Consider the following scenario: Suppose that a cafe enjoys a large increase in customers whenever the jazz club next door features a band playing appealing music, because it can be easily heard from the cafe. The jazz club owner decides to purchase the cafe so that he can internalize this positive externality. Which of the following types of private solutions to the externality of appealing music has occurred in this case? Integration of different types of businesses through merger or acquisition Charities Contracts Moral codes and social sanctions It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when the number of parties involved is so large that it makes .

Answers

Answer 1

Answer:

Integration of different types of businesses through merger or acquisition

negotiations among all of the parties too costly

Explanation:

Here is the complete second question : It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when the number of parties involved is so large that it makes (the market failure from the externality unimportant, coordinating negotiations among all of the parties too costly, government action the only viable solution).

Positive externality occurs when the benefits of economic activities to third parties exceeds the costs.

Government encourages activities that generates positive externalities by granting subsidies

The activities of the jazz club generates positive externality to the cafe.

How to internalise positive externality includes :

Integration of different types of businesses through merger acquisition : this is the step taken by the cafe by purchasing the jazz clubCharities Contracts


Related Questions

According to Herzberg, a major difference between motivator and hygiene factors includes: Select one: a. motivators are controlled by supervisors and hygienes are contained within the job b. hygiene factors allow self-actualization when present whereas motivation factors can only be activated when pay and benefits are acceptable c. hygiene factors deal with personal appearance and motivators concern negative aspects of the job environment d. motivators deal with job characteristics that are intrinsic to the job and hygiene factors deal with characteristics of the work environment or factors extrinsic to the job

Answers

Answer:

d. motivators deal with job characteristics that are intrinsic to the job and hygiene factors deal with characteristics of the work environment or factors extrinsic to the job

Explanation:

According to Herzberg's theory, heigene and motivators are the two crucial factors factors that determine job satisfaction as well as job dissatisfaction. Motivators provide positive satisfaction from the real nature condition of the job i.e the intrinsic factors. Theses intrinsic could be from recognition as well as achievement. These Motivators could be from rewards for one's achievement, making ones has part of people making decisions, making one as an important entity in the company.

On the other hand hygiene factors

could be as a result of organizational policies as well as supervision. Another factor is relationships with other employees. It should be noted that a major difference between motivator and hygiene factors includes motivators deal with job characteristics that are intrinsic to the job and hygiene factors deal with characteristics of the work environment or factors extrinsic to the job.

A new home sold for $350,000. The tax rate is $.825 per hundred or fraction thereof. How much will the annual taxes be on this property?

Answers

Answer:

$2,887.50

Explanation:

$350,000 ÷ 100 = $3,500

$3,500 x 0.825 = $2,887.50

hope this helps :)

The annual taxes on this property would amount to approximately $2,887.50.

To calculate the annual taxes on the property, we need to determine the taxable value of the property and then apply the tax rate.

Given:

Selling price of the home: $350,000

Tax rate: $0.825 per hundred or fraction thereof

To calculate the taxable value, we divide the selling price by 100 and round up to the nearest whole number:

Taxable value = Selling price / 100

Taxable value = $350,000 / 100

Taxable value = $3,500

Next, we multiply the taxable value by the tax rate:

Annual taxes = Taxable value × Tax rate

Annual taxes = $3,500 × $0.825

Annual taxes = $2,887.50

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GUYS EMERGENCY i really need help i have a test tomorrow and the class is principal of education can someone plz help me like i beg whoever​

Answers

no tension I help to to my following please

Information on Psi Phi Inc.âs three products are as follows: A B C Unit sales per month â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦ 1,600 3,000 1,600 Selling price per unit â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦. $10.00 $15.00 $8.00 Variable cost per unit â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦... (10.40) (12.00) (4.00) Unit contribution margin â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦.. $(0.40) $3.00 $4.00 Required: Determine the effect of each of the following situations would have on monthly profits. Each situation should be evaluated independently of all others. a) Product A is discontinued. b) Product A is discontinued and the subsequent loss of customers cause sales of Product B to decline by 200 units. c) The selling price of Product A is increased to $11.00 with a sales decrease of 300 units. d) The price of Product B is increased to $16.00 with a resulting sales decrease of 400 units. However, some of the customers shift to Product A; sales of Product A increase by 280 units. e) Product A is discontinued, and the plant in which Product A was produced is used to produce Product D, a new product. Product D has a unit contribution margin of $0.60. Monthly sales of Product D are predicted to be 1,200 units. f) The selling price of Product C is increased to $9.00 and the selling price of Product B is decreased to $14.00. Sales of Product C decline by 400 units, while sales of Product B increase by 600 units.

Answers

Answer:

fgoooo

Explanation:

fhgfh can you give me mola

Which of the following statements is CORRECT? a. As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS. b. The optimal capital structure minimizes the cost of equity, which is a necessary condition for maximizing the stock price. c. The optimal capital structure simultaneously maximizes EPS and minimizes the WACC. d. The optimal capital structure simultaneously minimizes the cost of debt, the cost of equity, and the WACC. e. The optimal capital structure simultaneously maximizes stock price and minimizes the WACC.

Answers

Answer:

e. The optimal capital structure simultaneously maximizes stock price and minimizes the WACC.

Explanation:

The optimal capital structure involves the combination of both debt and equity where debt is a type of loan which is needed to pay back in some years while the equity represents the ownership of the shareholder in the organization

So here the optimal capital structure represents the maximum stock price that minimizes the weighted average cost of capital

hence, the correct option is d.

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $880,000, and it would cost another $19,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $463,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $14,500. The sprayer would not change revenues, but it is expected to save the firm $330,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. A. What is the Year 0 net cash flow?
B. What are the net operating cash flows in Years 1, 2, and 3?
C. What is the additional Year-3 cash flow (i.e., the after-tax salvage and the return of working capital)?
D. Based on your IRR analysis, if the projectâs cost of capital is 12%, should the machine be purchased?.

Answers

Answer:

A. -1118000 B. Y1=375612Y2=418521Y3= 304148 C. 803657 D. 26%

Explanation:

Managerial Finance.

A.) 0 Year Net Cash Flow = -1080000-22500-15500= -1118000

B.) Y1=375612

     Y2=418521

     Y3= 304148

C.) 60500 + (605000-81695) * (.35) + 15500 = 803657

D.) IRR put the value of Net Present Value (NPV) as 0

NPV= -1118000 +375612/(1+r)^1 + 418521/ (1+r)^2 + (304148) + 803657) / (1+r) ^ 3

we get 25.87 or 26%

Yes.

"Suppose that a worker in Lago can produce either 5 units of oats or 20 pounds of tuna per year, and a worker in Abuta can produce either 20 units of oats or 5 pounds of tuna per year. There are 20 workers in each country. No trade occurs between the two countries. Lago produces and consumes 50 units of oats and 200 pounds of tuna per year while Abuta produces and consumes 200 units of oats and 50 pound of tuna per year. If trade were to occur, Lago would trade 60 pounds of tuna for 60 units of oats. If Lago now completely specializes in tuna production, how many pounds of tuna could it now consume along with the 60 units of imported oats?"

Answers

Answer:

140 pounds of tuna

Explanation:

Lago

opportunity cost of producing 1 unit of oat = 20 / 5 = 4 pounds of tunaopportunity cost of producing 1 pound of tuna = 5 / 20 = 0.25 units of oat

Abuta

opportunity cost of producing 1 unit of oat = 5 / 20 = 0.25 pounds of tunaopportunity cost of producing 1 pound of tuna = 20 / 5 = 4 units of oat

Lago should produce tuna while Abuta should produce oat. If they specialize:

total production of tuna = 20 x 20 = 400 pounds total production of oat = 20 x 20 = 400 units

Lago trades 60 pounds of tuna in exchange for 60 units of oat, so it will have 140 pounds of tuna and 60 units of oat in total.

True or False: The term “academic training” refers primarily to formal classes taken in school.

Answers

Answer:

False

Explanation:

False. Jfcdfvbkkgfgfghbn

the president is considering placing a tariff on the import of japanese luxury cars. Using the model presented in this chapter, discuss the economics and politics of such a policy. In particular, how would the policy affect the U.S. trade deficit

Answers

Answer:

In the clarification portion below, the definition of the list of questions is mentioned.

Explanation:

The premium car tariff will have little effect on net exporting as it does not affect national savings or spending. However, reducing U.S. demand for auto component imports, it will change the NX curve. This move in the curve would improve the number of trade. There will be no shift in net exports since the value of all exporters and importers will decrease by the same level. The conceptual consequences of this approach are therefore significant. On the industrial side, the elevated exchange rate raises shipments and places strain on American companies' profits, except for American tariff-shielded premium car production. The stronger currency would also affect American export markets, making their import duties increasingly costly towards foreign nations.The tariffs would harm buyers of Japanese luxury vehicles, while all other customers would benefit from either the valued currency, which helps them to buy products at a lower cost.

On December 29, 2020, an employee received a $5,000 check from her employer's client. The check was payable to the employer. The employee did not remit the funds to the employer until December 30, 2020. The employer deposited the check on December 31, 2020, but the bank did not credit the employer's bank account until January 2, 2021. Complete the statement below regarding when the cash basis employer is required to include the $5,000 in gross income. In because a check received considered a cash equivalent and a cash basis taxpayer must recognize the income when the check is .

Answers

Answer:

In 2020 because a check received IS considered a cash equivalent and a cash basis taxpayer must recognize the income when the check is RECEIVED.

Explanation:

Checks are basically cash, that is why you record a cash disbursement once you issue a check, not when the check is cashed. Once a check has been issued or received, a cash transaction has been made. A cash basis taxpayer must record revenue when it collects it, and collecting a check is equivalent to collecting cash.

The Department of Transportation plans to build a temporary bridge to reduce travel time during the three years it will take to renovate the Pulaski Skyway, an important bridge for commuters. The temporary bridge can be put up in a few weeks at a cost of $48 million. At the end of three years, the bridge would be decommissioned and the steel would be sold for scrap. The real net cost of decommissioning would be $3 million, after accounting for scrap sales. Based on estimated time savings and wage rates, fuel savings, and reductions in risks of accidents, department analysts predict that the benefits in real dollars would be $15,900,000 during the first year, $18,900,000 during the second year, and $19,000,000 during the third year. Departmental regulations require use of a real discount rate of 4 percent. (a) Calculate the net present value of the temporary bridge assuming that the benefits are realized at the end of each of the three years. (b) Calculate the net present value of the temporary bridge assuming that the benefits are realized at the beginning of each of the three years. (c) Calculate the net present value of the temporary bridge assuming that the benefits are realized in the middle of each of the three years. (d) Does it make sense for the Department of Transportation to build the temporary bridge?

Answers

Answer:

required investment:

building costs = $48 million

decommissioning costs = $3 (at the end of year 3)

benefits:

year 1 = $15,900,000

year 2 = $18,900,000

year 3 = $19,000,000

discount rate = 4%

I rounded my calculations to the nearest thousand:

a) NPV = -48 + 15,900/1.04 + 18,900/1.04² + 16,000/1.04³ = -$1,013,000

b) NPV = -48 + 15,900 + 18,900/1.04 + 19,000/1.04² - 3/1.04³ = $973,000

c) NPV = -48 + 15,900/1.04⁰°⁵ + 18,900/1.04¹°⁵ + 19,000/1.04²°⁵ - 3,000/1.04³ = -$31,000

d) From a strictly financial point of view and only considering the 3 previous calculations, the project should be rejected. Two out of 3 options yield a negative NPV.

Ampco Disk Company operates a computer disk manufacturing plant. Direct materials are added at the end of the process. The following data were for August 20X5: Work in process, beginning inventory 100,000 units Transferred-in costs (100% complete) Direct materials (0% complete) Conversion costs (90% complete) Transferred in during current period 300,000 units Completed and transferred out 250,000 units Work in process, ending inventory 50,000 Transferred-in costs (100% complete) Direct materials (0% complete) Conversion costs (65% complete)Calculate equivalent units for conversion costs using the FIFO method. a. 30,280 units.b. 299,800 units.c. 390,580 units.d. 353,400 units.

Answers

Answer:

Total Equivalent units=292,500units

Explanation:

Calculation for the equivalent units for conversion costs

Beginning work in process 10,000 units

(100,000 × 0.10)

Completed and transferred out 250,000 units

Ending work in process 32,500, units

(50,000 × 0.65)

Total Equivalent units=292,500units

Therefore the equivalent units for conversion costs Will be 292,500units

The Ampco Disk Company will report equivalent units for Conversion Costs using the FIFO method as $292,500 units.

Data and Calculations:

                                               Physical  Transferred-in    Direct      Conversion

                                                   Units                              Materials       Costs

Beginning inventory                 100,000       100%              0%               90%

Transferred in period              300,000

Available units                         400,000

Completed & transferred out 250,000

Ending inventory                      50,000

Equivalent units:

                                         Physical  Transferred-in   Direct      Conversion

                                             Units                            Materials       Costs

Beginning inventory          100,000       0 (0%)       0 (0%)      10,000 (10%)

Started and transferred   250,000    250,000   250,000  250,000 (100%)

Ending inventory                50,000      50,000      0 (0%)      32,500 (65%)

Total equivalent units                         300,000   250,000  292,500

Thus, the equivalent units for Conversion Costs under the FIFO method is 292,500 units.

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A city keeps track of the number of new small businesses which open in any given year, as well as how many of those
new businesses report profit in excess of their initial investment after one year's time. An example of the data collected
can be viewed in the table below.
2000
Year
New
1998
781
1999
699
626
217
2001
730
264
2002
762
244
Profitable
311
205
If 684 new small businesses opened in 2003, approximately how many of them could be expected to turn a profit in
excess of their initial investment by 2004?
a 200
b. 236
c. 247
d. 272

Answers

C. It would make sense with what the problem is

Answer:

It's 236

Explanation:

Edge2020 ignore the other guy

Ledger accounts have been opened using the balances from the adjusted trial balance. Post the closing entries to the general ledger in RED order and calculate ending balances for each account. For accounts that have a zero balance, enter the zero on the normal balance side.Date Accounts and Explanation Debit Credit Dec. 31 Service Revenue 198,900 Retained Earnings 198,900 To close Revenue Date Accounts and Explanation Debit Credit Dec. 31 Retained Earnings 20,000 Dividends 20,000 To close Dividends Date Accounts and Explanation Debit Credit Dec. 31 Retained Earnings 81,000 Selling Expenses 15000 Advertising Expense 8000 Salaries Expense 10000 Depreciation Expense-- 7000 Furniture Utilities Expense 6000 Income Tax Expense 5,000Date Accounts and Explanation Debit Credit Dec. 31 Retained Earnings 81,000 Selling Expenses 15000 Advertising Expense 8000 Salaries Expense 10000 Depreciation Expense-- 7000 Furniture Utilities Expense 6000 Income Tax Expense 5000 Rent Expense 24000 Insurance Expense 4000 Supplies Expense 2,000

Answers

Answer: See explanation

Explanation:

The adjusted trial balance is simply defined as an internal document whereby both the titles and balances of the general ledger account when an adjustments have been done are listed.

Even though it isn't a financial statement, it is shown in the financial statements.

The question has been solved and attached.

Which of the following best describes the main difference between B2B and B2C transactions? B2B transactions involve transactions where the buyers and sellers are both businesses, while B2C involves transactions between businesses and consumers. B2B transactions focus on financial transactions while B2C e-commerce focuses on the sale of manufactured goods. B2B transactions refer to business between nonprofit organizations while B2C e-commerce is carried out by business firms seeking to earn a profit. B2B transactions involve sales in foreign markets while B2C e-commerce is restricted to domestic markets.

Answers

Answer: B2B transactions involve transactions where the buyers and sellers are both businesses, while B2C involves transactions between businesses and consumers.

Explanation:

Business-to-business transactions are simply regarded as the transactions that takes place between one business and another business. This can occur when the business is looking for inputs for its production process.

Business-to-consumer transactions simply regarded as the transactions that takes place between a business and the customers. This occurs when a business sells its goods or services to the customers directly without the goods passing through the middlemen.

Exercise 6-8 Petty cash fund with a shortage LO P2 Waupaca Company establishes a $330 petty cash fund on September 9. On September 30, the fund shows $46 in cash along with receipts for the following expenditures: transportation-in, $52; postage expenses, $71; and miscellaneous expenses, $147. The petty cashier could not account for a $14 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $385.

Answers

Answer:

September 29, 202x, petty cash fund established

Dr Petty cash fund 330

    Cr Cash 330

September 30, 202x, petty cash fund's expenses

Dr Transportation expenses 52

Dr Postage expenses 71

Dr Miscellaneous expenses 147

Dr Cash short and over 14

    Cr Petty cash fund 284

September 30, 202x, petty cash fund replenished

Dr Petty cash fund 284

    Cr Cash 284

October 1, 202x, petty cash fund is increased

Dr Petty cash fund 55

    Cr Cash 55

PLEASE HELP!!! I need to come up with a unique store that would be convenient in a high school. It can be one that sells food, etc.

Answers

A few ideas for useful stores are
-Tutoring Hiring
-Energy Drink/Coffee Station
-Simple drinks such as waters and sodas
Let me know if you need more!

Andrew is the chief financial officer for Glowlight Industries. Glowlight has been involved in a number of negotiations for acquisitions in the last few years, and Andrew feels the CEO is overly focused on making an acquisition. Andrew thinks the board of directors should

Answers

Answer: A) establish a system of checks and balances to challenge the CEO regarding proposed acquisitions.

Explanation:

If Andrew feels like the CEO is overly focused on making an acquisition with no business basis to it, it would be best to find out if there are basis to what the CEO is trying to do.

One way of doing so is to get the Board of Directors to establish a system of checks and balances that will challenge the CEO when it comes to acquisitions. They will check to see why the CEO wants those acquisitions as well as limit the CEO's power to seek acquisitions haphazardly.

what are the components of egg, identify and describe each​

Answers

Eggs consist of approximately 9.5% eggshell (including shell membrane), 63% albumen, and 27.5% yolk (1) (Table 1). The main components are water (75%), proteins (12%), and lipids (12%), as well as carbohydrates and minerals (2, 3).

hope this helps

Nursing patients back to health in a hospital is a ___________ skill. (soft or hard skill)​

Answers

Answer:

Hard skill.

Explanation:

Soft skills are social skills. You dont need to be social to do this.

You work for an electronics store that is preparing for a special event to
celebrate the launch of a new game system. You will have demonstration
models set up for shoppers to try out games on the system. How can your
store use social media to prepare for this event?
A. By scheduling enough employees to work on the event day
B. By posting messages about the chance to try the new system
C. By getting permits required by the city or other local government
D. By posting messages about when employees need to be at work

Answers

Answer:

It’s B. For Apex - By posting messages about the chance to try the new system

Explanation Answered on apex

For stores, the use of social media for doing the necessary preparations for an event is  by posting messages about the chance to try the new system. Hence, Option B is correct.

What is social media?

On the internet, a platform is available which is called social media. This is the media, which is in electronic form, where people come together to share thoughts about a particular topic.

In the case of electronic stores which are preparing for a special event so that they can celebrate the launch of a new game system, they can make use of social media by utilising it as a platform for doing the necessary preparation.

They can do this by posting messages on social media about the chance opportunity for those who want to try out this new system. They can put up a video with him demonstrating the model so that it can attract shoppers for that system.

Therefore, Option B is correct.

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The following cost data for the month of May were taken from the records of the Terrence Manufacturing Company: Depreciation on factory equipment $1,000 Depreciation on sales office 500 Advertising 7,000 Wages of production workers 28,000 Raw materials used 47,000 Sales salaries and commissions 10,000 Factory rent 2,000 Factory insurance 500 Materials handling 1,500 Administrative salaries 2,000 Based upon this information, the manufacturing cost incurred during the month was: Group of answer choices

Answers

Answer:

80,000

Explanation:

Cost data of the month of May was taken from Terrence manufacturing company

The manufacturing cost incurred during the month can be calculated as follows

= wages of production workers + raw materials + materials handling + factory rent + factory insurance + depreciation of factory equipment

= 28,000 + 47,000 + 1,500 + 2,000 + 500 + 1,000

= 80,000

Hence the manufacturing cost incurred during the month is 80,000

At the end of the preceding year, XYZ Inc. had a deferred tax asset of $17,500,000, attributable to its only temporary difference of $70,000,000 for estimated expenses. At the end of the current year, the temporary difference is $45,000,000. At the beginning of the year there was no valuation account for the deferred tax asset. At year-end, XYZ Inc. now estimates that it is more likely than not that one-third of the deferred tax asset will never be realized. Taxable income is $12,000,000 for the current year and the tax rate is 25% for all years. Required: In its current year balance sheet, what amount should XYZ report as income tax payable? In its current year balance sheet, what amount should XYZ report as deferred tax asset (net of the allowance)? In its current year income statement, what should XYZ report as income tax expense? In its current year income statement, what should XYZ report as net income? Prepare the journal entry to record XYZ's income tax expense for the current year.

Answers

Answer:

Kindly check the explanation section.

Explanation:

So, we are given the following data or parameters in this particular Question which is going to help us in solving this particular Question.

=> the taxable income = $12,000,000 for the current year.

=> the tax rate is 25% for all years.

=> deferred tax asset = $17,500,000.

=> The temporary difference = $70,000,000 for estimated expenses. => "At the end of the current year, the temporary difference is $45,000,000."

So, let us dive straight into the solution;

Step one: calculate or Determine the income tax expense.

So, we have ( $45,000,000 × 25%) - $17,500,000 = − $6,250,000. This is recorded in the credit side as $6,250,000.

Step two: Determine the income tax payable.

=> taxable income × tax rate for all years = 12,000,000 × 25% = 3,000,000. This is recorded at the credit side.

Step three: Determine the valuation allowance in deferred.

The valuation allowance in deferred = 1/3[ 45,000,000 × 24] = 3,750,000. This is also recorded in the Credit side.

Where do employees on the travel and tourism industry come from?

Answers

Answer:

There are six major components of tourism, each with their own sub-components. These are: tourist boards, travel services, accommodation services, conferences and events, attractions and tourism services. Below, I will explain what each of the components offer to the tourism industry and provide some relevant examples.

Explanation:

There are six components of tourism, each with its sub-components are:

First Tourist boards,

Second Travel services,

Third Accommodation services,

Fourth Conferences, and

Fifth Events,

Sixth, Attractions and also tourism services.

What is the Travel and tourism industry?

The tourism industry also understood as the travel industry is related to the idea of people traveling to different locations, either domestically or internationally, for leisure, social or business purposes. It provides heritage, business, sports, tourism, cultural, and medical. The main objective of this sector is to develop and promote tourism, maintain the competitiveness of India as a tourist destination and improve and expand existing tourism products to ensure employment generation and economic growth. In this province, we provide details about various tourist destinations, modes of travel, accommodation, and also approved travel agents.

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Larcker Manufacturing's cost accountant has provided you with the following information for January operations. Direct materials $ 39 per unit Fixed manufacturing overhead costs $ 220,000 Sales price $ 200 per unit Variable manufacturing overhead $ 21 per unit Direct labor $ 28 per unit Fixed marketing and administrative costs $ 190,000 Units produced and sold $ 5,500 Variable marketing and administrative costs $ 8 per unit Required: a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement.

Answers

Answer:

a) gross margin income statement

Sales revenue                          $1,100,000

COGS                                        ($704,000)

Gross profit                                $396,000

Operating expenses:

variable M&A $44,000fixed M&A $190,000     ($234,000)

Operating income                     $162,000

b) contribution margin income statement

Sales revenue                                     $1,100,000

Variable costs:

direct materials $214,500direct labor $154,000variable overhead $115,500variable M&A $44,000             ($528,000)

Contribution margin                            $572,000

Period costs:

fixed overhead $220,000fixed M&A $190,000                  ($410,000)

Operating income                                $162,000

Explanation:

sale price per unit = $200

total variable costs per unit:

direct materials $39 direct labor $28variable overhead $21variable marketing and adm. $8total = $96 per unit

contribution margin per unit = $200 - $96 = $104

period costs = $220,000 (overhead) + $190,000 (marketing and adm.) = $410,000

total sales revenue = $1,100,000

total COGS:

direct materials $39 x 5,500 = $214,500direct labor $28 x 5,500 = $154,000variable overhead $21 x 5,500 = $115,500fixed overhead = $220,000total = $704,000

operating expenses:

variable marketing and adm. $8 x 5,500 = $44,000fixed marketing and adm. = $190,000total $234,000

Verano Inc. has two business divisions — a software product line and a waste water clean - up product line. The software business has a cost of equity capital of 12 % and the waste water clean - up business has a cost of equity capital of 6 %. Verano has 50% of its revenue from software and the rest from the waste water business. Verano is considering a purchase of another company in the waste water business using equity financing. What is the appropriate cost of capital to evaluate the business? 6% 9% 8% 12%

Answers

Answer:

9%

Explanation:

The weighted average cost of equity capital =

(50% x 12%) + (50% x 6%) = 9%

When a multi-product factory operates at full capacity, decisions must be made about which products to emphasize. In making such decisions, products should be ranked based on: Group of answer choices

Answers

Group of answer choices

A. selling price per unit contribution.

B. margin per unit contribution

C. margin per unit of the constraining resource.

D. unit sales volume

Answer:

C. contribution margin per unit of the constraining resource.

Explanation:

When a multi-product factory operates at full capacity, decisions must be made about which products to emphasize. In making such decisions, products should be ranked based on contribution margin per unit of the constraining resource.

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves assessing whether the diversification move A. will make the company better off because it will produce a greater number of core competencies. B. will make the company better off by improving its balance sheet strength and credit rating. C. will make the company better off by spreading shareholder risks across a greater number of businesses and industries. D. offers potential for the company's existing businesses and new businesses to perform better together under a single corporate umbrella. E. will benefit shareholders due to gains in earnings per share and faster stock price appreciation.

Answers

Answer:

A. will make the company better off because it will produce a greater number of core competencies.

Explanation:

The better-off test means that a business must benefit from the proposed diversification. This benefit van be a one time benefit or a continuous benefit

Reasons for diversification that don't pass the better of test

Diversification to diversify shareholders investments Increasing the size of the company.

The CEO of Harding Media Inc. as asked you to help estimate its cost of common equity. You have obtained the following data: D 0 = $0.85; P0 = $22.00; and dividend growth rate = 6.00% (constant). The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $40.00. Based on the dividend growth model, by how much would the cost of common from reinvested earnings change if the stock price changes as the CEO expects? a. −1.49% b. −2.03% c. −1.84% d. −2.23% e. −1.66%

Answers

Answer:

c. −1.84%

Explanation:

the dividend growth model:

P₀ = Div₁ / (Re - g)

currently

P₀ = 22Div₁ = 0.85 x 1.06 = 0.901g = 0.06

22 = 0.901 / (Re - 0.06)

Re - 0.06 = 0.901 / 22 = 0.041

Re = 0.041 + 0.06 = 0.1009 = 10.09%

if stock price increases to $40, then

40 = 0.901 / (Re - 0.06)

Re - 0.06 = 0.901 / 40 = 0.0225

Re = 0.0225 + 0.06 = 0.0825 = 8.25%

decrease in Re = 8.25% - 10.09% = -1.84%

Gael Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 185,000 shares of stock outstanding. Under Plan II, there would be 135,000 shares of stock outstanding and $2.29 million in debt outstanding. The interest rate on the debt is 5 percent and there are no taxes. Use M&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations and round your answers to the nearest whole dollar amount, e.g., 32.)

Answers

Answer:

The value of firm under both plan is $8,473,000

Explanation:

All equity plan share Outstanding = $185,000

Plan II Number. of shares outstanding = $135,000

Debt = $2,290,000

Price per share = Amount of debt issued/(No of shares in all Equity-no of shares in debt plan)

Price per share = $2,290,000/($185,000 - $135,000)

Price per share =  $2,290,000 / $50,000

Price per share =$45.8

Value of firm under Equity plan = Number of shares * Price per share

Value of firm under Equity plan = 185000 shares * $45.8

Value of firm under Equity plan = $8,473,000

Levered plan = (Number of shares*Price per share) + Debt

Levered plan = (135,000 * $45.8) + $2,290,000

Levered plan = $6,183,000 + $2,290,000

Levered plan = $8,473,000

Hence, the value of firm under both plan is $8,473,000

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