Cash balance per books (before adjustments): $27,620 the answer is $27,620.
To determine the cash balance per books (before adjustments) for Oriole Company, we need to start with the cash balance per bank and adjust for items that are either added or subtracted to arrive at the cash balance per books.
Starting cash balance per bank, 9/30: $24,500
Add: Note receivable collected by bank: $13,000
Add: Deposits in transit: $6,600
Less: Outstanding checks: $13,400
Less: Bank service charge: $240
Less: NSF check: $2,440
A bank reconciliation is a process of matching and comparing the cash balance recorded in a company's accounting records to the cash balance shown on the bank statement. This process is necessary because there can be timing differences between when transactions are recorded in a company's books and when they are processed by the bank, which can lead to discrepancies between the two cash balances.
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A company recorded the $43,000 adjusting entry for depreciation expense by debiting revenues and crediting liabilities $43,000. Net income is
The net effect on net income is a decrease of $43,000.
The effect on net income when a company records a $43,000 adjusting entry for depreciation expense by debiting revenues and crediting liabilities $43,000 is as follows.
To correct the entry, we should first analyze the correct adjusting entry for depreciation expense. The correct entry should be:
1. Debit Depreciation Expense $43,000
2. Credit Accumulated Depreciation $43,000
Now let's correct the incorrect entry made by the company:
1. Reverse the incorrect entry: Debit Liabilities $43,000, Credit Revenues $43,000
2. Record the correct entry: Debit Depreciation Expense $43,000, Credit Accumulated Depreciation $43,000
As a result of these corrections, net income will be affected as follows:
1. Revenues will increase by $43,000 since we are reversing the initial incorrect debit.
2. Depreciation Expense will increase by $43,000 because of the correct entry being recorded.
So, the net effect on net income is a decrease of $43,000 because the increase in revenues is offset by the increase in depreciation expense.
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Participants in activities are considered passive unless their involvement in the activity is (Check all that apply.) Multiple select question. Managerial Continuous Substantial Regular
Participants in activities are considered passive unless their involvement in the activity is continuous, substantial, and regular. The content loaded into the activity can also affect their level of involvement.
It is important for managers to ensure that participants are actively engaged in the activity to maximize the benefits and outcomes.Participants in activities are considered passive unless their involvement in the activity is managerial, continuous, substantial, and regular. In this context, active involvement would require individuals to take part in management, engage continuously, contribute substantially, and maintain a regular presence in the activity.
The act of doing anything is called an activity. Being involved in a situation in life is being a participant. Activity restrictions are challenges someone could have when performing certain activities. Issues with participation might prevent someone from being fully involved in certain aspects of life.
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Consider a CD paying a ​% APR compounded monthly. ​(a) Find the periodic interest rate. ​(b) Find the future value of the CD if you invest ​$ for a term of years.
(a.)Periodic interest rate = 4%/12 = 0.3333...% (b)the future value of the CD would be $1,168.10 after 5 years.
(a) To find the periodic interest rate of a CD paying a % APR compounded monthly, we need to divide the annual percentage rate by the number of compounding periods in a year. Since there are 12 months in a year, we have:
Periodic interest rate = APR/12
For example, if the APR is 4%, then the periodic interest rate would be:
Periodic interest rate = 4%/12 = 0.3333...%
(b) To find the future value of the CD if you invest $P for a term of years, we can use the formula:
[tex]FV = P(1 + r/n) ^(nt)[/tex]
where FV is the future value, P is the initial investment, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
Using the periodic interest rate found in part (a), we can substitute the values into the formula:
FV =[tex]P(1 + r/n)^(nt)[/tex]
= [tex]P(1 + 0.003333...)^(12)(years)[/tex]
= [tex]P(1.003333...)^(12)(years)[/tex]
For example, if we invest $1,000 for 5 years with a periodic interest rate of 0.3333...%, then the future value would be:
FV = [tex]$1,000(1.003333...)^(12)(5)[/tex]
= $1,168.10
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You do not need to compare the interest rates and fees charged by credit card issuers since the issuers are heavily regulated by government agencies. Group of answer choices True False
The answer is False. While it is true that credit card issuers are regulated by government agencies, it is still important to compare the interest rates and fees charged by different issuers.
This is because there can still be variations in the rates and fees among different issuers, even if they are all regulated by the same agency. Additionally, some issuers may offer promotional rates or waive certain fees, which can make them a more attractive option for consumers.
By comparing the rates and fees of different issuers, consumers can make informed decisions about which card best fits their financial needs and goals. In summary, it is important to conduct a long detailed answer and full answer comparison of credit card issuers to ensure that you are getting the best deal possible. This can help you save money and avoid unnecessary fees and charges in the long run.
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Calculate the present value P of $10,000 paid out for a period of 20 years, at an interest rate of 5%. Round your answer to the nearest whole dollar. Do not include the dollar sign in your answer.
The present value of $10,000 paid out for 20 years at an interest rate of 5% is $3,773. This means that if we were to invest $3,773 today at a 5% interest rate for 20 years, it would be worth $10,000 in the future.
To calculate the present value P of $10,000 paid out for 20 years at an interest rate of 5%, we need to use the present value formula, which is:
P = FV / (1 + r)^n
Where P is the present value, FV is the future value, r is the interest rate, and n is the number of periods.
In this case, FV is $10,000, r is 5%, and n is 20. Plugging in these values, we get:
P = $10,000 / (1 + 0.05)^20
Simplifying this equation, we get:
P = $10,000 / 2.653
P = $3,773 (rounded to the nearest whole dollar)
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Tsunamet Cosmetics is highly responsive to its customers. This is one of the advantages of _________ organizations.
Tsunamet Cosmetics' high responsiveness to its customers is one of the advantages of agile organizations.
Agile organizations are characterized by their ability to respond quickly and effectively to changing circumstances, such as shifting customer preferences or market conditions. They are often characterized by a flat organizational structure, decentralized decision-making, and a focus on continuous learning and improvement. By being highly responsive to their customers, agile organizations are able to provide better customer service, build stronger customer relationships, and adapt more quickly to changing market conditions. This can give them a competitive advantage over more rigid and hierarchical organizations that may be slower to respond to customer needs or changing market conditions.
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Suppose a firm lowers its price to $10, raising the quantity sold from 4 to 5 units. If the marginal revenue of the fifth unit is $2, the firm must have lowered its price by:
The firm must have lowered its price by $0.50 to increase the quantity sold from 4 to 5 units and generate a marginal revenue of $2 on the fifth unit.
To calculate the change in price that the firm must have made, we need to use the formula for marginal revenue (MR). MR is the change in revenue resulting from a one-unit change in quantity sold. We know that the MR of the fifth unit is $2, which means that the firm earned an additional $2 in revenue by selling the fifth unit.
Now, to calculate the change in price, we can use the formula:
MR = ΔTR/ΔQ
Where MR is the marginal revenue, ΔTR is the change in total revenue, and ΔQ is the change in quantity sold.
We know that the change in quantity sold is 1 unit (from 4 to 5), and the marginal revenue is $2. So we can plug these values into the formula:
$2 = ΔTR/1 ΔTR = $2
This means that the firm earned an additional $2 in revenue by selling the fifth unit. To calculate the change in price, we need to divide this increase in revenue by the original quantity sold: $2 = ΔP x 4
ΔP = $0.50
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Upon graduating from Penn State, Gloria has $120,000 worth of student loans with an interest rate of 3.75%. How many years must the loan be if her annual payment budget is $7,480
To calculate the overhead cost applied to work-in-process for the month, we need to determine the predetermined overhead rate and multiply it by the actual direct labor hours worked in February.
Predetermined overhead rate = Estimated overhead costs / Estimated direct labor hours
Using the given information:
Estimated overhead costs = $191,079
Estimated direct labor hours = 73,492
Predetermined overhead rate = $191,079 / 73,492 ≈ $2.60 per direct labor hour
Now, we can calculate the overhead cost applied to work-in-process:
Overhead cost applied = Predetermined overhead rate * Actual direct labor hours
Overhead cost applied = $2.60 * 5,577
Overhead cost applied = $14,492.20
Therefore, the overhead cost applied to work-in-process for the month would be approximately $14,492.20.
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Red Bull runs a low level of ads throughout the year, but ups their advertising periodically during alternative and extreme sporting events. Red Bull likely uses a _____ strategy to schedule its ads.
Red Bull runs a low level of ads throughout the year but ups their advertising periodically during alternative and extreme sporting events. Red Bull likely uses a pulsing strategy to schedule its ads.
Pulsing is a type of advertising schedule where a company alternates periods of high advertising intensity with periods of low advertising intensity.
During the high-intensity periods, the company spends more on advertising to build brand awareness and increase sales, while during the low-intensity periods, the company reduces its advertising spending to maintain brand presence without overspending on advertising.
In the case of Red Bull, the company is known for sponsoring and promoting alternative and extreme sporting events. By increasing its advertising during these events, Red Bull can reach a targeted audience that is likely to be interested in its product.
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The largest category of employment for both county and municipal (city/town) governments in Texas is __________
The largest category of employment for both county and municipal governments in Texas is education.
The largest category of employment for both county and municipal governments in Texas is education. . Other major categories of employment for local governments in Texas include law enforcement, healthcare, and public administration. This includes public school teachers and staff, as well as employees of community colleges and universities that are owned and operated by local governments. Other major categories of employment for local governments in Texas include law enforcement, healthcare, and public administration.
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The largest category of employment for both county and municipal governments in Texas is education.
This includes public school teachers, administrators, and support staff, as well as employees of community colleges and universities that are supported by local governments.
Education is a significant part of local government expenditures in Texas and is a major priority for state and local policymakers.
Other important categories of employment for local governments in Texas include public safety (such as police and fire services), public works (including transportation and infrastructure), and healthcare. However, education remains the largest employer for both county and municipal governments in the state.
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What is the name of the three-phase model that Daniel Feldman proposed in order to counter the rather haphazard way some firms deal with new employees
The three-phase model proposed by Daniel Feldman is called the "Organizational Socialization" model. This model aims to provide a structured approach for integrating new employees into a company, addressing the issues that may arise from a haphazard onboarding process.
Anticipatory Socialization refers to the period before an individual joins an organization, when they gather information and form expectations about the company's culture, work environment, and job requirements.
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Assume a family that earns $20,000 pays $1,500 in income taxes, while a family that earns $40,000 pays $3,500 in income taxes. In this situation, the income tax system is Group of answer choices one of these but we cannot tell which one without more information. regressive. proportional. progressive.
The income tax system in the given situation is progressive tax.
This is because the amount of income tax paid by the family earning $40,000 is more than double the amount paid by the family earning $20,000, despite the fact that the latter family's income is only half of the former. This means that the tax rate increases as income increases, making it a progressive tax system. If it were a regressive tax system, the tax rate would decrease as income increases, which is not the case here.
If it were a proportional tax system, both families would pay the same percentage of their income in taxes, regardless of their income level. In summary, the income tax system is progressive because it imposes a higher tax burden on those with higher incomes, and we can come to this conclusion by looking at the specific amounts of income tax paid by the two families. This is an important concept to understand in order to analyze and evaluate tax policies and their impacts on different income groups.
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Mostly found in New England, ______ were originally established to provide a safe place for savings of particular groups of people, like fishermen. Multiple choice question. commercial banks savings and loan associations mutual savings banks credit unions
Mostly found in New England,mutual savings banks were originally established to provide a safe place for savings of particular groups of people, like fishermen. Option C
Mutual savings banks are financial institutions that are primarily found in the New England region of the United States. They were originally established to provide a safe place for savings of particular groups of people, such as fishermen, and were often set up as non-profit organizations.
Mutual savings banks are owned by their depositors, who are also members, and operate for their benefit. They differ from commercial banks in that they are not owned by shareholders, and therefore do not have a profit motive. Instead, they are focused on providing financial services to their members and the community.
Savings and loan associations (S&Ls) and credit unions are also types of financial institutions that offer savings accounts, loans, and other financial services. However, S&Ls are more commonly found in the western and southern regions of the United States and were historically focused on providing mortgage loans.
Credit unions, on the other hand, are owned by their members and are typically established to serve a specific group, such as employees of a company or members of a particular community. Option C
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You read in a business magazine that computer firms are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time
The theory of perfect competition suggests that the high profits being earned by computer firms are unlikely to persist in the long run, as new entrants will compete away these profits.
According to the theory of perfect competition, if computer firms are reaping high profits, we can expect new firms to enter the market in search of these profits. This increased competition will lead to lower prices and reduced profit margins for each firm.
In the long run, the market will reach a state of equilibrium where the profits of all firms are normal, i.e., just enough to cover their costs of production. This is because, in a perfectly competitive market, there are no barriers to entry, and firms can easily enter and exit the market.
Therefore, we can expect that the high profits being earned by computer firms will attract new entrants, leading to an increase in the supply of computers and a decrease in their price. As the market reaches equilibrium, the profits of all firms will become normal, and the industry will become less profitable than it is currently.
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A principal of is invested at interest, compounded annually. How many years will it take to accumulate or more in the account
It would take approximately 14.21 years for the investment to accumulate at least $2,000 when the interest is compounded annually.
We will use the formula for compound interest, which is:
A = P(1 + r/n)^(nt)
Here, A represents the final amount in the account, P is the principal investment, r is the annual interest rate (in decimal form), n is the number of times interest is compounded per year, and t is the number of years.
In your question, you want to find out how many years (t) it will take for the principal (P) to accumulate a certain amount (A) or more when the interest is compounded annually (n=1).
We can rearrange the formula to solve for t:
t = (log(A/P)) / (log(1 + r))
Now, you can plug in the values for P, A, and r to find the number of years required for the principal to accumulate the desired amount. Keep in mind that you need to convert the interest rate to decimal form by dividing it by 100.
For example, if you invest $1,000 (P) at a 5% annual interest rate (r = 0.05) and want to know how long it will take to have at least $2,000 (A) in the account:
t = (log(2000/1000)) / (log(1 + 0.05))
t ≈ 14.21 years
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The Agricultural Adjustment Act attempted to restore the purchasing power of farmers by encouraging them to
The Agricultural Adjustment Act, which was passed in 1933, attempted to restore the purchasing power of farmers by encouraging them to reduce their crop production.
The act offered financial incentives to farmers who agreed to reduce their acreage and limit production, with the goal of reducing surplus crops and increasing the price of agricultural goods. By doing so, the act aimed to stabilize agricultural prices and increase the income of farmers, ultimately restoring their purchasing power. However, the act was controversial, as some argued that it resulted in higher food prices and reduced access to food for low-income families.
The Agricultural Adjustment Act attempted to restore the purchasing power of farmers by encouraging them to reduce production and stabilize crop prices. This was achieved through a system of subsidies and production quotas, ultimately aiming to increase farmers' income and boost the agricultural sector.
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As price elasticity of supply increases, the supply curve Group of answer choices becomes flatter. becomes steeper. becomes downward sloping. shifts to the right.
As the price elasticity of supply increases, the supply curve becomes flatter.
This means that producers are more responsive to changes in price, and as a result, a small change in price leads to a relatively larger change in quantity supplied.
A flatter supply curve also indicates that the market can absorb more quantity supplied without a significant increase in price. In contrast, a steeper supply curve implies that producers are less responsive to price changes, and a larger change in price is required to induce a change in quantity supplied.
A downward-sloping supply curve is a fundamental characteristic of supply and does not vary with changes in elasticity. Finally, a shift to the right of the supply curve implies an increase in the quantity supplied at any given price.
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Proponents of the top-down approach contend that _______ are the only persons in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions.
Proponents of the top-down approach contend that top-level executives are the only persons in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions.
The top-down approach to decision-making is a management style where decisions are made by the top-level executives and then implemented downwards through the organization.
Proponents of this approach argue that top-level executives have the necessary knowledge and experience to make key strategy decisions, as well as the fiduciary responsibility to act in the best interests of the organization.
Summary: In summary, proponents of the top-down approach believe that top-level executives are the only ones in the firm with the collective experience, acumen, and fiduciary responsibility to make key strategy decisions.
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________ refers to customers becoming segmented into smaller and more specialized groups responding to more narrowly targeted commercial messages.
The term that refers to customers becoming segmented into smaller and more specialized groups responding to more narrowly targeted commercial messages is known as "micro-segmentation."
In the past, companies would target broad demographic groups with their advertising campaigns. However, with the rise of digital marketing, companies can now use data analytics to identify and target much smaller and more specific groups of customers. By doing so, they can deliver more personalized and relevant messages, which can improve their chances of success. Micro-segmentation enables companies to better understand their customers and tailor their marketing strategies accordingly, which can lead to higher engagement and conversions. Overall, micro-segmentation is a powerful tool for companies looking to optimize their marketing efforts and drive growth.
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The production possibilities frontier bows outward because opportunity costs are decreasing as the production of a good increases. opportunity costs are increasing as the production of a good increases. opportunity costs are fixed as the production of a good increases. resources are of uniform quality.
The production possibilities frontier bows outward from the origin because: of opportunity costs increase as the production of a good increases, option A.
The production possibility frontier (PPF) is a curve on a graph that depicts the potential output of two goods whose production is dependent on the same limited resource. Another name for the PPF is the production possibility curve.
A corporation can use variables depending on amounts of available resources to indicate the number of items produced using points on a graph when determining how much of each product to create. Given the restricted supply of resources, if one product is to be produced more, resources from the other must be depleted.
Another point can be drawn on the curve when resources are transferred from one product and put towards the other. A curve that represents the maximum quantity of each product that can be produced when resources are reallocated is created when the locations where more of X will be produced by taking resources from Y or vice versa are plotted.
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Complete question:
The production possibilities frontier bows outward from the origin because: of
a. opportunity costs increase as the production of a good increases.
b. opportunity costs decrease as the production of a good increases.
c. more production of one good results in more production of the other good.
d. resources are of uniform quality.
Facts about a target market such as customers age, gender, race, geographic location, or other personal characteristics are known as
Facts about a target market such as customers age, gender, race, geographic location, or other personal characteristics are known as demographic data. Demographic data is a collection of statistical information about a group of people that can be used to gain insights into their behaviors, preferences, and needs.
By understanding the demographic data of a target market, businesses can develop more effective marketing strategies and tailor their products and services to meet the specific needs of their customers.
One of the key benefits of using demographic data is that it provides a way for businesses to identify their ideal customer. By analyzing demographic data, businesses can gain insights into the characteristics of their target market, such as their age, gender, and geographic location. This information can be used to develop marketing campaigns that are tailored to the needs and preferences of this specific group.
Another benefit of using demographic data is that it can help businesses to identify trends and patterns in consumer behavior. For example, demographic data can be used to track changes in consumer preferences over time, such as changes in the popularity of certain products or services. This information can be used to develop more effective marketing strategies and stay ahead of the competition.
In conclusion, demographic data is a powerful tool for businesses that are looking to better understand their target market. By using demographic data to gain insights into customer behavior, businesses can develop more effective marketing strategies and tailor their products and services to meet the specific needs of their customers.
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Jonas made an investment of $1500 on 1/1/2014. From this investment, he is scheduled to receive the following payments for the next 5 years. If the discount rate is 10%, what will be the net present value as on 1/1/2014
To calculate the net present value of Jonas' investment, we need to discount each payment to its present value using the discount rate of 10%.
Here are the payments that Jonas is scheduled to receive:
Year 1: $300
Year 2: $400
Year 3: $500
Year 4: $600
Year 5: $700
To calculate the present value of each payment, we can use the formula:
PV = Payment / (1 + r)^n
where PV is the present value, Payment is the payment amount, r is the discount rate, and n is the number of years from the present.
Using this formula, we get the following present values for each payment:
Year 1: $272.73
Year 2: $330.58
Year 3: $371.90
Year 4: $413.22
Year 5: $454.54
To calculate the net present value, we simply add up the present values of all the payments:
Net Present Value = $272.73 + $330.58 + $371.90 + $413.22 + $454.54 = $1843.97
Therefore, as of 1/1/2014, the net present value of Jonas' investment is $1843.97.
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A true MNC, with operations in dozens of different countries Group of answer choices can ignore foreign exchange risk since it is diversified. none of the above will pay taxes in only its home county. must effectively manage foreign exchange risk.
The answer to the question is that a true MNC with operations in dozens of different countries must effectively manage foreign exchange risk. This is because they are exposed to fluctuations in exchange rates between the various currencies they deal with, which can affect their profitability and financial performance.
While it may be true that a diversified MNC is less susceptible to foreign exchange risk than a company with limited international exposure, it is still important for them to actively manage this risk in order to minimize its impact.
It is also not true that an MNC with operations in multiple countries will not pay taxes in only its home country. In fact, MNCs are often subject to tax obligations in the countries where they do business, and must comply with various tax laws and regulations in each jurisdiction.
In summary, while an MNC with diversified operations may be better positioned to handle foreign exchange risk, it is still important for them to effectively manage this risk in order to ensure their financial stability and success in the global marketplace.
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An automated assembly robot that cost $370,000 has a depreciable life of 5 years with a $120,000 salvage value. The MACRS (Modified Accelerated Cost Recovery System) depreciation rates for years 1, 2, 3, and 6 are 20.00%, 32.00%, 19.20%, and 5.76%, respectively. What is the book value at the end of year 3
The book value of the automated assembly robot at the end of year 3 is $192,000, calculated using the MACRS depreciation method based on the robot's depreciable life, salvage value, and depreciation rates for each year.
To calculate the book value of an automated assembly robot at the end of year 3, we need to follow the MACRS depreciation method. This method takes into account the depreciable life of an asset, its salvage value, and depreciation rates for each year.
In this case, the cost of the robot is $370,000, and it has a salvage value of $120,000. Therefore, the depreciable value of the robot is $250,000 ($370,000 - $120,000). The MACRS depreciation rates for years 1, 2, 3, and 6 are 20.00%, 32.00%, 19.20%, and 5.76%, respectively.
Using these rates, we can calculate the depreciation expense for each year. In year 1, the depreciation expense is $50,000 ($250,000 x 20.00%), in year 2 it is $80,000 ($250,000 x 32.00%), and in year 3 it is $48,000 ($250,000 x 19.20%).
To find the book value at the end of year 3, we need to subtract the total depreciation expense for years 1-3 ($178,000) from the original cost of the robot ($370,000). The book value at the end of year 3 is therefore $192,000 ($370,000 - $178,000).
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If an employment test has a disparate impact on a minority group the employer must show that the test is ________ to the job for which the test is required.
The answer to the question is that the employer must show that the employment test is job-related and consistent with business necessity if it has a disparate impact on a minority group.
However,ana answer would explain that this requirement is a legal standard set forth by the Equal Employment Opportunity Commission (EEOC) and enforced under Title VII of the Civil Rights Act of 1964. This means that employers cannot use hiring practices that discriminate against protected groups, such as minorities, based on race, color, religion, se-x, or national origin. If an employment test has an adverse impact on a protected group, the employer must demonstrate that the test is necessary for the job and that there are no alternative selection methods that would be equally effective and have less of a disparate impact. This involves a careful analysis of the job requirements and the specific qualities that the test measures.
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The ending Retained Earnings balance of Lambert Inc. increased by $2.0 million from the beginning of the year. The company's net income earned during the year is $6.0 million. What is the amount of dividends Lambert Inc. declared and paid
Lambert Inc. declared and paid $4.0 million in dividends during the year.
Based on the given information, we can use the formula for retained earnings: Beginning retained earnings + net income - dividends = ending retained earnings. We know that the ending retained earnings balance increased by $2.0 million, and the net income earned during the year is $6.0 million. Thus, we can plug these numbers into the formula and solve for dividends:
Beginning retained earnings + net income - dividends = ending retained earnings
Beginning retained earnings + $6.0 million - dividends = Beginning retained earnings + $2.0 million
$6.0 million - dividends = $2.0 million
Dividends = $4.0 million
Therefore, Lambert Inc. declared and paid $4.0 million in dividends during the year.
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Describe the advantages and disadvantages of the graphic rating scale performance appraisal method currently used. Could this method be adjusted to better reflect team performance, and if so, how
Advantages of graphic rating scale method include ease of use and simplicity, but disadvantages include potential subjectivity and lack of detailed feedback.
To adjust for team performance, the graphic rating scale could incorporate metrics that are specific to team goals and objectives, and could be evaluated based on team achievements rather than individual performance.
Additionally, incorporating peer evaluations and input from team leaders could provide a more comprehensive assessment of team performance.
This adjustment could provide a more accurate and fair evaluation of team performance, while still maintaining the ease of use and simplicity of the graphic rating scale method.
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As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, and you need to determine an appropriate hurdle rate. The risk-free rate is 4%, and the expected market rate of return is 11%. Your company has a beta of 1.0, and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM, the appropriate hurdle rate would be Group of answer choices 7%. 1%. 4%. 11%. 15%.
As a financial analyst tasked with evaluating a capital-budgeting project, you are required to use the Internal Rate of Return (IRR) method to determine the appropriate hurdle rate. In order to do this, you will need to consider a number of factors that are relevant to the project and to your company as a whole.
Firstly, you will need to look at the risk-free rate, which is currently set at 4%. This is the rate at which your company can borrow money without taking on any additional risk. You will also need to consider the expected market rate of return, which is currently set at 11%. This is the rate at which investors expect to earn on their investments in the stock market.
Your company has a beta of 1.0, which means that it is considered to have average risk. This means that the project you are evaluating should have risk equal to the average project that your company has accepted in the past. According to the Capital Asset Pricing Model (CAPM), the appropriate hurdle rate for your project would be 7%.
The CAPM is a widely-used financial model that is used to calculate the expected return on an investment. It takes into account a number of factors, including the risk-free rate, the expected market rate of return, and the beta of the company in question. By using this model, you can determine the appropriate hurdle rate for your project, which will help you to evaluate its potential profitability and risk.
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for caterpillar, a tractor and farm equipment manufacturer, spark plugs to be installed in the tractors it builds would be classified on the balance sheet as
Spark plugs to be installed in the tractors built by Caterpillar would be classified as inventory on the balance sheet.
Spark plugs to be installed in the tractors built by Caterpillar would be classified on the balance sheet as inventory. Inventory is an asset that a company holds in order to sell or use in the production process. Caterpillar, being a manufacturer of tractors and farm equipment, would need to hold inventory of various components and parts required in the production process. Spark plugs, being a component required in the production of tractors, would be classified as inventory.
On the balance sheet, inventory is typically reported as a current asset, which means that it is expected to be sold or used within the next 12 months. The value of inventory on the balance sheet is calculated by taking the cost of the items and subtracting any write-downs or obsolescence. The value of inventory can have an impact on a company's financial performance, as a large amount of inventory can tie up cash and increase storage costs, while too little inventory can lead to lost sales and missed opportunities.
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Decreases in government spending result in an increase in investment in the long run. Suppose the capital stock is $1 trillion and a decrease in government spending causes a $50 billion rise in investment. Determine the effect of the change in government purchases on long-run per capita output growth, using the growth accounting formula. (Assume that the coefficient on capital in the growth accounting formula is one-third.)
According to the growth accounting formula, long-run per capita output growth can be represented as the sum of the growth rate of labor, the growth rate of technology, and the contribution of capital to growth, which is equal to one-third of the growth rate of capital.
Therefore, we can calculate the effect of the $50 billion rise in investment as follows:
The initial capital stock is $1 trillion, and the rise in investment is $50 billion, so the new capital stock is $1.05 trillion.
The increase in capital is $50 billion / $1 trillion = 5%.
So the contribution of capital to growth is one-third of the increase in capital, which is 5% / 3 = 1.67%.
If we assume that the growth rate of labor is constant and the growth rate of technology is zero, then the total long-run per capita output growth is the sum of the growth rate of labor and the contribution of capital to growth, which is 1.67%.
Therefore, the decrease in government spending that resulted in a $50 billion rise in investment would increase long-run per capita output growth by 1.67%.
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