Answer:
Hong-Kong has the maximum weighted score. Hence, it will be selected for the best site for the construction of warehousing/distribution center.
Explanation:
SHANGHAI
Weight Shanghai Weighted Score(W*S)
Political Stability 0.25 50 12.5
Economic Growth 0.18 90 16.2
Port Facilities 0.15 60 9
Container support 0.1 50 5
Land & Construction 0.08 90 7.2
Trans/Distribution 0.08 50 4
Duties & Tariffs 0.07 70 4.9
Trade Regulations 0.05 70 3.5
Airline Service 0.02 60 1.2
Area Roads 0.02 60 1.2
TOTAL 64.7
HONG-KONG
Weight Hong-Kong Weighted Score(W*S)
Political Stability 0.25 80 20
Economic Growth 0.18 80 14.4
Port Facilities 0.15 95 14.25
Container support 0.1 80 8
Land & Construction 0.08 50 4
Trans/Distribution 0.08 80 6.4
Duties & Tariffs 0.07 90 6.3
Trade Regulations 0.05 95 4.75
Airline Service 0.02 80 1.6
Area Roads 0.02 70 1.4
TOTAL 81.1
SINGAPORE
Weight Singapore Weighted Score(W*S)
Political Stability 0.25 90 22.5
Economic Growth 0.18 75 13.5
Port Facilities 0.15 90 13.5
Container support 0.1 90 9
Land & Construction 0.08 30 2.4
Trans/Distribution 0.08 70 5.6
Duties & Tariffs 0.07 90 6.3
Trade Regulations 0.05 95 4.75
Airline Service 0.02 70 1.4
Area Roads 0.02 80 1.6
TOTAL 80.55
Surveys show that a small increase in the price of one brand of gasoline (e.g. Shell or Irving) will cause most people to switch to other brands. This finding suggests that the demand curve for an individual brand of gasoline is:
Answer:
Relative elastic
Explanation:
Elastic demand means that quantity demanded is sensitive to price changes.
A small change in price leads to a greater change in quantity demanded
Where would you go in QuickBooks Online to see the range of default and extra lists that are available? a) Sales Center, then Settings and All Lists b) + New button and All Lists c) Gear icon and All Lists d) Sales Center, then Settings and Add Lists
Answer: c) Gear icon and All Lists
Explanation:
Quickbooks is an accounting software that provides accounting services to mostly small to medium scale businesses. They also provide cloud services to improve the convenience of accessing their services.
When one is trying to locate the range of default and extra lists that are available, they should click on the Gear icon and then under the Lists menu click on the first option which will be All Lists. The needed data will be there.
A buyer told broker Lena that she wants to move to a Cuban neighborhood. Then the buyer asked if Lena could show her the best home in a Cuban area. How should Lena respond to this request?
Answer & Explanation: Lena would respond to the buyer's request of wanting a house in the Cuban neighborhood by explaining to her that legally and ethically, she cannot provide housing recommendations based on national origin as it is a form of housing discrimination which is enshrined in the Fair Housing Act. The Act can take several forms, one of which is discrimination based on national origin.
Swifty Corporation incurs the following costs to produce 8600 units of a subcomponent: Direct materials $7224 Direct labor 9718 Variable overhead 10836 Fixed overhead 16200 An outside supplier has offered to sell Swifty the subcomponent for $2.85 a unit. If Swifty could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by
Answer:
increased by $6,268
Explanation:
The computation of the change in the net income is shown below:
Particulars Make Buy Difference
Direct materials $7,224 $0 $7,224
Direct labor $9,718 $0 $9,718
Variable overhead $10,836 $0 $10,836
Fixed overhead $16,200 $13,200 $3,000
Purchase price
(8,600 units × $2.85) $0 $24,510 -$24,510
Change in income $43,978 $37,710 $6268
Net income would increased by $6,268 if the order is accepted
Here I Sit Sofas has 6,000 shares of common stock outstanding at a price of $83 per share. There are 710 bonds that mature in 19 years with a coupon rate of 5.7 percent paid semiannually. The bonds have a par value of $1,000 each and sell at 94 percent of par. The company also has 4,900 shares of preferred stock outstanding at a price of $36 per share. What is the capital structure weight of the debt
Answer:
49.7392%
Explanation:
The computation of the capital structure weight of the debt is shown below:
But before that we need to determine the following calculations
Equity market value is
= number of shares × price per share
= 6,000 shares × $83
= 498,000
Current debt value = number of bonds × price per bond
= 710 × (94% × 1000)
= 667,400
Preferred stock value is
= number of shares × price per share
= 4,900 × $36
= 176,400
Now Total capital is
= common equity value + debt value + preferred stock value
= $498,000 + $667,400 + $176,400
= $1,341,800
And finally
Weight of debt is
= debt value ÷ total capital
= $667,400 ÷ $1,341,800
= 0.497392
= 49.7392%
he hedge ratio of an at-the-money call option on IBM is 0.35. The hedge ratio of an at-the-money put option is -0.65. What is the hedge ratio of an at-the-money straddle position on IBM
Answer:
- 0.30
Explanation:
Given the following :
Hedge ratio of an at-the-money call option on IBM = 0.35
Hedge ratio of an at-the-money put option = - 0.65
Hedge ratio of an at-the-money straddle =?
Hedge ratio of an at-the-money straddle is given by :
(Hedge ratio of an at-the-money call option + Hedge ratio of an at-the-money put option)
Hedge ratio of an at-the-money straddle :
(0.35 + (-0.65))
= (0.35 - 0.65)
= - 0.30
Naploc Inc, operates in a perfectly competitive industry. The product Naploc wants to produce has a fixed cost of $12,000 and the following total variable cost: TVC(Q) = 4 (Q-6)3 + 200 (Q+2) for Q > 3.4 Assume company can produce any amount above 3.4 units. Naploc purchased the equipment for $12,000 and did not start production yet. Market price is $400. Tebit Inc, another company that operates in the same industry desperately needs equipment and makes an offer to Naploc. Tebit already knows Naploc’s cost structure. What is the lowest price that Tebit should offer for the equipment?
Answer: $12,000
Explanation:
Tebit should offer the amount that Naploc has spent so far on the equipment as the minimum price. Naploc has yet to start production and so has not incurred any sort of variable costs which may degrade or add to the value of the equipment.
The only cost to Naploc so far therefore as a result of the equipment is the $12,000 that has been spent on it already and this is the only relevant amount at that moment therefore it is the minimum that should be offered to entice Naploc to part with it.
Suppose you start saving for retirement by depositing $4,000 every year into your retirement account. If your annual return is 8%, how much will you have in 45 years if all of the deposits were made on the first of the year
Answer:
FV= $1,546,022.47
Explanation:
Giving the following information:
Annual deposit= $4,000
n= 45
i= 0.08
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= future value
i= interest rate
FV= {4,000*[(1.08^45) - 1]} / 0.08
FV= $1,546,022.47
Have you faced similar or different exchanges in your retail shopping experience with employees of different generational cohorts?
Answer:
I have faced different exchanges with employees of different generational cohorts; in my retail shopping experiences.
Explanation:
1. The older generation (45 and above)
Positive experience:
They are very calm, patient, and motherly/fatherly. They are meticulous and work with a good mind.
Negative experience:
They can be slow or weak at times. They are seldom not so knowledgeable about the stall operations and have to refer customers to younger members of staff when they (customers) have extra needs.
2. The middle-aged generation (32-44)
Positive experience:
They are the most knowledgeable about stall operations; especially due to prior experience as employees in the retail shopping industry. They are the most enthusiastic about keeping their jobs.
Negative experience:
They can be bossy or rude to other employees at times; since they have the most experience or knowledge and occupy the major positions. They are strictly professional and may not give much empathy to customers.
3. The youths and freshers (19-31)
Positive experience:
They are the most agile and willing to go on errands (both for other employees and for customers). They have the most technical expertise. They are energetic and smart.
Negative experience:
They often exhibit a nonchalant attitude. They may be late to work - for those who don't really fix their minds on the job. They easily change jobs.
Boespflug Incorporated has a $1,000,000 investment opportunity that involves sales of $900,000, fixed expenses of $225,000, and a contribution margin ratio of 30% of sales. The margin for this investment opportunity is closest to:
Answer:
. 5.0%
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Tysm!
The margin for this investment opportunity for Boespflug is closest to 0.5%.
What is an investment opportunity ?A wise way to manage your finances and grow your wealth is through investing. If you choose wisely while investing your money, it may increase in value and outpace inflation. Investment has a bigger growth potential mostly due to the power of compounded and the trade-off between risk and return.
An investment opportunity is any tangible or intangible thing that is being offered, put up for sale, sold, or exchanged based fully or substantially on promises made about past, current, or future income, profit, or appreciation. These promises may be expressed expressly or implicitly.
Contribution margin= (30% × $900,000) = $ 270,000
Fixed expenses= 225,000
Net operating income= $ 45,000
Margin = Net operating income ÷ Sales
= $45,000 ÷ $900,000 = 5.0%
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A company uses the weighted average method for inventory costing. At the start of a period the production department had 48,000 units in beginning Work in Process inventory which were 36% complete; the department completed and transferred 171,000 units. At the end of the period, 18,000 units were in the ending Work in Process inventory and are 71% complete. The production department had conversion costs in the beginning work in process inventory of $93,000 and total conversion costs added during the period are $726,700. Compute the conversion cost per equivalent unit.
Answer:
the conversion cost per equivalent unit is $4.46.
Explanation:
Step 1 : Computation of equivalent units of production for conversion costs
Units completed and transferred (171,000 × 100%) = 171,000
Units in the ending work in process (18,000 × 71%) = 12,780
Equivalent units of production for conversion costs = 183,780
Step 2: Determine the Total Cost of Conversion incurred during the period
Conversion Costs in Opening Work In Process = $93,000
Add conversion costs added during the period = $726,700
Total Cost of Conversion incurred during the period = $819,700
Step 3 : Calculate the conversion cost per equivalent unit.
Conversion cost per equivalent unit = Total Cost of Conversion ÷ Equivalent units of production
= $819,700 ÷ 183,780
= $4.46
A project will generate annual cash flows of $237,000 for each of the next three years, and a cash flow of $273,800 during the fourth year. The initial cost of the project is $764,800. What is the internal rate of return of this project
Answer:
IRR = 10.68%
Explanation:
The annual cash flow of the project = $237000
Time period for annual cash flow of $237000 = 3 years
In the fourth year, the cash flow = $273800
Initial cost of the project = $764800
Now we have to find the interest rate of return by using the given information.
Let the internal rate of return = x%
Now, present value of inflows = The present value of outflows.
764800 = 237000/1.0x + 237000/1.0x^2 + 237000/1.0x^3 + 273800/1.0x^4
Thus, x = irr = 10.68%
Willco Inc manufactures electronic parts. They are analyzing their monthly maintenance costs to determine the best way to budget these costs in the future. They have collected the following data for the last 6 months: Machine Hours Maintenance Costs January 30,000 $61,946 February 40,000 $74,500 March 37,500 $65,900 April 39,000 $68,750 May 42,300 $74,000 June 35,000 $64,500 Using the high-low method, what is the fixed cost component of the monthly maintenance.
Answer:
Fixed costs= $31,312
Explanation:
Giving the following information:
January 30,000 $61,946
February 40,000 $74,500
March 37,500 $65,900
April 39,000 $68,750
May 42,300 $74,000
June 35,000 $64,500
To calculate the fixed costs under the high-low method, we need to use the following formulas:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (74,500 - 61,946) / (42,300 - 30,000)
Variable cost per unit= $1.021
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 74,500 - (1.021*42,300)
Fixed costs= $31,312
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 61,946 - (1.021*30,000)
Fixed costs= $31,316
Suppose Hale and sons purchases 800,000$ of 5% annual bonds of Mcphee Corporation at face value on January 1, 2014. These bonds pay interest on June 30 and December 31 each year. They mature on December 31, 2018. Hale intends to hold the McPhee bond investment until maturity. 1) Journalize Hale and Sons transaction related to the bonds for 2014 and then 2) journalize the entry required on the McPhee bonds maturity date.
Answer:
1) Journalize Hale and Sons transaction related to the bonds for 2014
The McPhee Corporation bonds are classified as long term assets (more than 1 year), and as held to maturity
January 1, 2014, investment in McPhee Corporation bonds
Dr Investment in McPhee Corporation bonds 800,000
Cr Cash 800,000
June 30, first coupon payment received from investment in McPhee Corporation bonds
Dr Cash 20,000
Cr Interest revenue 20,000
December 31, second coupon payment received from investment in McPhee Corporation bonds
Dr Cash 20,000
Cr Interest revenue 20,000
2) journalize the entry required on the McPhee bonds maturity date.
December 31, 2018, last coupon payment + principal received from investment in McPhee Corporation bonds
Dr Cash 820,000
Cr Investment in McPhee Corporation bonds 800,000
Cr Interest revenue 20,000
From guided notes reading of 7 skills to make mill$ :
This book focuses on _________ skills or behavioral ___________.
Answer:
From guided notes reading of 7 skills to make mill$ :
This book focuses on __soft_______ skills or behavioral ___competencies________.
Explanation:
Brooks Harper's "7 Skills to make mill$" is a motivational book which urges students to perform at their best during their school days so that they can be prepared for the work life. In a very unique manner, Brooks hampered on the importance of the seven skills, which he described with the acronym DOLLARS. These include Diligence (hard work pays), Organization (Be your CEO, developing your GPA as your Goal, Plan, and Action and not just Grade Point Average), and Leadership (by making a difference). Others include Learning (replacing ignorance with education), Accountability (Your name = Your Brand; enhance or diminish it), Relationship (a warning to mind your company), and lastly Speaking (the articulation of ideas to others). These are the keys to success in life, which must be developed during school days.
yak has a selling price of $110 per unit, and variable cost per unit of $45. At a sales volume of 350 units, net income is $10,932. If sales are 425 units, net income will be closest to: Group of answer choices
Answer:
Net income= $15,807
Explanation:
Giving the following information:
Selling price= $110 per unit
Unitary variable cost= $45
At a sales volume of 350 units, net income is $10,932.
First, we need to calculate the fixed costs:
Fixed costs= total contribution margin - net income
Fixed costs= 350*(110 - 45) - 10,932
Fixed costs= $11,818
Now, the net income for 435 units:
Net income= total contribution margin - fixed costs
Net income= 425*65 - 11,818
Net income= $15,807
Natsam Corporation has $285 million of excess cash. The firm has no debt and 549 million shares outstanding with a current market price of $11 per share. Natsam's board has decided to pay out this cash as a one-time dividend. a) What is the ex-dividend price of a share in a perfect capital market? b) If the board instead decided to use the cash to do a one-time share repurchase, in a perfect capital market, what is the price of the shares once the repurchase is complete? c) In a per
Answer:
a) $10.48
b) $11
c) option b would make investors better off
Explanation:
stock's current market price = $11
dividend per stock = $285,000,000 / 549,000,000 stocks = $0.5191
ex-dividend price per stock = stock's current market price - dividend per stock = $11 - $0.52 = $10.48
in a perfect capital market, the repurchase of stocks should not change Natsam's stock value, so it should remain at $11 per stock.
part c is missing, but I looked for similar questions and found this:
"c) In a perfect capital market, which policy in part (a) or (b) makes investors in the firm better off?"
firm z expects to earn $5 per share next year the firms roe is 15% and its plowback ratio is 70% if the firms market capitalization rate is 12% what is the present value of growth opportunities
Answer:
present value of growth opportunities is −$8.34
Explanation:
Value with no growth = expected earning / capitalization rate
Value with no growth = $5/0.12 = $41.67
Growth rate = retention rato * ROE
Growth rate = 0.7 * 15 = 10.5%
Value with growth = $5*(1-0.7)/(0.15-0.105) = $33.33
Therefore present value of growth opportunities = Value with growth - Value with no growth
PVGO = $33.33-$41.67 = −$8.34
arren has a loan with an effective interest rate of 5 percent per annum. He makes payments at the end of each year for 10 years. The first payment is 200, and each subsequent payment increases by 10 per year. Calculate the interest portion in the fifth payment.
Answer:
interest portion of fifth payment = $66.89 ≈ $67
Explanation:
effective interest rate = 5% yearly
first payment = $200
second payment = $210
third payment = $220
fourth payment = $230
fifth payment = $240
sixth payment = $250
seventh payment = $260
eighth payment = $270
ninth payment = $280
tenth = $290
using a financial calculator, I determined the present value (principal) of the loan = $1,860.87
then I prepared an amortization schedule:
interest portion of fifth payment = $66.89 ≈ $67
During the month of February, Victor Services had cash receipts of $8,400 and cash disbursements of $10,400. The February 28 cash balance was $3,600. What was the February 1 beginning cash balance?
Answer:
$5,600
Explanation:
Calculation for the beginning cash balance
Using this formula
Beginning cash balance=Cash Balance - Cash Receipts + Cash Disbursements
Let plug in the formula
Beginning cash balance=$3,600-$8,400+$10,400
Beginning cash balance=$5,600
Therefore the Beginning cash balance will be $5,600
How much can a Municipal Finance Professional (MFP) contribute to the "clean up" campaign to pay off campaign debt of an ex-issuer official that is now out of office because she lost the general election
Answer:
An unlimited amount
Explanation:
According to the Municipal Securities Rulemaking Board, given that an ex-issuer official is no longer in office and has no power to drive municipal securities business to his or her former firm in order to get a large campaign contribution in return.
His former firm, in this case, which is Municipal Finance Professional can contribute whatever amount they so wish, to the "clean up" campaign to pay off campaign debt.
Carper Company is considering a capital investment of $390,000 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $20,000 and $85,000, respectively. Carper has an 8% cost of capital rate, which is the required rate of return on the investment.
Instructions (Round to two decimals.)
(a) Compute the cash payback period.
(b) Using the discounted cash flow technique, compute the net present value.
(c) Carper was presented with a second capital investment that provided similar production facilities as the first one. This investment cost $400,000, had a useful life of 7 years with a salvage value of $15,000. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $25,000 and $80,000 respectively. Carper’s 8% cost of capital is also the required rate of return on the investment.
(1) Compute the cash payback period.
(2) Using the discounted cash flow technique, compute the net present value.
(3) Based on these calculations, which investment do you recommend? Explain why.
Answer:
a. 4.59 years
b. $2,944.77
c
1. 5 years
2. $25,261.96
3.I would recommend the second investment because the NPV for the second project is greater than that of the first project. It means that the second project is more profitable than the first project.
Explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Payback period = Amount invested / cash flow
$390,000 / $85,000 = 4.59 years
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $390,000
Cash flow each year from year 1 to 6 = $85,000
I = 8%
NPV = $2,944.77
For the second investment
Payback period = Amount invested / cash flow
$400,000 / $80,000 = 5 years
Cash flow in year 0 = -$400,000
Cash flow each year from year 1 to 6 = $80,000
Cash flow in year 7 = $80,000 + $15,000 = $95,000
I = 8%
NPV = $25,261.96
I would recommend the second investment because the NPV for the second project is greater than that of the first project. It means that the second project is more profitable than the first project.
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
According to business analyst Scott Anthony, identifying opportunities requires understanding of:_________
Answer:
the 5Cs of opportunity identication:
1. Circumstance
2. Context
3. Constraints
4. Compensating behaviors
5. Criteria
Explanation:
According to Scot Anthony, to identify opportunities it's important to understand the 5Cs of opportunity identication.
1. Circumstance: Know the specific problems which your customers care about and how they get solutions to it.
2. Context: Know what the customer did in the past and work around it to present something realistic.
3. Constraints: Get to understand customers' barriers and constraint.
4. Compensating behaviors: Understand the compensations that engage your customers.
5. Criteria: In order to know a good solution, it's important to understand the criteria that matter to your customers.
Sales tax is calculated A. based on the number of items purchased. B. using a percentage of the price of an item. C. before a sale discount is applied. D. as a percentage based on federal law.
Answer:
B. using a percentage of the price of an item
Explanation:
Sales tax is calculated using a percentage of the price of an item. Thus, option B is correct.
A sales tax on the purchase of goods and services is a type of consumption tax. At the moment of sale, a sales tax is often assessed as a percentage of the retail price. The state sales tax is in addition to any local or municipal taxes that are levied.
To figure out the sales tax due on a good or service: Understand the retail cost and the sales tax rate. To generate a decimal, reduce the sales duty percentage by 100. To get the sales tax value, multiply the retail cost by the decimal place.
Therefore, option B is correct.
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Tyler Smithson owns Joe on the Run, a small chain of three cof- fee shops, all of which are facing a challenge that is common to most service businesses: They have to deal with highly variable demand, with two or three very busy times each day. If a waiting line develops, we can assume that a constraint exists somewhere in the product or service delivery. Typical workstations behind the counter include the barista station (where specialty drinks are made), the drive-thru station, and the cashier station. Because the goal of the company is to satisfy the most customers pos- sible (and thus increase profits), a constraint at one of these workstations must be addressed quickly.
1. What can be done to improve capacity?
2. What can be done to improve efficiency?
3. What could be done at a store level to improve the performance of the business?
Answer:
A) To improve capacity the constraint that must be addressed is the preparation and dispatch constraint which is similar to all three shops.to address this a central preparation / dispatch center that serves all three shops the needed products should be created independently, with the primary purpose of mass preparation/dispatch to the coffee shops and not attending to customers which hampers the production of the three shops.
B ) To improve efficiency: packaging should be made ready at the drive thru station so that customer who drive in can quickly pick up the package without having to queue up for long. also consider preparing some orders on the menu that attracts the most customers ahead of time this way the queue would be reduced.
C ) At store level to improve performance proper stock taking should be essential to ensure there is enough products on the menu to serve to the customers
Explanation:
A) To improve capacity the constraint that must be addressed is the preparation and dispatch constraint which is similar to all three shops.to address this a central preparation / dispatch center that serves all three shops the needed products should be created independently, with the primary purpose of mass preparation/dispatch to the coffee shops and not attending to customers which hampers the production of the three shops.
B ) To improve efficiency: packaging should be made ready at the drive thru station so that customer who drive in can quickly pick up the package without having to queue up for long. also consider preparing some orders on the menu that attracts the most customers ahead of time this way the queue would be reduced.
C ) At store level to improve performance proper stock taking should be essential to ensure there is enough products on the menu to serve to the customers
Assume the United States economy has the following:
• GDP is $18,500 billion down from $19,350 billion nine months ago.
• Unemployment is at 7.8% up from 4.2% nine months ago.
• Inflation is stable at 2.0%.
• MPC=0.75
• NRU=4.0%
• Target Inflation is 2.0%
Required:
a. Explain in detail the problem the country is facing. Include an analysis of both inflation and unemployment including whether the economy is in a recession or not.
b. What is the size of the GDP gap? Show the calculations.
c. Government could address the problem with either increasing government spending, cutting taxes or both. If the government decided to increase spending to address the problem, by how much should spending be increased? If the government decided to cut taxes to address the problem, by how much should taxes be cut? Show the calculations and provide explanations.
d. Should the government cut taxes or increase spending or some combination of both to address the problem?
e. What could happen to make the policy you recommended?
Answer:
Note: the e question is incomplete. The missing part is "you recommended in Question 4 ineffective?"
1. When the GDP has decreased, but the unemployment has increased, there is slowdown in the economy. Therefore, this slowdown combined with the stable inflation points that the economy is in recession.
2. GDP gap = Actual GDP - Potential GDP
GDP gap = $18,500 billion - $19,350 billion
GDP gap = -$850 billion
GDP gap is the difference between the actual and potential GDP.
3. Calculation of the government expenditure multiplier and tax multiplier
Government spending multiplier = 1 / (1-MPC)
Government spending multiplier = 1/(1-0.75)
Government spending multiplier = 1/0.25
Government spending multiplier = 4
Tax Multiplier = -MPC / (1-MPC)
Tax Multiplier = -0.75 / (1-0.75)
Tax Multiplier = -0.75 / 0.25
Tax Multiplier = -3
Calculation of the required increase in government spending
ΔG = ΔY/Government spending multiplier
ΔG = $850 billion / 4
ΔG = $212.5 billion
Calculation of the required cut in taxes
ΔY = Tax multiplier * ΔT
ΔT = ΔY / Government spending multiplier
ΔT = $850 billion / -3
ΔT = -$283.33 billion
Therefore, the government spending should increase by $212.5 billion and taxes should cut by $283.33 billion.
4. The government should opt for increasing government spending, this is because the government spending multiplier is greater than the tax multiplier.
5. If there is not direct impact on inflation after the increase in government spending
Schrand Aerobics, Inc., rents studio space (including a sound system) and specializes in offering aerobics classes. On January 1, 2013, its beginning account balances are as follows: Cash, $5,000; Accounts Receivable, $5,200; Equipment, $0; Notes Payable, $2,500; Accounts Payable, $1,000; Common Stock, $5,500; Retained Earnings, $1,200; Services Revenue, $0; Rent Expense, $0; Advertising Expense, $0; Wages Expense, $0; Utilities Expense, $0; Interest Expense, $0.
The following transactions occurred during January.
(1) Paid $600 cash toward accounts payable
(2) Paid $3,600 cash for January rent
(3) Billed clients $11,500 for January classes
(4) Received $500 invoice from supplier for T-shirts given to January class members as an advertising promotion
(5) Collected $10,000 cash from clients previously billed for services rendered
(6) Paid $2,400 cash for employee wages
(7) Received $680 invoice for January utilities expense
(8) Paid $20 cash to bank as January interest on notes payable
(9) Declared and paid $900 cash dividend to stockholders
(10) Paid $4,000 cash on January 31 to purchase sound equipment to replace the rental system
Required:
a. Prepare journal entries for each of the transactions 1 through 10.
b. Set up acounts,including beginning balances,for cach of the accounts used in part a. Post the journal entries to those T-accounts.
Answer:
Schrand Aerobics, Inc.
a. Journal Entries:
Debit Accounts Payable $600
Credit Cash $600
To record the payment of cash.
Debit Rent $3,600
Credit Cash $3,600
To record the payment of cash.
Debit Accounts Receivable $11,500
Credit Service Revenue $11,500
To record the billing of clients.
Debit Advertising $500
Credit Accounts Payable $500
To record advertising promotion
Debit Cash $10,000
Credit Accounts receivable $10,000
To record the receipt of cash.
Debit Wages $2,400
Credit Cash $2,400
To record the payment of cash
Debit Utilities $680
Credit Accounts Payable $680
To record utilities expense.
Debit Interest $20
Credit Cash $20
To record the payment of interest on notes payable.
Debit Retained Earnings $900
Credit Cash $900
To record the payment of dividends.
Debit Equipment $4,000
Credit Cash $4,000
To record the payment for purchase of sound equipments.
b. T-Accounts:
Cash
Description Debit Credit Balance
Balance $5,000
Accounts payable $600 4,400
Rent 3,600 800
Accounts receivable 10,000 10,800
Wages 2,400 8,400
Interest 20 8,380
Dividend 900 7,480
Equipment 4,000 3,480
Accounts Receivable
Description Debit Credit Balance
Balance $5,200
Service Revenue 11,500 16,700
Cash 10,000 6,700
Equipment
Description Debit Credit Balance
Cash $4,000 $4,000
Notes Payable
Description Debit Credit Balance
Balance $2,500
Accounts Payable
Description Debit Credit Balance
Balance $1,000
Cash $600 400
Advertising $500 900
Utilities 680 1,580
Common Stock
Description Debit Credit Balance
Balance $5,500
Retained Earnings
Description Debit Credit Balance
Balance $1,200
Dividends $900 300
Services Revenue
Description Debit Credit Balance
Accounts receivable $11,500 $11,500
Rent Expense
Description Debit Credit Balance
Cash $3,600 $3,600
Advertising Expense
Description Debit Credit Balance
Accounts payable $500 $500
Wages Expense
Description Debit Credit Balance
Cash $2,400 $2,400
Utilities Expense
Description Debit Credit Balance
Utilities payable $680 $680
Interest Expense
Description Debit Credit Balance
Cash $20 $20
Explanation:
Journal entries record the transactions initially with debit and credit to the accounts affected.
The T-accounts is the general ledger accounts where transactions are summarized and a balance for each account is obtained.
Management anticipates fixed costs of $72,700 and variable costs equal to 44% of sales. What will pretax income equal if sales are $327,000?
a) $143,880.
b) $254,300.
c) $110,420.
d) $71,180.
e) $189,090.
Answer:
$110,420
Explanation:
Given that;
Fixed cost = $72,700
Variable costs = $44%
Sales = $327,000
The formula for pretax income is
= Sales - variable costs - fixed costs
= $327,000 - $143,880 - $72,700
= $110,420
Pretax income is $110,420
Data concerning A Corporation's single product appear below:
Per Unit Percent of Sales
Selling price $ 160 100%
Variable expenses 48 30%
Contribution margin $ 112 70%
Fixed expenses are $1,054,000 per month. The company is currently selling 9,800 units per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $8 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $100,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units.
What should be the overall effect on the company's monthly net operating income of this change?
Answer:
Effect on income= $73,600 increase
Explanation:
Giving the following information:
Contribution margin $ 112
Increase in variable cost= $8 per unit.
Decrease in fixed costs= $100,000 per month.
Increase in sales unit= 500 units
To calculate the effect on income, we need to use the following formula:
Effect on income= effect on total contribution margin + decrease in fixed costs
Effect on income= 500*104 - 9,800*8 + 100,000
Effect on income= $73,600 increase
At Ameri-Tee while United States nationals staff key postitions at its Houston, Texas headquarters, it recruits locals to manage subsidiaries in each country that it goes into. Which of the following is an advantage of America-Tee’s staffing approach?
Answer:
The answer is "Compared with the other staffing approaches it's much less expensive to implement".
Explanation:
Ameri-Tee employees are the local residents for mangers the subsidiary companies from every nation and it joins in comparison to many other probably work, that would be the advantage of America-Tee 's approach to staffing, whereas Ameri- Tee implements key positions at its head office in Houston Texas.