Answer:
the costs of producing the parts is $12,000 less than buying them from an outside vendor
Explanation:
production costs (60,000 units)
variable $2.30 per unit
fixed (avoidable) $1 per unit
fixed (unavoidable) $0.75 per unit
total $4.05 per unit
price from outside supplier $3.50 per unit
total incremental cost of buying from outside supplier = (60,000 x $3.50) + (60,000 x $0.75) = $210,000 + $45,000 = $255,000
production costs to manufacture = 60,000 x $4.05 = $243,000
the costs of producing the parts is $12,000 less than buying them from an outside vendor
On March 1, 2012, Kelly Company lent $3,500 to Tim on a 1-year 6% promissory note. The amount of interest to be accrued on December 31 will be:
Answer:
$210
Explanation:
Calculation for what the amount of interest to be accrued on December 31 will be
Using this formula
Accrued interest =Amount lent×Promissory note percentage
Let plug in the formula
Accrued interest=$3,500×6%
Accrued interest=$210
Therefore the amount of interest to be accrued on December 31 will be $210
The outstanding bonds of Riverside Tires Inc. provide a real rate of return of 5.6 percent. If the current rate of inflation is 4.68 percent, what is the actual nominal rate of return on these bonds
Answer: 10.54%
Explanation:
The Real rate of return is calculated as;
(1 + Real Rate) = (1 + Nominal Rate) / (1 + Inflation Rate)
1 + 0.056 = ( 1 + n) / ( 1 + 0.0468)
1.056 = (1 + n) / 1.0468
1.1054208 = 1 + n
n = 0.1054208
n = 10.54%
Schrute Farm Sales buys portable generators for and sells them for He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays a month rent for his store, and also pays a month to his staff in addition to the commissions. Mr. Schrute sold generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his operating income?
Complete question :
Schrute Farm Sales buys portable generators for $470 and sells them for $740. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $5,000 a month rent for his store, and also pays $2,200 a month to his staff in addition to the commissions. Mr. Schrute sold 600 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his contribution margin? O A $444,000 O B. $139,800 O C. $748.200 D. $304 200
Answer:
139,800
Explanation:
Total Revenue = (quantity sold * price) = (600 * $740) = $444,000
Purchase cost = (purchase price * quantity) = (470 * 600) = $282,000
Variable selling cost = 5% of total revenue = (0.05 * 444,000) = $22,200
Total variable cost = (cost of purchase + variable selling price) = $(282,000 + 22,200) = $304,200
Contribution margin = (revenue - variable cost) = (444,000 - 304,000) = $139,800
Therefore, CONTRIBUTION MARGIN = $139,800
Justin Time Guitars manufactures electric guitars. The following data relate to the standards for direct labor: Standard direct labor hours per guitar Standard direct labor rate per hour Justin Time had the following actual results for March: Actual direct labor hours Actual total direct labor cost Actual number of guitars produced What is the direct labor efficiency variance for March?
Question
Justin Time Guitars manufactures electric guitars. The following data relate to the standards for direct labor: Standard direct labor hours per guitar Standard direct labor rate per hour Justin Time had the following actual results for March: Actual direct labor hours Actual total direct labor cost Actual number of guitars produced What is the direct labor efficiency variance for March?
standard Ditect labour hour 3.5
Standard direct labour rate $17
Actual direct labour hour 650
Actual direct labour cost 26200
Actual number of guitars produced - 525
Answer
Efficiency variance =$20,187.5
Explanation
Labour efficiency variance is the difference between the actual time taken to achieve a given production output less the standard hours allowed for same multiplied by the standard labour rate
Hours
525 units should have taken (525× 3.5) = 1,837.5
but did take 650
efficiency variance (hours) 1187.5 favorable
standard labor rate × $ 17
Efficiency variance ($) $20,187.5 favorable
Efficiency variance =$20,187.5
Managerial accounting reporting by a public firm is required to follow the rules of GAAP.
a. True
b. False
Answer:
b. False
Explanation:
Only external reports which are used by various stakeholders (Investors, customers, tax authorities, banks, suppliers etc.) are required to follow reporting framework laid out in GAAP.
However, for Managerial reporting , no strict requirements are set for the preparation of reports as the management use various reporting styles to manage business performance. An example is the use of Variable Costing Income Statements that show the relationship between outputs and costs resulting from different activity levels.
"Customer Z is a single 26-year-old man who earns $125,000 annually. He informs you that he is getting married and that his new wife's income of $75,000 per year will put them into the highest federal tax bracket. The couple will have investable income of $25,000 per year. The couple wishes to buy a house in 5 years that will be substantially more expensive than the condominium in which they currently reside. To meet the customer's needs for the large cash down payment in 5 years and to reduce taxable income, the BEST recommendation is to:"
Answer:
In order to reduce taxable income and at the same time meet the customer's need for a large cash down payment, you should advice him to invest in stocks. The stock market generally yields high returns and since the customer is young, he can afford the risk. Also, and probably most important, capital stock gains are taxed at a much lower rate than interest income (vs investing in bonds).
JoPacks sold 500 backpacks in September. Total variable costs were $7,500, total fixed costs were $10,000, and profit was $4,000. If JP sold 1,000 backpacks, what would their profit be
Answer:
$18,000
Explanation:
Total revenue - total cost = profit
total cost = variable cost + fixed cost
when 500 units were sold
total revenue - ( $10,000 + $7,500) = $4,000.
revenue = $21,500
to determine profit when 1000 units are sold, we have to determine the price and average variable cost
Price = revenue / total unit sold = $21,500 / 500 = $43
Average variable cost = $7,500 / 500 = $15
For 1000 units sold
revenue = price x units sold = 1000 x $43 = $43,000
total variable cost = $15 x 1000 = $15,000
total cost = $15,000 + $10,000 = $25,000
Profit = $43,000 - $25,000 = $18,000
"Your customer, age 68, who has an IRA account at your firm valued at $500,000, passes away. The customer leaves the account to his wife, age 62, who does not work. She needs current income and wishes to receive payments over the longest time frame possible. You should advise the spouse to:"
Answer:
My best advice for the spouse would be to designate herself as the new account owner, and since she is 62, she can start taking regular distributions from it. Any distributions that she takes will be taxed as ordinary income (the same rule would have applied to the late husband).
Explanation:
If she had her own IRA account (which is doubtful since she doesn't work), she could also roll over her late spouse's balance into her own account.
The wife's third option would be to treat herself as a beneficiary, not the owner or spouse, but that would only complicate things and result in higher costs.
You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2,800,000 purchase price. The monthly payment on this loan will be $17,000. a. What is the APR on this loan
Answer:
the APR on this loan is 8.68 %.
Explanation:
First determine the nominal rate compounded monthly on this mortgage as follows :
n = 30 × 12 = 360
Pv = $2,800,000 × 80% = $2,240,000
pmt = - $17,000
p/yr = 12
FV = $0
r = ?
Using a Financial Calculator, the nominal rate compounded monthly, r on this mortgage is 8.3588 or 8.36 %.
Then, find the Annual Percentage Rate :
8.36 Shift NOM %
12 Shift P/YR
Shift EFF% 8.68 %
Again using a Financial calculator as above, the APR on this loan will be 8.6879 or 8.68 %
A project that provides annual cash flows of $18,200 for nine years costs $88,000 today.
What is the NPV for the project if the required return is 8 percent? (Round your answer to 2 decimal places. (e.g., 32.16))
a. At a required return of 8 percent, should the firm accept this project?
Accept
Reject
b. What is the NPV for the project if the required return is 20 percent? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))
c. At a required return of 20 percent, should the firm accept this project?
Accept
Reject
d. At what discount rate would you be indifferent between accepting the project and rejecting it? (Round your answer to 2 decimal places. (e.g., 32.16))
Answer:
a) the project should be accepted because its NPV is positive ($25,693.36)
b) if the required rate of return is 20%, the NPV = -$14,636.41
c) the project should be rejected because its NPV is negative
Explanation:
initial outlay year 0 -$88,000
cash flows years 1 - 9= $18,200
required rate of return = 8%
NPV = $25,693.36
required rate of return = 20%
NPV = -$14,636.41
the project's IRR = 14.63%
The elapsed time between an order's receipt, delivery, and payment is called the:_______.
• product-to-payment cycle
• order cycle
• order-to-payment cycle
• inventory-to-sale cycle
• variable-costs-to-payment cycle
Answer:
Option C (order-to-payment cycle) seems to be the correct approach.
Explanation:
A journal article directing the monetary compensation, formulated between one individual or financial institution on some other commercial invoice.Draught reasonable opportunity of being heard-an an estimated standard and sometimes agreement to overdraft a sum of money-a draught exceeding the outstanding balances.The other options in question are not connected to the given instance. So that the option however is the right choice.
The manager of a crew that installs carpeting has tracked the crew's output over the past several weeks, obtaining the figure:
Week Crew Size Yards Installed
1 4 96
2 3 72
3 4 92
4 2 50
5 3 69
6 2 52
Compute labor productivity for each of the weeks. On the basis of your calculations, what can you conclude about crew size and productivity?
Answer:
Week Crew Size Yards Installed
1 4 96
2 3 72
3 4 92
4 2 50
5 3 69
6 2 52
labor productivity = total output / number of employees
week 1 ⇒ 96 / 4 = 24 yards installed per worker
week 2 ⇒ 72 / 3 = 24 yards installed per worker
week 3 ⇒ 92 / 4 = 23 yards installed per worker
week 4 ⇒ 50 / 2 = 25 yards installed per worker
week 5 ⇒ 69 / 3 = 23 yards installed per worker
week 6 ⇒ 52 / 2 = 26 yards installed per worker
The crew size that results in the highest productivity is 2 workers per crew, and they install between 25-26 yards per worker.
The other crew sizes (3 or 4 workers) have a productivity of 23-24 yards per worker.
Calculate the elasticity of a call option with a premium of $6.50 and a strike price of $61. The call has a hedge ratio of 0.7, and the underlying stock’s price is currently $47.
Answer:
The Elasticity of the call option = [tex]\mathbf{ 5.06 \%}[/tex]
Explanation:
From the given information:
For $1 change in stock price
the percentage of change in stock price = ΔS/S
ΔS/S = (1× 100)/47 = 2.127659574
ΔC = hedge ratio × ΔS
ΔC = 0.7 × 1
ΔC = 0.7
However , the percentage change in the stock call option price = ΔC/C
= (0.7 × 100) / 6.50
= 70/6.50
= 10.76923077
∴
The Elasticity of the call option = [tex]\mathbf{\dfrac{percentage \ change \ in \ the \stock \ call \ option \ price }{percentage \ change \ in \ the \ stock \ price}}[/tex]
The Elasticity of the call option = [tex]\mathbf{ \dfrac{10.76923077 }{2.127659574}}[/tex]
The Elasticity of the call option = [tex]\mathbf{ 5.06 \%}[/tex]
OR
The Price Elasticity of the call option can be computed by using EXCEL FUNCTION(=B3*(B4/B1))
The illustration to that can be seen in the diagram attached below.
The Elasticity of the call option [tex]\simeq[/tex] 5.06% by using EXCEL FUNCTION.
Consider a four-year project with the following information: initial fixed asset investment = $555,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $37; variable costs = $25; fixed costs = $230,000; quantity sold = 79,000 units; tax rate = 24 percent. How sensitive is OCF to changes in quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
for every 1% increase in the quantity sold, OCF increases by 1.24%
for every 1% decrease in the quantity sold, OCF decreases by 1.24%
Explanation:
Consider a four-year project with the following information: initial fixed asset investment = $555,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $37; variable costs = $25; fixed costs = $230,000; quantity sold = 79,000 units; tax rate = 24 percent. How sensitive is OCF to changes in quantity sold?
initial outlay = $555,000
depreciation expense per year = $555,000 / 4 = $138,750
contribution margin per unit = $37 - $25 = $12
quantity sold = 79,000 units
tax rate = 24%
fixed costs = $230,000
OCF = {[(79,000 x $12) - $230,000 - $138,750] x (1 - 24%)} + $138,750 = $578,980
if sales increase by 10%, OCF = {[(86,900 x $12) - $230,000 - $138,750] x (1 - 24%)} + $138,750 = $651,028 ⇒ 12.44% increase
if sales decrease by 10%, OCF = {[(71,100 x $12) - $230,000 - $138,750] x (1 - 24%)} + $138,750 = $506,932 ⇒ 12.44% decrease
If expected dividends grow at 7% and the appropriate discount rate is 9%, what is the value of a stock with an expected dividend one year from now of $1.00?
Answer:
P0 = $49.0825 rounded off to $49.08
Explanation:
The value of a stock whose dividends are expected to grow at a constant percentage is calculated using the constant growth model of DDM or dividend discount model. The DDM values the stock based on the present value of the expected future dividends from the stock. The formula for price of the stock today under this model is,
P0 = D1 / (r - g)
Where,
D1 is the dividend expected for the next periodr is the required rate of return or discount rateg is the growth rate in dividendsTo calculate the price today or P0, we use D1. Thus, as the constant growth rate will apply from Year 2, we will first calculate the price of the stock at Year 1 or P1 using the D2. Then we will discount this P1 back to P0 by dividing it by (1+r).
P1 = 1 * (1+0.07) / (0.09 - 0.07)
P1 = $53.5
Price of the stock today is,
P0 = P1 / (1+r)
P0 = 53.5 / (1+0.09)
P0 = $49.0825 rounded off to $49.08
The value of the stock should be $50.
The calculation is as follows;The value of the stock is
= Expected dividend ÷ (required rate of return - growth rate)
= $1 ÷ (9% - 7%)
= $50
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The , , and partnership balance sheet reports capital of for , for , and for . is withdrawing from the firm. The partners have shared profits and losses in the ratio of to , to , and to . The partnership agreement states that a withdrawing partner will receive cash equal to the book value of his partners' equity. Journalize the withdrawal of .
Complete Question:
The O'Hara, Parness, and Lincoln partnership balance sheet reports capital of $50,000 for O'Hara, $125,000, for Parness, and $25,000 for Lincoln. O'Hara is withdrawing from the firm. The partners have shared profits and losses in the ratio of 1/2 to O'Hara, 1/4 to Parness, and 1/4 to Lincoln. The partnership agreement states that a withdrawing partner will receive cash equal to the book value of his partners' equity. Journalize the withdrawal of O'Hara.
Answer:
The O'Hara, Parness, and Lincoln Partnership
Journal Entry:
Date Description Debit Credit
O'Hara Capital A/c $50,000
Cash Account $50,000
To record the withdrawal of O'Hara and his capital interest.
Explanation:
The Partnership of O'Hara, Parness, and Lincoln can use the journal entry as above to record the withdrawal of a partner. The O'Hara's Capital account previously had a credit balance and cash will be involved in settling O'Hara, the journal entries to complete the withdrawal of O'Hara are a debit to the O'Hara's Capital account and a credit to the Cash account. This arrangement is in accordance with the partnership agreement. This is the most important governing law for the partnership and everything or transaction affecting the partnership must be done accordingly. It is only in the absence of an agreement that the laws or general practise concerning partnership can be applied.
Jamie has determined she is unable to pay the minimum payments on her student loan based on her current income. What is the next BEST step for Jamie in order to avoid late payments or defaulting on her student loan?
Answer: call the lender so as to discuss the additional repayment options
Explanation:
From the question, we are informed that Jamie has determined she is unable to pay the minimum payments on her student loan based on her current income.
The next best step for Jamie in order to avoid late payments or defaulting on her student loan is to call the lender so as to discuss the additional repayment options.
The Bradford Company issued 12% bonds, dated January 1, with a face amount of $81 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds at January 1, 2018. 2. to 4. Prepare the journal entry to record their issuance by The Bradford Company on January 1, 2018, interest on June 30, 2018 and interest on December 31, 2018 (at the effective rate).
Answer:
$81 million in bonds issued January 1, 2018
coupon rate 12%, semiannual 6% interest
maturity = 10 years x 2 = 20 periods
market interest rate = 14% / 2 = 7% semiannual
1) market price of the bonds:
PV of face value = $81,000,000 / (1 + 7%)²⁰ = $20,931,939.23
PV of coupon payments = $4,860,000 x 10.59401 (PV annuity factor, 7%, 20 periods) = $51,486,888.60
market price = $72,418,827.83 ≈ $72,418,828
2) January 1, 2018, bonds issued at a discount
Dr Cash 72,418,828
Dr Discount on bonds payable 8,581,172
Cr Bonds payable 81,000,000
3) June 30, 2018, first coupon payment
Dr Interest expense 4,999,318
Cr Cash 4,860,000
Cr Discount on bonds payable 139,318
amortization of bond discount = ($72,418,828 x 7%) - $4,860,000 = $4,999,318 - $4,860,000 = $139,318
4) December 31, 2018, second coupon payment
Dr Interest expense 5,079,070
Cr Cash 4,860,000
Cr Discount on bonds payable 219,070
amortization of bond discount = ($72,558,146 x 7%) - $4,860,000 = $5,079,070 - $4,860,000 = $219,070
A registered representative conducts a seminar about investing in the meeting room of a local apartment complex. At the end of the talk, he hands out his business card and tells the attendees that if they want additional information, please write their contact information on the reverse side of the business card and return it to him. When he gets back to the office and starts to re-contact some of the attendees who returned the business card, he finds that one of them is blocked because the client name is on the National Do Not Call Registry. Which statement is TRUE
Answer: A. This prospect can be called by the registered representative
Explanation:
The National Do Not Call Registry protects people from being called by telemarketers.
There are however some exceptions to this with one of them being the Prior Express Written Consent Exception.
The client by giving the registered representative their contact number to be able to talk to them, gave written consent and so the registered representative is allowed to call them.
When the Fed raises the required reserve ratio, the excess reserves available in the banking system: Group of answer choices
Answer:
are decreased
Explanation:
the reserve ratio is the reserve requirement on commercial banks to deposit a percentage of their deposit liabilities to the Central Bank so as not to lend or invest all of them. Therefore when reserve ratio is increased, excess reserves available to banks decrease as they are required to keep more funds with the Central Bank. In the US, the Federal Reserve is in charge of setting the reserve ratio which is specified in Regulation D
The decision of what entry mode to use for international expansion is primarily based on all of the following factors except
A. The industry’s competitive conditions
B. The country’s situation and government policies
C. The worldwide economic situation
D. The firm’s unique set of resources, capabilities and core competencies
E. The experiences and capabilities of the firm’s top management team.
Answer:
C. The worldwide economic situation
Explanation:
These are various advantages for a company that expands into the international market. Having a presence on multiple countries gives advantage of being able to leverage on cheaper labour in some locations, unique capabilities of certain countries, and more favourable political climate for doing business.
Modes of expansion into international market are exporting, liscensing, partnering, acquisitions, and greenfield venturing.
The decision on the entry mode for international expansion includes competitive conditions in the industry, government policies, experience of the companies team, and unique capabilities of the company.
Consideration is not given to worldwide economic situation, but focus is more on the country into which expansion is to occur.
Hybrid cars are touted as a "green" alternative; however,the financial aspects of hybrid ownership are not as clear. Consider the 2018 Edsel 550h, which had a list price of $5200 (including tax consequences) more than the comparable Edsel550. Additionally, the annual ownership costs ( other than fuel) for the hybrid were expected to be $330 more than the traditional sedan. The EPA mileage estimates was 27 mpg for the hybris and 19mpg for the hybrid and 19 mpg for the traditional sedan.
A. Assume that gasoline costs $3.60 per gallon and you plan to keep either car for six years. How many miles per year would you need to drive to make the decision to buy the hybrid worthwhile, ignoring the time value of money?
B. If you drive 15,500 miles per year and keep either car for six years, what price per gallon would make the decision to buy the hybrid worthwhile, ignoring the time value of money?
C. Gasoline costs $3.60 per gallon and you plan to keep either car for six years. How many miles per year would you need to drive to make the decision to buy the hybrid worthwhile? Assume the appropriate interest rate is 10 percent and all cash flows occur at the end of the year.
D. If you drive 15,500 miles per year and keep either car for six years, what price per gallon would make the decision to buy the hybrid worthwhile? Assume the appropriate interest rate is 10 percent and all cash flows occur at the end of the year.
Answer:
a)
the hybrid model initially costs $5,200 more than the regular model, plus you have another $330 in extra ownership costs per year. If you plan to own the hybrid car for 6 years, then you must recoup $5,200 / 6 = $866.67 + $330 = $1,196.67 per year.
the cost of driving 1 mile with the hybrid car = $3.60 / 27 = $0.1333
the cost of driving 1 mile with the regular model = $3.60 / 19 = $0.1895
you will save = $0.0562 per mile driven
you would need to drive $1,196.67 / $0.0562 = 21,293 miles per year to make the decision worth it
b)
if you only drive 15,500 miles per year, then you would need to save $0.0772 per mile
that would only result if gasoline's price was:
x/19 - x/27 = 0.0772
0.0526x - 0.037x = 0.0772
0.0156x = 0.0772
x = 0.0772 / 0.0156 = $4.95 per gallon
c)
you must first determine the present value of all additional expenses related to purchasing a hybrid:
year cash flow
0 -5,200
1 -330
2 -330
3 -330
4 -330
5 -330
6 -330
Using a financial calculator, the PV = -$6,637.24
now we must use an annuity formula to determine the annual savings required using a 10% discount rate and 6 periods:
annual savings = $6,637.24 / 4.3553 (PV annuity factor, 10%, 6 periods) = $1,523.95
so you must save $1,523.95 per year and that is equivalent to $1,523.95 / $0.0562 = 27,116.47 = 27,116 miles
d)
you also need to save $1,523.95, but you only drive 15,500 miles, so the savings per mile = $0.0983
x/19 - x/27 = 0.0983
0.0526x - 0.037x = 0.0983
0.0156x = 0.0983
x = 0.0983 / 0.0156 = $6.30 per gallon
Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 9 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, the current dividend is $_______ per share.
Answer:
$3.72
Explanation:
in order to determine the price of the stock we use the dividend discount model:
P₀ = Div₁ / (Re - g)
P₀ = $90Div₁ = ?Re = 9%g = 9% / 2 = 4.5%Div₁ = P₀ x (Re - g)
Div₁ = $90 x (9% - 4.5%) = $90 x 4.5% = $4.05
now the current dividend (Div₀) = Div₁ / (1 + Re) = $4.05 / (1 + 9%) = $4.05 / 1.09 = $3.7156 = $3.72
The managerial accountant at Aquatics Pools and Spas assess a fixed overhead budget variance of U in the month of April. The standard hours in April were hours and the standard rate was projected at per machinehour. There were unforeseen complications that involved raw materials and the standard rate projected per machinehour was inaccurate. What was the standard rate per machinehour if the standard fixed overhead cost of production is ? What is the budgeted fixed overhead amount if the actual fixed overhead is ?
Answer: a. $14.17 /machine hour; $39,700
Explanation:
a. What was the standard rate per-machine hour if the standard fixed overhead cost of production is $41,100?
Standard Fixed Overhead Cost of Production = Standard Hours * Standard Rate
41,100 = 2,900 hours in April * Standard Rate
Standard Rate = 41,100/2,900
Standard Rate = 14.17 per machine hour
b. What is the budgeted fixed overhead amount if the actual fixed overhead is $43,100?
Budgeted Fixed Overhead= Actual Fixed overhead - Fixed overhead unfavourable variance
= 43,100 - $3,400 U in the month of April
= $39,700
When aggregate demand is high enough to drive unemployment below the natural rate:_________
a. there is downward pressure on the price level, and the government may want to conduct contractionary fiscal policy.
b. the economy is slipping into a recession, and the government may want to conduct expansionary fiscal policy.
c. there is upward pressure on the price level, and the government may want to conduct contractionary fiscal policy.
d. there is upward pressure on the price level, and the government may want to conduct expansionary fiscal policy.
e. there is downward pressure on the price level, and the government may want to conduct expansionary fiscal policy.
Answer:
e. there is downward pressure on the price level, and the government may want to conduct expansionary fiscal policy.
Explanation:
At the time of boom in the economy, the unemployment rate is beneath than the rate i.e. natural also it gives rise to the growth of the economy, along with it the expenditures, consumer spending also increased that ultimately increased the disposable income.
This results in the upward movement in terms of pressure on the aggregate demand that leads to a rise in the level of price and the real GDP also rises which reduced the unemployment
But when the aggregate demand is less so there is a downward pressure on the price as the level of price declines so that the aggregate demand increased and it is requirement made by the government for an expansionary fiscal policy that give increased in government spending or taxes decreased in order to raise the aggregate demand
The "death benefit" associated with a variable annuity contract means that if the contract holder dies:__________.
A. prior to annuitization, the amount invested in the contract is returned to a beneficiary
B. after annuitization, the amount invested in the contract is returned to a beneficiary
C. prior to annuitization, the insurance company will make a lump sum payment to complete the terms of the contract
D. after annuitization, the insurance company will pay for the insured's burial expenses
Answer:
B. after annuitization, the amount invested in the contract is returned to a beneficiary
Explanation:
Annuitization: In business, the term "annuitization" is described as a phenomenon which is responsible for converting an "annuity investment" into a stream or flow of regular payments. However, with an "annuity" any financial product that is responsible for making out regular payouts after a given time of an individual, his or her investment can pay off quickly.
llowing is selected financial information from General Mills, Inc., for its fiscal year ended May 29, 2011 ($ millions):
Answer:
hello your question is incomplete below is the complete question
Formulating Financial Statements from Raw Data
Following is selected financial information from General Mills, Inc., for its fiscal year ended May 29, 2011 ($ millions):
Revenue $14,880.2
Cash from operating activities 1,526.8
Cash, beginning year 673.2
Stockholders' equity 6,612.2
Non-cash assets 18,054.9
Cash from financing activities* (865.3)
Cost of goods sold 8,926.7
Total expenses (other than cost of goods sold) 4,155.2
Cash, ending year 619.6
Total liabilities 12,062.3
Cash from investing activities (715.1)
*Cash from financing activities includes the effects of foreign exchange rate fluctuations.
(a) Prepare the income statement, the balance sheet, and the statement of cash flows for General Mills for the fiscal year ended May 2011.
Hint: Enter negative numbers only for answers in the statement of cash flows (if applicable).
Explanation:
Attached below are the tables prepared by me showing the income statement for the year ending may 29 2011, Balance sheet ending May 29 2011, statement of cash flows fo year ending May 29 2011
On November 1, Barnes Corporation has 9,200 units of Product A on hand. During the month, the company plans to sell 44,200 units of Product A, and plans to have 10,950 units on hand at end of the month. How many units of Product A must be produced during the month
Answer:
45,950 units
Explanation:
To get the number of units of product A to be produced during the month, we'll make use of the formula below
Units produced = Ending inventory + Units - Beginning inventory
= 10,950 + 44,200 - 9,200
= 45,950
Therefore, the units of product A that must be produced during the month is 45,950 units
Corn Doggy, Inc. produces and sells corn dogs. The corn dogs are dipped by hand. Austin Beagle, production manager, is considering purchasing a machine that will make the corn dogs. Austin has shopped for machines and found that the machine he wants will cost $215,000. In addition, Austin estimates that the new machine will increase the company's annual net cash inflows by $33,000. The machine will have a 12-year useful life and no salvage value.
A. Calculate the cash payback period.
B. Calculate the machine's internal rate of return.
C. Calculate the machine's net present value using a discount rate of 10%.
D. Assuming Corn Doggy, Inc.'s cost of capital is 10%, is the investment acceptable?
Answer:
1. 6.52 years
IRR = 10.93%
NPV = $9,851.30
4. yes
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
$215,000 / $33,000 = 6.52 years
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV and IRR can be calculated using a financial calculator
Cash flow in year 0 = $-215,000
Cash flow each year from year 1 to 12 = $33,000
I = 10%
NPV = $9,851.30
IRR = 10.93%
The project is acceptable because the IRR is greater than the cost of capital
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
To find the IRR 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 IRR button and then press the compute button.
and the NPV is positive
A coupon bond that pays semiannual interest is reported in the Wall Street Journal as having an ask price of 116% of its $1,000 par value. If the last interest payment was made 3 months ago and the coupon rate is 5.90%, the invoice price of the bond will be _________. Multiple Choice $1,160.00 $1,189.50 $1,174.75 $1,130.50\
Answer:
$1,174.75
Explanation:
The computation of the invoice price of the bond is shown below:
As we know that
Invoice Price of Bond = Ask Price of Bond + Accrued interest
where,
Ask Price is
= $1,000 × 116%
= $1,160
Interest accrued for 3 months is
= $1,000 × 5.90% × 3 months ÷ 12 months
= $14.75
So,
Invoice Price of Bond is
= $1,160.00 + $14.75
= $1,174.75