Answer:
1) a. True
Rosa is almost always right when she knows that her company is a monopoly, i.e. has no competition, but is generally wrong when her company has to compete with other contractors. It is simple, a monopolist can decide which markup percentage to use, and can use a really high one, but when competition exists, markups are not so high and profits not so abundant. That is why she almost always gets it wrong when having to deal with other competitors.
2) a. False
The winner's curse usually happens when someone wins a bid over some contract or asset, but then they realize that the actual price of the contract or asset was lower than the bid. E.g. in an auction, two people are fighting over to see who buys an antique car which increases the price of the car way beyond the real market value. But it can also happen to a company that offers very low prices, and then after they won a contract, cannot perform properly because their actual costs are higher.
When a company makes an offer, they are certain about the price of the contract and they should know the value of the services or goods that they are offering. If Rosa underestimates her costs, and prepares her offer using unrealistically low costs, then she will probably win the bid but end up losing money.
12
-
50what is the answer please
Answer:
-38
Explanation:
-38
brainliest plz i only need one more
Explain why different things are important for journalists from different media, with specific reference to radio, television and daily newspapers journalists. (9 marks)
Answer:
Because each of those mediums has a different logic.
Explanation:
For journalists in television, time is a great constraint, and therefore, they are interested in news reporting that is succint, and even entertaining.
In newspapers, what is limited is not time, but word space. Journalists are worried about presenting a newstory with the right words, but without an excessive amount of them.
Finally, in radio, journalists are worried about presenting a newscast with clear words, and in a way that the listener can understand, because radio lacks the visual clues that are present in newspapers and television.
Shake Shack Inc. reports the following items in its 2015 statement of cash flow. For each item, indicate whether it would appear in the operating, investing, or financing section of the statement of cash flows (in $ thousands).
a. Member distributions (dividends) $(11,599)
b. Net income 6,543
c. Payments on revolving credit facility (4,900)
d. Purchases of marketable securities (5,671)
e. Depreciation expense 10,444
f. Accounts payable 705
g. Proceeds from issuance of Class B common stock 45
h. Equity-based compensation 14,488
i. Inventories (45)
j. Purchases of property and equipment (40,007)
Answer:
a. financing
b. operating
c. operating
d. investing
e. operating
f. operating
g. financing
h. no effect
i. operating
j. investing
Explanation:
Operating Section :
Include items that generate cash through trading operations in the course of business.
Investing Section :
Include items that generate cash through disposal or acquisition of tangible and intangible assets including financial assets.
Financing Section :
Include items that generate cash through investment by owners, lenders and repayments of their capital thereof.
Assume the perpetual inventory; system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise.
Journalizing purchase transactions
Howie Jewelers had the following purchase transactions. Journalize all necessary trans—actions. Explanations are not required.
Jun. 20 Purchased inventory of $5,000 on account from Silk Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB shipping point.
Jun. 20 Paid freight charges, $400.
Jul. 4 Returned $600 of inventory to Silk.
Jul. 14 Paid Silk Diamonds, less return.
Jul. 16 Purchased inventory of $4,400 on account from Shanley Diamonds, a jewelry importer. Terms were 2/10, n/EOM, FOB destination.
Jul. 18 Received a $300 allowance from Shanley Diamonds for damaged but usable goods.
Jul. 24 Paid Shanley Diamonds, less allowance and discount.
Answer: Check attachment
Explanation:
In the attachment, note that:
On July 14:
Account payable was calculated as:
= $4400 - $300
= $4100
Merchandise Inventory = $4100 × 2%
= $4100 × 2/100
= $4100 × 0.02
= $82
Cash = $4100 - $82 = $4018.
Check attachment for further explanation.
Assessment
A customer hands you $3,850 in cash and would like to purchase 14 prepaid cards of
$275 each. The customer hands you the cash with an expired ID, and is expecting you to
process the transaction.
You must decline the transaction for the following reasons: (Select all that apply)
A customer may not purchase more than $2,000 in prepaid cards within a 24-hour period.
We do not sell prepaid cards.
The POS will prompt for customer ID for all prepaid card purchases.
Customer ID must be a valid (not expired) government issued photo ID (US or Canadian
issued driver's license, state ID, passport; US military ID, US Territory ID)
The customer appears to be purchasing prepaid cards just below the threshold where an ID
would be needed.
The customer is attempting to purchase more than the allowable number of gift cards in a
single transaction.
Answer:
You must decline the transaction for the following reasons:
A customer may not purchase more than $2,000 in prepaid cards within a 24-hour period.
Customer ID must be a valid (not expired) government issued photo ID (US or Canadian issued driver's license, state ID, passport; US military ID, US Territory ID)
Customers may not purchase more than $250 at the assisted check out (ACO).
Explanation:
A customer may not purchase more than $2,000 worth of prepaid products in one business day.
POS will prompt cashiers for an ID at $300:
POS will prompt cashiers to scan or manually enter a valid ID for purchases at $300.
Customers may not purchase more than 10 prepaid cards in one day.
Customers may not purchase more than $250 at the assisted check out (ACO).
Managing our prepaid card limits on a daily basis is run, similar to our money order process. The 2,000 daily limits for prepaid/gift cards is accomplished through a partnership with APPRISS.
Note :
The POS Register does not allow a single transaction over $2,000 to ensure CVS/pharmacy is in compliance with federal regulations.
Breaking up transactions to allow the purchase of more than $2,000
in prepaid products to one customer, couple or group is strictly against CVS/pharmacy policy and may result in disciplinary action up to, and including, termination of employment.
Two methods can be used for producing solar panels for electric power generation. Method 1 will have an initial cost of $550,000, an annual operating cost of $160,000 per year, and $125,000 salvage value after its three-year life. Method 2 will cost $830,000 with an annual operating cost of $120,000. and a $240,000 salvage value after its five-year life. The company has asked you to determine which method is better, but it Wants the analysis done over a three-year planning period. The salvage value of Method 2 will be 35% higher after three years than it is after five years. If the company's minimum attractive rate of return is 10% per year, which method should the company select?
Answer:
the company should choose method 1
Explanation:
Method 1 Method 2
Initial outlay $550,000 $830,000
operating costs (years 1,2,3) $160,000 $120,000
salvage value $125,000 $324,000
we must determine which alternative has the lowest present value:
method 1 = $550,000 + $160,000/1.1 + $160,000/1.1² + $160,000/1.1³ - $125,000/1.1³ = $550,000 + $145,455 + $132,231 + $120,210 - $93,914 = $853,982
method 2 = $830,000 + $120,000/1.1 + $120,000/1.1² + $120,000/1.1³ - $324,000/1.1³ = $830,000 + $109,091 + $99,174 + $90,158 - $243,426 = $884,996
Ballou Corporation declared a cash dividend on December 13, 2018, payable on January 10, 2019. By mistake, the company failed to make a journal entry in December 2018. The effect of this error on the financial statements as of December 31, 2018 were:_____.
a. retained earnings was overstated and liabilities were understated.
b. retained earnings was overstated and cash were understated.
c. retained earnings and liabilities were both understated.
d. retained earnings and liabilities were both overstated.
Answer: a. retained earnings was overstated and liabilities were understated.
Explanation:
Dividends are paid from the Retained Earnings so when a company announces a dividend, that dividend is to be deducted from the Retained earnings. As this was not done, the Retained earnings at year end are overstated.
As the dividends are not paid immediately, they become liabilities. With the relevant entries not made, the dividends were not recorded as liabilities which makes liabilities understated.
We run a delivery service, and we believe our firm has market risk equally between that of UPS and FedEx. We know the following about these 2 firms:______.
Stock Price per share # shares outstanding Market Value of Debt
UPS $65 0.7 billion $ 5 billion
FedEx $55 250 million $ 3 billion
We also have the following data on the securities of these firms:_______.
Beta E Beta D
UPS 0.8 0
FedEx 1.1 0.1
Assume that our firm has risk-free debt with market value $20 million and equity with market value $450 million. Assume that taxes are not relevant. Please estimate our firm’s equity beta
Answer:
The answer is "0.85 "
Explanation:
In order to locate a beta of the company, we must find the average beta of unlevered UPS and FedEx and find a levered beta of the company.
Price Outstanding shares(Billion) Market valu of equity(Billion) Market value of debt(billions) D/E Ratio
UPS 65 0.7 45.5 5 0.1099
FedEx 55 0.25 13.75 3 0.2182
[tex]Unlevered \ beta= \frac{levered \ beta}{(1+((1- tax rate)\times(\frac{Debt}{Equity})))}[/tex]
taxes desn't matter , given in the question so, assumed to be 0
[tex]Unlevered \ beta \ for \ UPS= \frac{0.8}{1+(1-0)\times (0.1099)}[/tex]
[tex]= \frac{0.8}{1+(1)\times (0.1099)}\\\\= \frac{0.8}{1+(0.1099)}\\\\= \frac{0.8}{1.1099}\\\\=0.72[/tex]
[tex]Unlevered \ beta \ for \ FedEx= \frac{1.1}{1+(1-0)\times (0.2182)}[/tex]
[tex]= \frac{1.1}{1+(1)\times (0.2182)}\\\\= \frac{1.1}{1+(0.2182)}\\\\= \frac{1.1}{1.2182}\\\\=0.90[/tex]
[tex]Average \ Unlevered \ beta = \frac{0.72+0.90}{2}[/tex]
[tex]= \frac{1.62}{2}\\\\=0.81[/tex]
[tex]\text{levered beta of the delivery service firm }= unlevered \ beta \times(1+(1-taxes) \times (\frac{debt}{equity}))[/tex]
[tex]= 0.81 \times (1+(1-0)\times (\frac{20}{450})\\\\= 0.81 \times (1+(1)\times (0.04)\\\\= 0.81 \times (1+(0.04)\\\\= 0.81 \times (1.04)\\\\=0.85[/tex]
This activity is important because any business that offers multiple product lines to multiple market segments is faced with the task of making the product/market decisions and prioritizing those decisions. Products and market segments that are growing quickly and are very profitable should get more attention and resources than a product and market segment that does not show as much potential.
Once a marketing manager creates a market-product grid, they must select which segments to target. To do this, the marketing manager should use several criteria in assessing the different segments. Those criteria include: market size, expected growth, competitive position, cost of reaching the segment, and the compatibility with the organization's objectives and resources.
The goal of this exercise is to demonstrate your understanding of the market-product development process by analyzing a gift shop's markets and products.
Read the case below and then answer the questions that follow as you consider its markets and product offerings.
A small local gift shop recently marked its 25th anniversary of being in business. Over that time, the owners have continually changed the products sold in its store to reflect changes in the market. From the early days of selling small gift-type items such as figurines and collectibles, the store now offers a more eclectic mix of merchandise that includes Vera Bradley purses and inexpensive jewelry, as well as items that could be classified as "gift-type" products and merchandise that is best described as "collectibles."
However, the demographics of the store's market, as well as the needs of that market, seem to be changing. There has been an influx of younger customers (20s and 30s) into the area, which has brought the average age of the area down by 9.8 years. This rapidly growing segment doesn't seem interested in buying the same collectibles that their parents bought. Many older residents (60s and 70s) have been leaving the area for retirement. The older customers are still buying the collectibles, but are also buying gifts for children and grandchildren for holidays and special occasions. Indeed, while sales of merchandise aimed at the younger customers have grown 30 percent, sales to the older crowd have been flat. And the younger group has now passed the older segment in terms of the size of the population. While there are other stores in the area selling similar merchandise, this gift shop has managed to get an exclusive on the Vera Bradley line, which has been popular with the younger customers. The owners of the gift shop are considering which market segment should be the focus of their attention and limited resources. This is an especially critical decision because of the limited space in the store and the need to add fixtures for carrying some of the collectible items that are coming on the market.
Based on the limited information in the case, which market segment is larger?
a) the over-80 segment
b) all segments are the same size
c) the 60s and 70s segment
d) the 20s and 30s segment
Answer:
d) the 20s and 30s segment
Explanation:
The case clearly states "And the younger group has now passed the older segment in terms of the size of the population."
Besides the fact that there are more younger people than older people in the area, the demographic of the store's customers is changing also: "... sales of merchandise aimed at the younger customers have grown 30 percent, sales to the older crowd have been flat.".
We can imply that the store's largest market segment is young people in their 20s and 30s.
You are considering starting a company that manufactures racing bicycles. You are planning on financing your firm 40% equity and 60% debt. You estimate that your upfront costs will be $5M, and that you will earn an EBIT of $1M per year for the next 12 years. Lightning Bolt Bikes makes racing bicycles similar to the ones that you wish to manufacture. They have a CAPM equity beta of 1.9 and a debt to equity ratio of 0.7. The tax rate for both firms is 35%, the riskless rate is 3%, and the expected return on the S&P500 is 15%. Cost of Debt is 6%
Part A (5 points). What is the asset beta of Lightning Bolt Bikes?
Part B (5 points). What is your unlevered cost of equity?
Part C (5 points). What is your firm’s equity beta?
Part D (10 points). What is your firm’s weighted average cost of capital?
Part E (5 points). What is the NPV of your proposed bicycle company using the WACC method?
Answer and Explanation:
1. Asset beta measures company's risk or volatility of return in assets without the effect of leverage financing or debt.
Asset beta= Equity beta / 1+(1-tax rate) *debt / equity
2. Unlevered cost of equity measures the returns on assets without the effect of debt
Unlevered cost of equity = Risk free return + Asset Beta * (Expected market return - Risk free return)
3. Equity beta measures security prices' volatility to change in the market
4. Weighted average cost of capital is the weighted average cost or average cost of all capital sources employed by the company in financing it's assets
Weighted Average cost of capital = Cost of Equity * proportion of equity + Cost of debt after tax rate * proportion of debt
Expected return in CAPM= Risk free return +asset beta *market return -risk free return
All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December 31
On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520.
On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.
Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.
Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.
At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.
On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
2. Using the following headings, indicate the effect of each adjusting entry and the amount of the effect. Use + for increase, − for decrease. (Reminder: Assets = Liabilities + Stockholders’ Equity; Revenues – Expenses = Net Income; and Net Income accounts are closed to Retained Earnings, a part of Stockholders’ Equity.)
Answer:
1) adjusting entries
a. On September 1 of the current year, Zimmerman collected six months' rent of $8,520 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,520.
Dr Unearned rental revenue 5,500
Cr Rental revenue 5,500
b. On October 1 of the current year, the company borrowed $13,200 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.
Dr Interest expense 396
Cr Interest payable 396
c. Depreciation of $3,000 must be recognized on a service truck purchased in July of the current year at a cost of $24,000.
Dr Depreciation expense 3,000
Cr Accumulated depreciation 3,000
d. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
Dr Unearned service revenue 600
Cr Service revenue 600
e. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.
Dr Insurance expense 1,660
Cr Prepaid insurance 1,660
f. The company earned service revenue of $4,200 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year. No entry has been recorded.
Dr Accounts receivable 4,200
Cr Service revenue 4,200
g. At December 31 of the current year, wages earned by employees totaled $13,700. The employees will be paid on the next payroll date in January of the next year.
Dr Wages expense 13,700
Cr Wages payable 13,700
h. On December 31 of the current year, the company estimated it owed $490 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
Dr Property taxes expense 490
Cr Property taxes payable 490
2) Assets = Liabilities + Stockholders’ Revenues - Expenses = Net
Equity Income
a. na - + + na +
b. na - - na - -
c. - na - na - -
d. na - + + na +
e. - na - na - -
f. + na + + na +
g. na + - na - -
h. na + - na - -
Two carmakers have developed a strange but successful partnership. Ford, a U.S. automaker,and Mazda, an Asian carmaker, have collaborated on several models, including the Explorer, the Probe, the Mazda 323, and the Mazda MX-6. The U.S. automaker has supplied Mazda with help in marketing, finance, and styling. In return, Mazda has provided manufacturing and product development expertise to Ford. Both companies have worked together toward a common goal and both have benefited as a result of theirA. strategic alliance.B. international contract.C. free trade agreement.D. collaborative treaty.E. global oligopoly.
Answer:
A. strategic alliance
Explanation:
A strategic alliance refers to an agreement that is made between the two companies to work for accomplishing a common objective also in this the independence is there for working. It is less difficult and less binding as compared with the joint venture
Therefore in the given situation, it represents upon the strategic alliance and the same is to be considered
hence, the correct option is A.
If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity demanded increases from 190 bags to 210 bags, then the price elasticity of demand (by the midpoint method) is:
Answer:Price elasticity of demand = -0.05
Explanation:
Price elasticity of demand using the midpoint method= [tex]\frac{(Q2- Q1)/(Q2+Q1)/2}{(P2- P1)/(P2+P1)/2}[/tex]
where Q =Quantity demanded
P = Price
Price elasticity of demand = ([tex]\frac{(210-190/210+190)/2}{0.90-1.10/ 0.90+1.10)/2}[/tex]
= [tex]\frac{20/400)/2 }{ -0.2/2)/2}[/tex]
0.025/ -0.05 = -0.05
Price elasticity of demand = -0.05
The Price elasticity of demand tells us how much quantity demanded changes in response to a change in price. Here the Demand for a good is inelastic because the PED coefficient is less than one -0.05
Answer:
Elasticity = 0.5
Explanation:
Elasticity is defined as the responsiveness of quantity demanded to changes in price. One of the methods used to calculate it is the midpoint method.
Midpoint method uses average values to calculate the elasticity of demand of a good.
Elasticity = {(Q2 - Q1) ÷ (Q1 + Q2)/2} ÷ {(P2 - P1) ÷ (P1 + P2)/2}
Elasticity = {(210 - 190) ÷ (210 + 190)/2} ÷ {(0.9 - 1.10) ÷ (0.9 + 1.10)/2}
Elasticity = 0.1 ÷ 0.2
Elasticity = 0.5
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, frizzles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods.
Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashies decreases by 5%, the quantity of frizzles sold increases by 4% and the quantity of cannies sold decreases by 5%. Your job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods your marketing firm should advertise together.
Complete the first column of the following table by computing the cross-price elasticity between splishy splashies and flopsicles, and then between splishy splashies and kipples. In the second column, determine if splishy splashies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with splishy splashies.
Relative to Splishy Splashies
Cross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Splishy Splashies
Flopsicles
Kipples
Answer:
cross-price elasticity formula = % change in quantity demanded of good X / % change in price of good Y
cross-price elasticity of demand between splishy splashies and frizzles (or is it flopsicles?) = 4% / -5% = -0.8, complement goods. When the cross price elasticity is negative, then the goods complement each other.
cross-price elasticity of demand between splishy splashies and cannies (or is it kippies?) = -5% / -5% = 1, substitute goods. When the cross price elasticity is positive, then the goods substitute each other.
If you are about to launch a marketing campaign for splishy splashies, then you should include frizzles in it.
The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid at the beginning of the 20-year period. The agency has estimated that the land would generate $110,000 per year in benefits to hunters, bird watchers, and hikers. Assume that the lease price represents the social opportunity cost of the land and that the appropriate real discount rate is 4 percent.
a. Assuming that the yearly benefits, which are measured in real dollars, accrue at the end of each of the 20 years, calculate the net benefits of leasing the land. Should the environmental protection agency pay for this piece of land?
b. Some analysts in the agency argue that the annual real benefits are likely to grow at a rate of 2 percent per year due to increasing population and county income. Recalculate the net benefits assuming that they are correct. Should the environmental protection agency pay for this piece of land?
Answer: Check explanation
Explanation:
a. For this scenario, it should be noted that the net benefits for the land lease will be equal to the present value of the benefits that are generated. This will be the annual benefit multiplied by the present value of annuity factor. This will be:
= $110,000 x 13.59
= $1,494,900
From the calculation, we can see that the lease price is less than the present value calculated, this implies that the transaction will incur a profit and should be undertaken.
b. For the growing annuity here, the calculation will be:
= [$110,000/(4% - 2%)] x [1 - [(1 + 2%)/(1 + 4%)]²⁰]
= [$110,000/2%] × [1 - (1 + 0.02)/(1 + 0.04)²⁰]
= $5,500,000 x 0.321833005
= $1,770,081.53
The environmental agency should pay for the piece of land as the present value calculated is higher.
Note that the present value of the annuity factor for 20 years at 4% = 13.59
This activity is important because any business that offers multiple product lines to multiple market segments is faced with the task of making the product/market decisions and prioritizing those decisions. Products and market segments that are growing quickly and are very profitable should get more attention and resources than a product and market segment that does not show as much potential.
Once a marketing manager creates a market-product grid, they must select which segments to target. To do this, the marketing manager should use several criteria in assessing the different segments. Those criteria include: market size, expected growth, competitive position, cost of reaching the segment, and the compatibility with the organization's objectives and resources.
The goal of this exercise is to demonstrate your understanding of the market-product development process by analyzing a gift shop's markets and products.
Read the case below and then answer the questions that follow as you consider its markets and product offerings.
A small local gift shop recently marked its 25th anniversary of being in business. Over that time, the owners have continually changed the products sold in its store to reflect changes in the market. From the early days of selling small gift-type items such as figurines and collectibles, the store now offers a more eclectic mix of merchandise that includes Vera Bradley purses and inexpensive jewelry, as well as items that could be classified as "gift-type" products and merchandise that is best described as "collectibles."
However, the demographics of the store's market, as well as the needs of that market, seem to be changing. There has been an influx of younger customers (20s and 30s) into the area, which has brought the average age of the area down by 9.8 years. This rapidly growing segment doesn't seem interested in buying the same collectibles that their parents bought. Many older residents (60s and 70s) have been leaving the area for retirement. The older customers are still buying the collectibles, but are also buying gifts for children and grandchildren for holidays and special occasions. Indeed, while sales of merchandise aimed at the younger customers have grown 30 percent, sales to the older crowd have been flat. And the younger group has now passed the older segment in terms of the size of the population. While there are other stores in the area selling similar merchandise, this gift shop has managed to get an exclusive on the Vera Bradley line, which has been popular with the younger customers. The owners of the gift shop are considering which market segment should be the focus of their attention and limited resources. This is an especially critical decision because of the limited space in the store and the need to add fixtures for carrying some of the collectible items that are coming on the market.
Based on the limited information in the case, which market segment is larger?
a) the over-80 segment
b) all segments are the same size
c) the 60s and 70s segment
d) the 20s and 30s segment
William Company owns and operates a nationwide chain of movie theaters. The 500 properties in the William chain vary from low volume, small town, single-screen theaters to high volume, big city, multi-screen theaters. The management is considering installing machines that will make popcorn on the premises. These machines would allow the theaters to sell popcorn that would be freshly popped daily rather than the pre-popped corn that is currently purchased in large bags. This proposed feature would be properly advertised and is intended to increase patronage at the company's theaters.
Annual rental costs and operating costs vary with the size of the machines. The machine capacities and costs are as follows:
Economy Regular Super
Annual capacity (boxes) Cost 50,000 120,000 300,000
Annual machine rental $8,000 $11,000 $20,000
Popcorn cost per box 130 130 130
Other costs per box 220 140 050
Cost of each box 080 080 080
Required:
a. Calculate the volume level in boxes at which the economy popper and regular popper would earn the same profit (loss).
b. Management can estimate the number of boxes to be sold at each of its theaters. Present a decision rule that would enable William's management to select the most profitable machine without having to make a separate cost calculation for each theater.
c. Could management use the average number of boxes sold per seat for the entire chain and the capacity of each theater to develop this decision rule? Explain your answer.
Answer:
William Company
a) Volume level in boxes at which the economy popper and the regular popper would earn the same profit (loss):
Economy Regular Difference in costs
Total Fixed costs $58,000 $131,000 $73,000
Total Variable costs per unit $430 $350 $80
Volume = Difference in fixed costs/Difference in variable = $73,000/$80
= 912.5 boxes
b. Decision rule: We assume a selling price of $1,000 per box, then based on this selling price, we calculate the contribution per box. The decision rule is to purchase the machine that has the least break-even point in sales unit.
Economy Regular Super
Total fixed annual costs $58,000 $131,000 $320,000
Selling price per box $1,000 $1,000 $1,000
Total variable cost per box $430 $350 $260
Contribution per box $570 $650 $740
Break-even point = 101.75 201.54 432.43
The most profitable machine is the Economy Popper since it has the least break-even point. This is the point at which management will start realizing some profits after covering all the fixed costs.
c. Management may not be able to use the average number of boxes sold per seat for the entire chain and the capacity of each theater to develop this decision rule. Using this will be complicated. But, using the break-even point for each machine is a lot easier and simpler to implement.
Explanation:
a) Machine Capacities and Costs Data and Calculations:
Economy Regular Super
Annual capacity (boxes) Cost 50,000 120,000 300,000
Annual machine rental $8,000 $11,000 $20,000
Total fixed annual costs $58,000 $131,000 $320,000
Popcorn cost per box 130 130 130
Other costs per box 220 140 050
Cost of each box 080 080 080
Total variable cost per box $430 $350 $260
For example, in 2012, each of the 80 billion pieces of advertising brought 21 cents in revenue, compared to 42 cents for first-class mail. Which word could best replace revenue in this sentence
Answer:
Returns
Explanation:
Returns on an investor is the amount of profit or gain an outlay of cash is able to bring at the end of a period.
Rate of returns on invested funds is used as a yardstick by potential investors in deciding which enterprise to fund.
In the given instance where each of the 80 billion pieces of advertising brought 21 cents in revenue, a better replacement for the word revenue is return.
So returns of funds invested on each piece of advertising is 21 cents.
Answer: income
Explanation:
synonym for revenue
Promises Made in Consideration of Marriage. After twenty-nine years of marriage, Robert and Mary Lou Tuttle were divorced. They admitted in court that before they were married, they had signed a prenuptial agreement. They both acknowledged that the agreement had stated that each would keep his or her own property and anything derived from that property. Robert came into the marriage owning farmland, while Mary Lou owned no real estate. During the marriage, ten different parcels of land, totaling about six hundred acres, were acquired, and two corporations, Tuttle Grain, Inc., and Tuttle Farms, Inc., were formed. A copy of the prenuptial agreement could not be found.
Required:
Can the court enforce the agreement without a writing? Why or why not?
Answer:
Explanation:
From the question, we are informed about Promises Made in Consideration of Marriage. And After twenty-nine years of marriage, Robert and Mary Lou Tuttle were divorced. They admitted in court that before they were married, they had signed a prenuptial agreement.
In this case with the rest information from the question, that A copy of the prenuptial agreement could not be found, then the court cannot enforce the agreement without a writing Prenuptial agreements.
Reason behind this is that a Prenuptial agreements can only be enforced if it is writing.Prenuptial agreements is usually signed before two people marry each other, so in case of death or divorce in the future, the ownership of their asset would have been defined.
You recommend the following: We should discontinue our policy of reimbursing employees for meals and incidental expenses. In place of this policy, we should provide $100 daily stipends. This recommendation is best classified as what
Answer:
the options are missing:
Specific, actionable, and justified
Specific but not actionable and not justified
Specific and actionable but not justified
The answer is:
Specific, actionable, and justifiedThis proposition is very specific (it is the only thing that all three options agree upon).
In order for a recommendation to be actionable, it must be relevant and feasible.
This recommendation is feasible since 83% of the employees prefer the $100 stipend. It is also relevant because the company can save approximately $61 per employee per day.
This $61 savings per day per employee also makes this proposition justifiable since the company's employees travel a lot.
Reimbursement is the payment that the company does to its employees for their service. The proposal is Specific, actionable, and justified.
What is Reimbursement ?It is the money paid to the employees/customer/parties for their services provided. It's a business expense and paid after complying with the tax rules.
The proposal is Specific, actionable, and justified.
The recommendation should be feasible to be actionable. It is feasible because 83% of employees agreed to the $100 stipend daily for meals and incidental expenses. And it is at the same time beneficial to the company, as it would save $61 per employee per day.
Therefore, it can be said that the above explanation aptly describes the statement.
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Determining the true cash balance, starting with the unadjusted book balance
Nickleson Company had an unadjusted cash balance of $7,176 as of May 31. The company’s bank statement, also dated May 31, included a $67 NSF check written by one of Nickleson’s customers. There were $1,239 in outstanding checks and $255 in deposits in transit as of May 31. According to the bank statement, service charges were $35, and the bank collected an $600 note receivable for Nickleson. The bank statement also showed $14 of interest revenue earned by Nickleson.
Required:
Determine the true cash balance as of May 31. (Hint: It is not necessary to use all of the preceding items to determine the true balance.)
True cash balance
Answer: $7,688
True Cash balance = Unadjusted cash balance + Interest earned + Note received from Nickleson by bank - NSF (Non-sufficient funds) check - bank charges
= 7,176 + 14 + 600 - 67 - 35
= $7,688
Outstanding checks and deposits in transit do not need to be accounted for as they are already included in the unadjusted book balance.
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Answer:
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Explanation:
Answer:
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A company reports accounting data in its financial statements. This data is used for financial analyses that provide insights into a company’s strengths, weaknesses, performance in specific areas, and trends in performance. These analyses are often used to compare a company’s performance to that of its competitors, or to its past or expected future performance. Such insight helps managers and analysts improve their decision making. Most decision makers and analysts use five groups of ratios to examine the different aspects of a company’s performance. Indicate whether each of the following statements regarding financial ratios are true or false?
a. The ratios provide an accurate and thorough representation of the Chinese company’s performance.b. The analysis likely includes incorrect and misleading conclusions.
Answer:
a. False
b. True
Explanation:
Ratio analysis is a very useful method of analyzing a company however it is not necessarily very in-depth. If a company seems to be performing below the industrial average, it would be prudent to check the reasons why the company is doing so.
The advantage of ratio analysis in this instance is that it would help point you in the right direction to know what accounts to analyze more intensely to find out why the Chinese company is not performing up to standard.
Ratio analysis are good but they do not always provide an accurate and thorough representation of a company’s performance therefore relying solely on ratios will lead to an analysis that likely includes incorrect and misleading conclusions.
Assume you invested $100,000 into your lawn mowing business, but you could have invested in a similar operation with the same risk and received a 20 percent return. You should expect a “normal profit “ of $ _____________ . (Answer to the nearest whole number of THOUSANDS of dollars)
Answer:
you would get $20,000
Explanation:
100,000 x .2
For each transaction,
1. Analyze the transaction using the accounting equation.
2. Record the transaction in journal entry form
3. Post the entry using T-accounts to represent ledger accounts.
Use the following (partial) chart of accounts—account numbers in parentheses: Cash (101); Accounts Receivable (106); Office Supplies (124); Trucks (153); Equipment (167); Accounts Payable (201); Unearned Landscaping Revenue (236); D. Tyler, Capital (301); D. Tyler, Withdrawals (302); Landscaping Revenue (403); Wages Expense (601), and Landscaping Expense (696).
a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value.
b. On May 21, Elegant Lawns purchases office supplies on credit for $500.
c. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
d. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Answer:
1) I used an excel spreadsheet
2) a. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value.
Dr Cash 7,000
Dr Equipment 3,000
Cr DeShawn Tyler, capital 10,000
b. On May 21, Elegant Lawns purchases office supplies on credit for $500.
Dr Office supplies 500
Cr Accounts payable 500
c. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
Dr Cash 4,000
Cr Landscaping Revenue 4,000
d. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Dr Cash 1,000
Cr Unearned Landscaping Revenue 1,000
3)
Cash (101)
debit credit
7,000
4,000
1,000
12,000
Office Supplies (124)
debit credit
500
Equipment (167)
debit credit
3,000
Accounts Payable (201)
debit credit
500
Unearned Landscaping Revenue (236)
debit credit
1,000
D. Tyler, Capital (301)
debit credit
10,000
Landscaping Revenue (403)
debit credit
4,000
Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data.
Rounded Edge Squared Edge Total
Direct materials $ 9,500 $ 21,600 $ 31,100
Direct labor 6,200 11,800 18,000
Overhead (300% of direct labor cost) 18,600 35,400 54,000
Total cost $ 34,300 $ 68,800 $ 103,100
Quantity produced 10,500 ft. 14,000 ft.
Average cost per ft. (rounded) $ 3.27 $ 4.91
Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,000 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information.
Overhead Cost Category (Activity Cost Pool) Cost
Supervision $ 2,160
Depreciation of machinery 28,840
Assembly line preparation 23,000
Total overhead $ 54,000
She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.)
Usage
Overhead Cost Category (Activity Cost Pool) Driver Rounded Edge Squared Edge Total
Supervision Direct labor cost ($) $ 6,200 $ 11,800 $ 18,000
Depreciation of machinery Machine hours 400 hours 800 hours 1,200 hours
Assembly line preparation Setups (number) 32 times 93 times 125 times
Required:
Use this information to (1) assign these three overhead cost pools to each of the two products using ABC, (2) determine average cost per foot for each of the two products using ABC, and (3) compare the average cost per foot under ABC with the average cost per foot under the current method for each product. For part 3, explain why a difference between the two cost allocation methods exists.
Answer:
Overhead Cost Category (Activity Cost Pool) Cost
Supervision $2,160
Depreciation of machinery $28,840
Assembly line preparation $23,000
Total overhead $54,000
Supervision
Direct labor cost ($) $6,200 $11,800 $18,000
Depreciation of machinery
Machine hours 400 hours 800 hours 1,200 hours
Assembly line preparation Setups (number)
32 times 93 times 125 times
1)
overhead costs assigned to Rounded Edge
supervision = $2,160 x ($6,200 / $18,000) = $744
depreciation = $28,840 x (400 / 1,200) = $9,613
assembly line preparation = $23,000 x (32/125) = $5,888
total overhead costs = $16,245
overhead costs assigned to Squared Edge
total overhead costs = $54,000 - $16,245 = $37,755
2)
total costs assigned to Rounded Edge
materials $9,500
direct labor $6,200
overhead $16,245
total $31,945
cost per foot = $31,945 / 10,500 = $3.0424 per foot
total costs assigned to Squared Edge
materials $21,600
direct labor $11,800
overhead $37,755
total $71,155
cost per foot = $71,155 / 14,000 = $5.0825 per foot
3)
The average cost per foot of Rounded Edge decreased because lower overhead costs were allocated to their production.
The average cost per foot of Squared Edge increased because higher overhead costs were allocated to their production.
Consider a simple example economy where there are two goods, coconuts and restaurant meals (coconut-based). There are two firms. A coconut producer collects and sells 10 million coconuts at $2.00 each. The firm pays $5 million in wages, $0.5 million in interest on an old loan, and $1.5 million in taxes to the government. We also know that 4 million coconuts are sold to the public for consumption, and 6 million coconuts are sold to the restaurant firm, which uses them to prepare meals. The restaurant sells $30 million in meals. The restaurant pays $4 million in wages and the government $3 million in taxes. The government supplies security and accounting services and employs only labor, and government workers are paid $5.5 million, collected in taxed by the government. Finally, consumers pay $1 million in taxes to the government in addition to the taxes paid by the two firms.
Required:
a. Compute GDP for this simple economy using the product approach.
b. Compute GDP for this simple economy using the expenditure approach.
c. Compute GDP for this simple economy using the income approach.
Answer:
1) GDP using product Approach ; Market value of all goods and services produced
= Coconut + Restaurant meal
= 10 million*$2 + ($30 million - $6 million*$2) as 6 million coconuts are sold to restaurant as raw materials so to avoid double counting.
= $20 million + $30 million - $12 million
= $38 million
2) Expenditure Approach : Consumption + Investment + Government Expenditure + Net Exports
= $4 million * $2 + $30 million + $5.5 million
= $8 million + $30 million + $5.5 million
= $43.5 million
3) Income Approach : Wages + Rent + Interest + Profit
= $5 million + $0.5 million + $1.5 million +$3 million + $4 million + $1 million
= $15 million
At $0.31 per bushel, the daily supply for wheat is 306 bushels, and the daily demand is 459 bushels. When the price is raised to $0.79 per bushel, the daily supply increases to 546 bushels, and the daily demand decreases to 439 bushels. Assume that the price-supply and price-demand equations are linear. a. Find the price-supply equation.
Answer:
The answer is below
Explanation:
a) Find the price supply equation. b) Find the price demand equation. c) Find the equilibrium price and quantity.
Solution:
a) A linear equation is in the form y = mx + b, where m is the slope, y is a dependent variable, x is an independent variable, b is value of y at x = 0.
Let p represent the price and q represent the quantity. Hence we have the points (306, 0.31), (546, 0.79)
Using the formula:
[tex]p-p_1=\frac{p_2-p_1}{q_2-q_1}(q-q_1)\\ \\p-0.31=\frac{0.79-0.31}{546-306} (q-306)\\\\p=0.002q-0.302[/tex]
b) Let p represent the price and q represent the demand. Hence we have the points (459, 0.31), (439, 0.79)
Using the formula:
[tex]p-p_1=\frac{p_2-p_1}{q_2-q_1}(q-q_1)\\ \\p-0.31=\frac{0.79-0.31}{439-459} (q-459)\\\\p=-0.024q+11.326[/tex]
c) At equilibrium, price supply equation = price supply equation
0.002q - 0.302 = -0.024q + 11.326
0.002q + 0.024q = 11.326 + 0.302
0.026q = 11.628
q = 447.23 bushels
p = 0.002q - 0.302 = 0.002(447.23) - 0.302
p = $1.2
Last month Dexter Company had a $11,780 loss on sales of $164,000. Fixed costs are $62,620 a month. By how much do sales have to increase for Dexter to break even
Answer:
$38,000
Explanation:
Calculation for how much do sales have to increase for Dexter to break even
First step is to find the contribution margin ratio
Contribution margin ratio = ($62,620 - $11,780)/$164,000 = 30%
Contribution margin ratio =$50,840/$164,000
Contribution margin ratio=31%
Second step is to find the Break even sales Break even sales=$62,620/0.31
Break even sales=$202,000
Last step is to find the increase in sales
Sales must increase =$202,000 - $164,000
Sales must increase = $38,000
Therefore the amount that sales have to increase for Dexter to break even will be $38,000
Within Kraljic's Portfolio Analysis, products that represent High Risk and Low Value to the company are categorized as: A. Leverage or Preferred B. Superior C. Bottleneck D. Critical or Strategic E. Routine or Arms-Length
Answer:
C. Bottleneck
Explanation:
Kraljic's Portfolio Analysis is used to assess business risk and maximise profits. It reduces cost by estimating security level of an endeavour.
It involves the following step:
- Product purchase classification
- Market analysis
- Strategic positioning
- Action planning
Product classification is the process by which commodities are categorised based on risk level and profitability.
The following are the categories:
- Leverage items have high profit and low supply risk
- Non critical items have low risk and low profit
- Bottleneck items have high risk and low profit
- Strategic items have high profit and high risk
The product that shows high risk and low value should be option c. Bottleneck
Kraljic's Portfolio analysis:According to the above analysis, the product should be split into 4 parts:
Strategic items - These items shows high risk and high value in terms of profit for the company.Bottleneck items- These items shows high risk and low value in terms of profit for the company.Leverage items- These items show low risk and high value in terms of profit for the company.Non-critical items- These items represent low risk and low value in terms of profit for the companyHence, the correct option is: B. Bottleneck
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