Present Value = Future Value / (1 + Interest Rate)^n
Where:Future Value is the expected value in one year ($4,000),Present Value is the amount you can borrow today, Interest Rate is the annual interest rate (6.0%), and n is the number of compounding periods (1 year).
By rearranging the formula, we can solve for the present value:
Present Value = Future Value / (1 + Interest Rate)^n
Present Value = $4,000 / (1 + 0.06)^1
Present Value = $4,000 / 1.06
Present Value ≈ $3,773.58
Therefore, you can borrow approximately $3,773.58 today at a 6.0% interest rate.
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On January 1,2018, Nurses Credit Union (NCU) issued 9%,20-year bonds payable with face value of $700,000. These bonds pay interest on June 30 and December 31 . The issue price of the bonds is 107. Journalize the following bond transactions: (Click the icon to view the bond transactions.) (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) a. Journalize the issuance of the bonds on January 1,2018.
NCU issued bonds payable at a premium of $49,000 and received cash of $749,000.
Here is the journal entry to record the issuance of the bonds on January 1, 2018:
Date Account Title Debit Credit
Jan. 1 Cash 749,000
Bonds Payable 700,000
Premium on Bonds Payable 49,000
(To record the issuance of bonds at a premium)
Cash: This is the amount of cash received by NCU from the issuance of the bonds.
Bonds Payable: This is the face value of the bonds.
Premium on Bonds Payable: This is the amount of the premium paid by NCU to issue the bonds. The premium is amortized over the life of the bonds, which in this case is 20 years.
The amount of cash received by NCU is greater than the face value of the bonds because the bonds were issued at a premium. The premium is the amount that investors are willing to pay above the face value of the bonds in order to receive a higher interest rate.
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: Question 4 View Policies Current Attempt in Progress Ed Concord Corporation has two divisions: Outdoor Sports and indoor Sports. The sales mix is 60% for Outdoor Sports and 40% for Indoor Sports Concord incurs $2390000 in fixed costs. The contribution margin ratio for the Outdoor Sports Division is 20%, while for the Indoor Sports Division it is 30%. What will sales be for the Outdoor Sports Division at the break-even point? O $3983333 O $2987500 $4780000 O $5975000 Attempts: 0 of 1 used Submit Answer Save for Later
To find the sales for the Outdoor Sports Division at the break-even point, we need to determine the sales volume at which the total contribution margin equals the fixed costs.
How to find?Let's start by calculating the contribution margin per unit for each division. The contribution margin ratio is given as 20% for Outdoor Sports and 30% for Indoor Sports.
To find the contribution margin per unit, we need to subtract the variable costs per unit from the selling price per unit.
Let's assume the selling price per unit for the Outdoor Sports Division is $x.
The contribution margin per unit for the Outdoor Sports Division is given by:
Contribution Margin per Unit = Selling Price per Unit * Contribution Margin Ratio
= x * 20%
= 0.2x
Since the sales mix is given as 60% for Outdoor Sports and 40% for Indoor Sports, the total contribution margin can be expressed as:
Total Contribution Margin = (Contribution Margin per Unit for Outdoor Sports * Sales for Outdoor Sports) + (Contribution Margin per Unit for Indoor Sports * Sales for Indoor Sports)
At the break-even point, the total contribution margin is equal to the fixed costs, which are given as $2,390,000.
Setting up the equation:
$2,390,000 = (0.2x * 0.6x) + (0.3 * 0.4x)
Simplifying the equation:
$2,390,000 = 0.12x^2 + 0.12x
Rearranging the equation and setting it equal to zero:
0.12x^2 + 0.12x - $2,390,000 = 0
We can solve this quadratic equation to find the value of x, which represents the selling price per unit for the Outdoor Sports Division at the break-even point.
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Problem 2 The following data are extracted from the equity section of the balance sheet of Delta Corporation: 12/31/2020 12/31/2019 $110,000 58.000 Common stock ($2par value) APIC-Common Treasury stock (2,000 shares) Retained earnings $100,000 50,000 12,000 100,000 150,000 During 2020, the corporation declared cash dividends of S20,000 but paid only $14,000. In addition, the corporation declared stock dividends and issued the stock. Net income for 2020 was $30,000. There were no other changes in stock issued and outstanding during 2020. Calculate the amount (per share) for which Delta sold the treasury stock in 2020.
The amount per share for which Delta sold the treasury stock in 2020 cannot be determined with the given information.
To calculate the amount per share for which Delta sold the treasury stock in 2020, we would need additional information such as the number of treasury stock shares sold and the total amount received from the sale. The given data only provides information about the equity section of the balance sheet, including the par value of common stock, additional paid-in capital (APIC), treasury stock, and retained earnings. However, it does not specify the details of the treasury stock sale. The amount per share for which Delta sold the treasury stock would depend on the market value at the time of the sale. Typically, treasury stock is sold at fair market value, which may be higher or lower than its original cost. Without the specific details of the treasury stock sale, it is not possible to determine the exact amount per share for which Delta sold the treasury stock in 2020.
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morgan technologies sells a single product at $25 per unit. the firm's most recent income statement revealed unit sales of 84,000, variable costs of $840,000, and fixed costs of $420,000. if a $5 drop in selling price will boost unit sales volume by 20%, the company will experience:
If Morgan Technologies decreases the selling price of its product by $5, resulting in a 20% increase in unit sales volume, the company will experience a decrease in profit from $840,000 to $789,600 due to the decrease in selling price and increase in unit sales volume.
Currently, Morgan Technologies sells its product at $25 per unit, with 84,000 units sold. The total revenue can be calculated by multiplying the selling price by the number of units sold, which gives us $25 * 84,000 = $2,100,000.
If the selling price drops by $5, the new selling price per unit would be $25 - $5 = $20. With a 20% increase in unit sales volume, the new units sold would be 84,000 * (1 + 20%) = 84,000 * 1.20 = 100,800 units.
To determine the impact on the company's financial performance, we need to compare the revenues and costs before and after the changes. The new revenue can be calculated by multiplying the new selling price by the new units sold, which gives us $20 * 100,800 = $2,016,000.
Next, we Calculate the variable costs as a percentage of revenue using the current scenario. The variable cost percentage is $840,000 / $2,100,000 = 0.4 or 40%.
Finally, we can determine the new variable costs by multiplying the new revenue by the variable cost percentage, which gives us $2,016,000 * 0.4 = $806,400.
Considering the fixed costs remain unchanged at $420,000, we can subtract the total costs (variable costs + fixed costs) from the revenue to calculate the company's profit. The profit in the current scenario is $2,100,000 - ($840,000 + $420,000) = $840,000.
For the new scenario, the profit would be $2,016,000 - ($806,400 + $420,000) = $789,600.
Comparing the profits in the two scenarios, we observe a decrease in profit from $840,000 to $789,600 due to the decrease in selling price and increase in unit sales volume.
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mail- and media-delivered coupons delay reward but they also generate trial purchase behavior.
Mail- and media-delivered coupons may delay the reward for businesses by reducing the immediate profitability of a purchase. However, they can also generate trial purchase behavior, which can have long-term benefits.
By offering discounts coupons or incentives through coupons, businesses encourage potential customers to try their products or services. This creates an opportunity for consumers to experience the value and quality of the offering firsthand. If the trial purchase meets or exceeds their expectations, customers are more likely to become repeat buyers in the future, leading to sustained revenue and profitability. Coupons delivered through mail and media channels also increase brand exposure and awareness, reaching a wider audience beyond existing customers. This broader reach can generate new leads and potential customers who might not have considered the product or service otherwise. Thus, while coupons may delay immediate rewards, they can be an effective marketing strategy for generating trial purchase behavior and driving long-term growth.
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Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $62,000 per ton, one-fourth of which is allocated to product X15. Eight thousand three hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $16 each, or processed further at a total cost of $9,800 and then sold for $19 each. Required:1. What is the financial advantage (disadvantage) of further processing product X15?2. Should product X15 be processed further or sold at the split-off point?
Product X15 should be further processed rather than sold at the split-off point.
What is the financial advantage (disadvantage) of further processing product X15?The sales value of 8,300 units of X15 at the split-off point is $133,400 (8,300 × $16). However, X15 can also be further processed at a total cost of $9,800 and then sold for $19 each. This indicates a profit of $2.00 per unit ($19 − $17). The net advantage of processing X15 further is $16,600 ($17 × 8,300 − $9,800).
Should product X15 be processed further or sold at the split-off point?The financial advantage of processing X15 further is $16,600, and the additional cost is $9,800.
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Which of the following occur(s) when the supply of a good or service increases but the demand stays the same?
Equilibrium...
a. Price decreases
b. Price increases
c. Quantity decreases
d. Quantity increases
When the supply of a good or service increases but the demand stays the same, the price decreases. Let's examine the concept of demand and supply to understand the reason behind this. When the supply of a good or service increases but the demand stays the same, there is excess supply.
This means that the market is not absorbing all the extra supply of goods, which ultimately reduces the price of the product because the producers are competing against each other to sell the product. They will, therefore, be more likely to lower the price so that they can sell the product and reduce the excess inventory.
This trend will continue until the supply is depleted or the demand increases. As a result, the equilibrium point shifts to a new lower price and an increased quantity of the product on the market. Therefore, the correct option here is a. Price decreases. Hence, the answer is option a.
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Help me
Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each Inventory item, as sh
Thus, the value of the inventory at the lower of cost or market is $1,610.jab
In accounting, the lower-of-cost-or-market (LCM) approach is a technique that involves the valuation of merchandise inventory that is reported on a balance sheet. This method requires businesses to assess the net realizable value of inventory and to account for any losses by decreasing the inventory's cost.
Lower-of-Cost-or-Market Method is applied to each inventory item to determine the inventory's value at a lower cost or market. In this method, the inventory's carrying cost is compared to its market value, and the lesser amount is recorded as the inventory value. To use this method, the following information is necessary: Cost of goods sold (COGS)Retail price normal profit percentageSubstitute cost percentage of normal profit that applies to substitute cost
Given the data, Value of Inventory at the lower-of-cost-or-market is ParticularsCostRetail PriceSubstitute cost normal profit percentage of normal profit that applies to substitute cost inventories:
Item 1$200$250$21020%100%Item 2$350$400$38025%75%Item 3$100$125$12020%100%Item 4$1,000$900$95015%80%The replacement cost is lower than the inventory's cost. As a result, the merchandise inventory should be revalued to the market price of $210 for item
1, $380 for item 2, $120 for item 3, and $900 for item 4. The value of the inventory is calculated by adding the lower cost of inventory (market price) for each inventory item. Item 1: 200 (Cost) < 210 (Market price)Item 2: 350 (Cost) < 380 (Market price)Item 3: 100 (Cost) < 120 (Market price)Item 4: 900 (Cost) < 1,000 (Market price)Inventory Value = $210 + $380 + $120 + $900= $1,610
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Lower-of-cost-or-market method is an inventory valuation method that records inventory at the lower value between its original cost and current market price. You apply this individually to each inventory item by comparing the item's cost and its current market price, and record it at the lower value. All inventory amounts are then added for the total inventory value.
Explanation:The lower-of-cost-or-market method is an inventory valuation approach that states that an inventory's value should be recorded at either its original cost or its current market price, whichever is lower. This method is used to minimize any overstated values on the financial statements.
Applying this to each inventory item, you would first need to determine the cost of each individual item. Subsequently, you must determine the current market price of each inventory item. It is essential that these market prices are the replacement costs, which is the cost to acquire the item again, not the potential selling price.
Once you have both the original cost and the current market price, you compare the two and record the inventory item at the lower amount. Repeat this process for each inventory item and then aggregate the amounts to get the total inventory value.
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uts acquired a franchise on july 1, 2024, by paying an initial franchise fee of $304,200. the contractual life of the franchise is 9 years. record amortization of the franchise rights.
On July 1, 2024, UTS acquired a franchise by paying an initial franchise fee of $304,200. The contractual life of the franchise is nine years. The franchise rights are recorded as an asset in the balance sheet and amortized over its useful life, which is nine years.
Amortization is an accounting process of allocating the cost of an intangible asset over its useful life. The term "intangible asset" refers to any asset that lacks physical substance. Copyrights, patents, and trademarks, as well as goodwill and brand recognition, are examples of intangible assets. Franchise rights are intangible assets that represent the privilege of operating under a franchise agreement. Amortization expense is calculated by dividing the initial franchise fee by the number of years in the franchise agreement. In this scenario, the franchise's useful life is nine years, so the amortization expense is calculated as follows: Amortization Expense
= $304,200 / 9Amortization Expense
= $33,800
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