Answer:
$11.05
Explanation:
Calculation for how much are you willing to pay today to buy one share of this stock
First step is to find the value after year 4
Using this formula
Value after year 4=(D4*Growth rate)/(Required rate-Growth rate)
Let plug in the formula
Value after year 4=(0.83×1.026)/(0.09-0.026)
Value after year 4=0.85158/0.064
Value after year 4=13.3058375
Second step is to calculate for the current value
Using this formula
Current value=Future dividend and value×Present value of discounting factor(rate percentage ,time period)
Let plug in the formula
Current value=0.33/1.09+0.38/1.09^2+0.53/1.09^3+0.83/1.09^4+13.3058375/1.09^4
Current value=0.30275+0.31983+0.40925+0.58799+9.42619
Current value=$11.05
Therefore How much you are willing to pay today to buy one share of this stock if your desired rate of return is 9 percent will be $11.05
Salah’s net income for the year ended December 31, Year 2 was $191,000. Information from Salah’s comparative balance sheets is given below. Compute the cash paid for dividends during Year 2. At December 31 Year 2 Year 1 Common Stock, $5 par value $ 506,000 $ 455,400 Paid-in capital in excess of par 954,000 858,400 Retained earnings 694,000 587,400
Answer:
Salah
Cash Dividends during Year 2:
= $84,400
Explanation:
a) Data and Calculations:
Dividends Paid:
Year 1 Retained earnings = $587,400
Year 2 Net Income = 191,000
Year 2 Retained earnings = (694,000)
Dividends paid = $84,400
b) Salah paid dividends worth $84,400. These represent the difference between the beginning retained earnings with the year 2's net income and the year 2's retained earnings. It is a reduction of the retained earnings after adding the net income for the year.
Airlines have first-class or business-class seating, for which customers pay a higher price to receive more room, extra amenities, and more attentive service. Would this illustrate price discrimination
Answer:
YES
Explanation:
Price discrimination is when the same product is sold at different prices to customers in different markets
types of price discrimination
1. first degree price discrimination : here sellers charge each consumer at their willingness to pay in order to eliminate consumer surplus.
2. second degree price discrimination : here firms offer different prices depending on the quantity purchased. e.g. giving discounts for bulk purchases.
3, third degree price discrimination : firms charge different prices to different groups of customers. e.g. having a certain price for senior citizens, students
Airlines charging different prices based on seating arrangement is an example of first degree price discrimination. the airlines aim to eliminate consumer surplus by charging each consumer at their willingness to pay.
On December 1, 2019, Carrie's Day Care receives in advance for an agreement to care for Susan's children for the months of December, January, and February. Carrie's Day Care will make an adjusting entry on December 31, 2019 to:
Answer and Explanation:
Since in the question it is mentioned that the Carrie day care received an advance for an agreement made to care for Susan child for the three months i.e. December, January, and February.
So for this, the unearned revenue is debited for $500 and the same is to be considered
Working note:
Amount of Revenue earned = Advance amount × 1 ÷ (From December to February)
= $1,500 × 1 ÷ 3
= $500
What recommendations would you give to Sundar Pichai, CEO of Google, to compete more effectively against Microsoft? To continue to sustain its competitive advantage
Answer: Optimize more ways in how the search engine can reach people better and solve problems with little or no challenges
Explanation:
Google has to look for ways in how the search engines can reach a wider audience and how they can easily answer people's question without much referrals. Most people get tired when they come online to search for an answer to a question and they are being referred severally to other sites and they end up not getting the desired answer at the end f their search. Google should look for ways in designing their tool to provide answers immediately with little or no bulky referrals.
Communication is essential for success in today's world for young professional who wants to appear literate, skillful, and effective A. Spoken B. Expert-Driven C. Written D. Charismatic
Answer:
Communication is essential for success in today's world for young professional is discussed below in full details.
Explanation:
Communication is an indispensable element of every individual and organization. Powerful communication is an indispensable element of organizational and Individual progress whether it is at the personal, intra-group, organizational, or external levels.
Bonding between people and their consists of the exchange of information and understanding between portion and people in an organization.
Given an upward sloping aggregate supply curve, which of the following is most likely to occur if the fed pursues restrictive monetary policy?
a. The equilibrium price level and output will both increase.
b. The equilibrium price level and output will both decrease.
c. The equilibrium price level will decrease but output will stay the same.
d. The equilibrium output will decrease but the price level will stay the same.
Answer:
b. The equilibrium price level and output will both decrease.
Explanation:
If the Fed decides to use restrictive monetary policy money supply to the economy will be reduced. Instruments for reducing money supply is by using interest rate, open market operations, and reserve ratio.
When money supply is reduced, aggregate demand will reduce (shift to the left) because people will have less money to spend. The real output will also reduce because there is reduced demand for goods and services.
Attached is a diagram illustrating this. Equilibrium price moves from A to B, and output decreases from Y1 to Y2
The Canadian government decides to offer tax concessions to foreign companies that agree to build a manufacturing facility in Canada. This tax concession is a way to
a. encourage inward FDI.
b. discourage inward FDI.
c. encourage outward FDI.
d. discourage outward MNE.
e. discourage inward MNE.
Why do companies such as Gillette target emerging markets? Do you agree with this strategy?
Answer:
Due to more customers, high number of sales,
Explanation:
Most of the emerging markets are in developing nations and are becoming more engaged in the global market as they have the potential to grow. The emerging markets are transitional form low income less developed and often are pre-industrial towards a modern developed economy with a high standard of living. Thus I agree with this strategy as it helps the company to boost its sale and open its new markets all around the world, and increases its brand value.I agree with the strategy because new business will expands easily because of lesser competition which is a major advantage in a market.
An emerging market refers to a market in the developed nation which is becoming more engaged with global markets as it grows.
An emerging market is believed to be on a developing scales and serves a attraction to new investor because of benefit therein.
Hence, companies like Gillette target an emerging markets because new business will expands easily because of lesser competition which is a major advantage in a market.
Therefore, the answer is that i agree with the strategy.
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Which of the following is a true statement about an auditor’s responsibility regarding consideration of fraud in a financial statement audit?
A. The auditor should consider the client’s internal control and plan and perform the audit to provide absolute assurance of detecting all material mis-statements.
B.The auditor should assess the risk that errors may cause the financial statements to contain any mis-statements and determine whether the necessary controls are prescribed and are being followed satisfactorily.
C.The auditor should consider the types of mis-statements that could occur and perform tests on 100% of the information subject to misstatement.
D.The auditor should assess the risks of material mis-statement due to fraud.
Answer:
D. The auditor should assess the risks of material mis-statement due to fraud.
Explanation:
At the time of auditor visit in a company the financial statement represent that the company has done the fraud in this scenario, the auditor should analyze the material misstatement risk that is done for fraud
Therefore in the given case, the option D is correct as the auditor responsibility is that he or she should analyze the risk with respect to the false statements presented in the financial statement
We have said that strategic management is an evolution and a destination. What does this mean? Discuss in detail
Explanation:
Strategic management is an evolution and a destination due to the fact that the organizational strategy is developed in pursuit of objectives and goals. This means that action plans for achieving goals can be changed according to internal or external interference.
A company's strategy is not inert, so strategic management will be carried out according to the market situation, the internal environment and other variables, so that there is monitoring, organization and strategic coordination of the company according to its environment.
Suppose that papers for a newspaper stand cost $0.40 and sell for $0.80. They currently have no salvage value. If the stand owner is able to find an outlet that would provide a salvage value of $0.10, what would be the increase in service level
Answer:
.07
Explanation:
Calculation for the increase in service level
Based on the information given we were told that the newspaper stand cost the amount of $0.40 and sell for the amount of $0.80 which means that in a situation where the stand owner find an outlet that provide a salvage value amount of $0.10 the increase in service level will be .07 calculated as ($0.80-$0.10)
Therefore what would be the increase in service level will be .07
Lucky Lee, a video-game store in New York city, purchases a game machine directly from Taiwan for$30,000. In the U.S., the same machine will probably cost at least $36,000. Pick the most appropriateaccounting action for Lucky Lee:Record the machine at $36,000Record the machine at $30,000Record the machine for [($30,000+$36,000)/2] = $33,000Have the machine examined by an independent appraiser and record it at the appraised value
Answer:
Record the machine at $30,000
Explanation:
Since as we can see that the purchase value of the game machine is $30,000 and the other values are given
So based on the historical cost principle, the machine should be recorded at the purchased cost, acquired cost, original cost
here in the given situation, the machine is actually purchased at $30,000 so the same is to be recorded
you own $750000 worth of stock, and you are worried the price may fall by year-end in 6 months. you are considering
Answer: D. I, II, and III
Explanation:
If expecting a price deduction, you can buy Put options. These give you the right to sell an underlying stock at a certain price regardless of what the price in the market is. If you purchased this, you can sell your stock above market value if it does go down.
You can sell write call options for a fee where you give the buyer the right to buy your shares at a certain price in future. This is only valuable if prices rise so as you are expecting prices to fall, you could make a premium on the call option contract fees if prices fall without having to sell off your shares.
Hedging with puts is better than short calls if you are expecting a major stock price decline as the opportunity for profit is higher.
Complete the following data taken from the condensed income statements for merchandising Companies A, B, and C.
Company A Company B Company C
Net income $335 $175
Sales 895 530
Gross profit 400 325
Operating expenses 50
Cost of goods sold 570 350
Answer:
Condensed income statements
Company A B C
Sales $970 $895 $530
Cost of goods sold $570 $350 $205
Gross profit $400 $565 $325
Operating expenses $65 $50 $150
Net income $335 $515 $175
Explanation:
Company A B C
Net income $335 ? $175
Sales ? $895 $530
Gross profit $400 ? $325
Operating expenses ? $50 ?
Cost of goods sold $570 $350 ?
Condensed income statements
Company A B C
Sales $970 $895 $530
Less: Cost of goods sold $570 $350 $205
Gross profit $400 $565 $325
Less: Operating expenses $65 $50 $150
Net income $335 $515 $175
The next four questions refer to a fictional fast food company:
The following cost information pertains to the meals made by the company:
Food $2.50/meal
Franchisor Royalties $0.70/meal
Advertising & Promotion $300,000
Rent $100,000
Price of each meal $10.00
What is the gross marketing contribution per unit?
If the company sold 100,000 meals and decided that they wanted to increase the advertising expense by $25,000 to generate more sales, how many more meals would they have to sell to maintain their current contribution to the organization
Assume I want to become more competitive from a price perspective , and I consider lowering my prices by 15%, and I want to accompany this change with a major advertising campaign, which will cost $15,000. How must my sales change for me to preserve my contribution to the organization?
What percentage of current sales does this represent?
Answer:
A Fictional Fast Food Company
a. Gross marketing contribution per unit:
= $6.80
b. If the company sold 100,000 meals and decided that they wanted to increase the advertising expense by $25,000 to generate more sales, how many more meals would they have to sell to maintain their current contribution to the organization:
= 3,677 (103,677 - 100,000) meals
c. Assume I want to become more competitive from a price perspective , and I consider lowering my prices by 15%, and I want to accompany this change with a major advertising campaign, which will cost $15,000. How must my sales change for me to preserve my contribution to the organization?
My sales must increase by 2,206 meals.
d. This represents about 2.21% increase of the current sales.
Explanation:
1) Data and Calculations:
Cost information for meals:
Food $2.50/meal
Franchisor Royalties $0.70/meal
Variable cost $3.20/meal
Price of each meal $10.00
Contribution $6.80/meal
2) Fixed costs:
Advertising & Promotion $300,000
Rent $100,000
Total fixed costs $400,000
3) Income Statement
Sales Revenue $1,000,000
Variable cost 320,000
Contribution $ 680,000
Total fixed costs 400,000
Net Income $280,000
4) Scenario 1:
= (Fixed costs + $25,000 + $280,000)/Contribution per unit
= $705,000/$6.80
= 103,677 meals
5) Scenario 2:
Reduced selling price = $8.50 ($10 x 0.85)
($400,000 + $15,000 + $280,000)/$6.80
= $695,000/$6.80
= 102,206
6) Percentage change:
= 102,206 -100,000 = 2,206
= 2,206/100,000 * 100
= 2.21%
Three teams in the Agile Release Train are working on the same Feature. Team A is a component team, and Teams B and C are feature teams. During PI Planning, Teams B and C committed to delivering their part of the Feature by the end of Iteration five and plan to integrate with each other along with Team A’s piece in the first week of the IP Iteration. Why is this an anti-pattern?
Answer:
Correct Answer:
This is an anti-pattern because of the following:
1. The time it would take to plan work for the IP iteration during PI planning
2. The time it would take to wait for the IP iteration to fix defects
3. Too much time that is going to be spent analyzing each features
Explanation:
Fellingham Corporation purchased equipment on January 1, 2019, for $400,000. The company estimated the equipment would have a useful life of 10 years with a $40,000 residual value. Fellingham uses the straight-line depreciation method. Early in 2021, Fellingham reassessed the equipment's condition and determined that it has a remaining useful life of four years and that it would have no salvage value. Which of the following values is the closest to what Fellingham reports as depreciation on this equipment for 2021?
a. $50,240.
b. $36,960.
c. $52,440.
d. $55,440.
Answer:
Answer not in the given option, please recheck for error.
depreciation in 2021 would be= $82,000
Explanation:
Depreciation incurrred in 2019:
Using straight line depreciation = original cost - salvage value / useful life
=(400,000-40,000)/10
=$36,000
The depreciation from January 1, 2019 to December 31st 2020 = 2 years
therefore depreciation for the two years = $36,000 x 2 = $72,000
Book value recorded early 2021= Original cost - the A ccumulated Deprecaition
= 400,000- 72,000= $328,000
But Remaining useful life =4 years with no salvge value
Therefore depreciation in 2021 would be = Cost - salvage value / useful life
($328,000 - 0)/4
= $82,000
Each of the following situations contains an assumption about price elasticity of demand. What is the assumption? For each situation state whether the assumption is accurate and explain your reasoning.
a. Sky King, world traveler, says if the airlines want to increase total revenue, they should lower fares for business travelers as well as for vacationers.
b. Both groups should respond equally to a price decrease
c. Bill Smith, a candidate for the state legislature, is proposing a large increase in the tax on cigarettes and liquor. He says "I'm not proposing these taxes to raise revenue but to discourage reckless drinking and the filthy smoking habit. If the price of cigarettes and liquor go up, the majority of people will quit using them. After all no one needs to smoke or drink?"
Answer:
a. Sky King, world traveler, says if the airlines want to increase total revenue, they should lower fares for business travelers as well as for vacationers.
Sky King is assuming that the demand for airline tickets is price elastic, This means that a small decrease in the price of airline tickets will result in a proportionally larger increase of the quantity demanded. This will ultimately result in an increase of total revenue, e.g. price decreases by 5%, but quantity demanded in creases by 15%.
b. Both groups should respond equally to a price decrease
I guess that this question is related to the first question. If both groups of consumers respond equally to a price decrease, it means that both groups have exactly the same price elasticity of demand. This is usually not very common, theoretically it is possible, but generally business travelers have a more inelastic demand while vacationers tend to have a more elastic demand.
c. Bill Smith, a candidate for the state legislature, is proposing a large increase in the tax on cigarettes and liquor. He says "I'm not proposing these taxes to raise revenue but to discourage reckless drinking and the filthy smoking habit. If the price of cigarettes and liquor go up, the majority of people will quit using them. After all no one needs to smoke or drink?"
Bill believes that both cigarettes and liquor have an elastic demand since he believes that an increase in the price of cigarettes and liquor will result in consumers quitting. It applies the same logic as the first scenario, but on an inverse situation. You want to lower consumption, and increasing the price should do it. empirical evidence suggests that Bill is wrong, since people who like to drink or smoke will continue to do it regardless of the price. They might change for cheaper brands or ultimately, they will stop consuming other goods in order to be able to afford consuming cigarettes and liquor. Alcohol is by far the most dangerous and lethal drug in the world and the main problem with it is that people will do anything to get it. I'm not so sure about cigarettes, but since it also develops an addiction, the bad effects should be the same.
A _______ is a document with predefined settings that can be used as a pattern to create a new file.
Answer: a template
Explanation:
Romona Company expects its November sales to be % higher than its October sales of . All sales are on credit and are collected as follows: % in the month of the sale and % in the following month. Purchases were in October and are expected to be in November. Purchases are paid % in the month of purchase and % in the following month. The cash balance on November 1 is . The cash balance on November 30 will be
Answer:
$95,050
Explanation:
Calculation to determine the cash balance on November 30
First step is to find the November sale using this formula
November sale = October sale × (1 + rate of increase)
Let plug in the formula
November sale = 210,000 × (1 + 0.15)
November sale = 210,000 × 1.15 November sale = 241,500
Second is to calculate for the Collection for sale using this formula
Collection for sale = November sale × 30% + October sale × 65%
Let plug in the formula
Collection for sale = 241,500 × 30% + 210,000 × 65%
Collection for sale = 72,450 + 136,500
Collection for sale= 208,950
The third step is to calculate for Payment for purchases
Using this formula
Payment for purchases = November purchases × 30% + October purchases × 70%
Let plug in the formula
Payment for purchases= 190,000 × 30% + 100,000 × 70%
Payment for purchases = 57,000 + 70,000
Payment for purchases =127,000
The last step is to calculate for the cash balance on November 30
Cash balance on November 30 = November 1 Beginning Cash + Collection for sale -Payment for purchases
Let plug in the formula
Cash balance on November 30 = 13,100 + 208,950 - 127,000
Cash balance on November 30 =$95,050
Therefore the cash balance on November 30 will be $95,050
Blue Spruce Corp. issued 1,100 6%, 5-year, $1,000 bonds dated January 1, 2022, at face value. Interest is paid each January 1.
(a) Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(b) Prepare the adjusting journal entry on December 31, 2022, to record interest expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(c) Prepare the journal entry on January 1, 2023, to record interest paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
a.
January 1, 2022
Cash $1100000 Dr
Bonds Payable $1100000 Cr
b.
December 31, 2022
Interest expense $66000 Dr
Interest Payable $66000 Cr
c.
January 1, 2023
Interest Payable $66000 Dr
Cash $66000 Cr
Explanation:
a.
The bonds are issued at face value. The face value of each bond is $1000 and there are 1100 bonds issued in total. Thus, the cash received from issuance of bonds is,
Cash = 1100 * 1000 = $1100000
So, we debit the cash by this amount and credit the bonds payable account.
b.
The interest expense for the year on these bonds is,
1100000 * 0.06 = $66000
The adjusting entry made on December 31 2022 will include a debit to the interest expense and a credit to the interest payable. The interest expense will be debited because under the accrual principle, we match the expenses to the period to which they relate.
c.
The entry to record payment of interest will result in a debit to interest payable as liability is being closed through this payment and a credit to cash
Based on the information given the appropriate journal entries to record the transactions are:
Blue Spruce Corp. Journal entries
a. January 1, 2022
Debit Cash $1,100,000
(1,100 x $1000)
Credit Bonds payable $1,100,000
(To record sale of bonds)
b. December 31,2022
Debit Interest expense $66,000
Credit Interest payable $66,000
($1,100,000×6%)
(To record interest expense)
c. January 1, 2022
Debit Interest payable $66,000
Credit Cash $66,000
($1,100,000×6%)
(To record interest paid)
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Pittsboro Corporation produces and sells a single product. Data for that product are: Sales price per unit Variable cost per unit Fixed expenses for the month Currently selling units Management is discussing increasing the price to to cover an increase in fixed expenses of . Management believes they might lose 2% of sales per month. What should be the overall effect on the company's monthly operating income if this change is implemented?
Answer:
The remaining part of the question is:
Round up to the newest whole unit.
OA . 3,572 units
OB. 4,000 units
OC. 3,935 units
OD. 5.269 units
Correct Answer:
OC. 3,935 units
Explanation:
Current sales 2000000 = 4000*500
Less: Variable costs 880000 = 4000*220
Less: Fixed costs 1000000
Current operating income 120000
Fixed costs 1080000 =1000000+80000
Add: Operating income 120000
Required Contribution margin 1200000
Divide by Contribution margin per unit 305 =525-220
Units to be sold 3935
A registered investment company whose share price fluctuates independently of its net asset value is most likely
Answer:
Closed-End Fund
Explanation:
Close-End Funds raise money through an IPO and then its stocks are traded on secondary markets. There are no new issuance of stocks, nor there are repurchases of stocks, therefore, the price of their stocks is determined by the market. That is why their stock price will be based on its net asset value, but it fluctuates and is not dependent on it.
Twelve years after Starfire's appearance, a similar coffee-shop chain, Reindeer Brews, entered the marketplace. Reindeer charges $3 for a mug of hot cocoa and a similar community experience. How would you characterize this scenario
Answer:
Price competition in a monopolistically competitive market
Explanation:
The Monopolistic rivalry is an industry state with several firms that are closely linked to each other but offer distinct goods. Therefore, this sector has unlimited entry and exit
Here the company offers the same service but there are totally different in terms of design, service, quality, etc
Hence, the correct option is c
A(n) ________ has no impediments to the free flow of goods and services, such as trade barriers.
Answer:
efficient market
Explanation:
Oriole Company Purchased A Depreciable Asset For $837900 On January 1, 2018. The Estimated Salvage Value Is $81000, And The Estimated Total Useful Life is 9 years. The straight-line method is used for depreciation. In 2021, Oriole changed its estimates to a total useful life of 5 years with a salvage value of $143000. What is 2021 depreciation expense?
a. $252300
b. $584100
c. $139650
d. $221300
Answer:
D
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($837900 - $81000) / 9 = $84,100
Depreciation expense from 2018 to the end of 2020 would be $84,100
Accumulated depreciation as at 2020 = $252,300
Book value at the beginning of 2021 = $837, 900 - $252,300 = $585,600
remaining useful life as a result of the revision = 5 - 3 = 2
Depreciation expense under the new revisions =
($585,600 - $143000) / 2 = $221,300
Suppose a corporation issued a 20-year annual, 7 percent bond, 10 years ago. The bond is currently selling for 92 percent of its face value, or $920. What is the corporation’s cost of debt?
Answer:
Cost of debt = 8.13 %
Explanation:
The cost of the debt would be equal to the yield on the bond.
The Yield to maturity is the discount rate that equates then price of the bonds to the present of cash inflows expected from the bond
The yield on the bond can be determined as follows using the formula below:
YTM = C + F-P/n) ÷ 1/2 (F+P)
YTM-Yield to maturity-
C- annual coupon
F- Face Value
P- Current Price
n- years to maturity
YTM-?, C- 7%× 1000 =70, Face Value - 1,000, P-920, n- 10
YTM = (70 + (1000-920)/10) ÷ ( 1/2× (1000 + 920) )
YTM = 0.08125 × 100 = 8.13 %
Yield to Maturity =8.13 %
Cost of debt = 8.13 %
Tremonti, Inc., is obligated to pay its creditors $7,900 during the year. a. What is the value of the shareholders’ equity if assets equal $9,100? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the value of the shareholders’ equity if assets equal $6,900? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Answer:
A.$1,200
B. $0
Explanation:
A. Calculation for the value of the shareholders’ equity if assets equal $9,100
Using this formula
Shareholders’ equity=Maximum[(Assets - Liabilities),0]
Let plug in the formula
Shareholders’ equity=Maximum[($9,100-$7,900),0]
Shareholders’ equity=$1,200
B. Calculation for the value of the shareholders’ equity if assets equal $6,900
Using this formula
Shareholders’ equity=Maximum[(Assets - Liabilities),0]
Let plug in the formula
Shareholders’ equity=Maximum[($6,900 -$7,900),0]
Shareholders’ equity=$0
Therefore the value of the shareholders’ equity if assets equal $9,100 will be $1,200 because the assets is higher than the liabilities while the value of the shareholders’ equity if assets equal $6,900 will be $0 because the Liabilities is higher than the assets.
To complete the first setup on a new machine took an employee 280 minutes. Using an 75% cumulative average−time learning curve indicates that the second setup on the new machine is expected to take ________.
Answer: 140 minutes
Explanation:
From the question, we are informed that to complete the first setup on a new machine took an employee 280 minutes. Using an 75% cumulative average−time learning curve indicates that the second setup on the new machine is expected to take:
We first multiply the 75% cumulative average−time by the 280 minutes used. This will be:
= 280 × 75%
= 280 × 0.75
= 210
(280 + y)/2 = 210
280 + y = 210 × 2
280 + y = 420
y = 420 - 280
y = 140 minutes
A pattern in which the aggregate time per unit is lessened by a consistent rate each time the combined volume of parts produced is multiplied is called the cumulative average−time learning curve model.
The second setup on the new machine is expected to take 140 minutes.
This can be estimated by:
Time required by the employee for setting the first step = 280 minutesAccording to the 75% cumulative average−time learning curve:
[tex]=280 \times 75\%[/tex]
[tex]= 280 \times 0.75[/tex]
= 210
Let y = time required for the second setup then,
[tex]\dfrac{(280 + \text{y})}{2} = 210[/tex]
[tex]280 + \text{y} = 210 \times 2[/tex]
[tex]280 + \text{y} = 420[/tex]
[tex]\text{y} = 420 - 280[/tex]
[tex]\text{y} = 140\; \text{minutes}[/tex]
Therefore it will take 140 minutes for the second setup.
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Morgan Company issues 8%, 20-year bonds with a par value of $740,000 that pay interest semi-annually. The current market rate is 7%. The amount of interest owed to the bondholders for each semiannual interest payment is:_________.
Answer:
The interest amount is $29600.
Explanation:
Below are the following given values:
The par value of bonds that Morgan company issues = $740000
Interest paid = semi annually
Current interest rate = 7%
Now we have to find the total amount of interest at 8% that is compounded semiannually.
Below is the calculation of the interest amount.
Amount of interest for each semi-annual period: = face value × Coupon rate × 0.5
Here we multiply with 0.5 because interest is semi-annually.
Total interest = $740,000 × 8% × 0.5
Total interest = $29,600