The statement ''the most ethical decision is that which best upholds impartial standards of fairness and equity'' is true.
Ethical decisions are based on moral principles and values and aim to do what is right, just, and fair. The goal of ethical decision-making is to ensure that all parties involved receive equitable treatment and outcomes.
This means that decisions should be made in a manner that is consistent with accepted standards of fairness and justice. Ethical decisions should also be based on the facts of the situation, without bias or prejudice.
Additionally, ethical decisions should take into consideration the potential impact of the decision on all those involved. By taking a principled approach to decision-making, individuals and organizations can ensure that their decisions are ethical and follow the highest standards of fairness and equity.
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Which financial statements reports a company's assets and liabilities?
a. Income Statement
b. Statement of stockholders' equity
c. Balance Sheet
d. Statement of cash flows
The correct answer to this question is option a. Balance Sheet are the financial statements that report a company's assets and liabilities.
An organization's assets, liabilities, and shareholder equity are listed on a balance sheet, which is a financial statement. One of the three primary financial statements used to assess a company is the balance sheet. It offers a snapshot of the assets and liabilities of a corporation as of the publication date.
The balance sheet gives a quick overview of a company's assets, liabilities, and equity and is based on the fundamental accounting equation, or balance sheet equation: Assets = Liabilities + Equity.
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1. define agency , principal , agent , employment , employer , employee , and independent contractor . 2. what is the difference between noncompete and nondisclosure agreements? give an example
Agency is a legal relationship in which one person (the agent) acts on behalf of another person (the principal) and has the authority to bind the principal to obligations with third parties.
Principal is the person who hires an agent to act on their behalf and is responsible for the actions taken by the agent.
Agent is the person who is hired by the principal to act on their behalf and has the authority to bind the principal to obligations with third parties.
Employment is a relationship between an employer and an employee in which the employee performs work for the employer in exchange for compensation.
Employer is the person or company that hires an employee and pays their salary or wages.
Employee is a person who is hired by an employer to perform work in exchange for compensation.
Independent contractor is a self-employed individual who provides services to clients and is responsible for paying their own taxes and benefits.
Non-compete agreements are contracts between an employer and an employee in which the employee agrees not to compete with the employer for a specified period of time after the termination of their employment. For example, a software engineer who signs a non-compete agreement might agree not to work for a competitor of their employer for two years after leaving the company.
Non-disclosure agreements are contracts between two parties in which one party agrees to keep confidential information shared by the other party. For example, a startup might have a non-disclosure agreement with a software consultant to ensure that the details of their confidential business plan are not shared with others.
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which of the following is not true regarding ""accounting income""? (1) the term is one used on Form 1041 to refer to income as computed under the applicable principal and income act as modified by the trust document (2) This represents the amount that must bee mandatorily distributed by terms of any trust that qualifies as a simple trust (3) The standards for computing accounting income are issued by the Financial Accounting Standards Bpard (4) The number must often differs significiantly from taxab;e income of the trust or estate
The phrase is one that is used on Form 1041 to describe income that has been adjusted by the trust agreement and estimated in accordance with the applicable principle and revenue laws. (Choice A)
What is income in accounting?Profitability that was calculated on the accrual method of accounting is referred to as accounting income. Accounting income is typically defined as the variation in net assets over a reporting period, less any payments made to or receives from owners. Additionally, it can be calculated as revenues less all costs. The gain or loss statement's reported net profit before taxes for a given period is referred to as accounting income. Accounting earnings, also known as net profit (NI), are determined by deducting corporate costs from revenue.
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why is evaluating training an important part of strategic training? shrm
Evaluating training an important part of strategic training for many reasons like Measuring effectiveness,Improving future training,Justifying investment,Ensuring compliance,Continuous improvement .
Training evaluation is the methodical process of gathering data and utilising it to enhance your training. In strategic training, it is crucial for a number of reasons:
Determine whether the training was effective in accomplishing its aims and objectives by measuring effectiveness.
Enhance future training: Evaluation feedback can be used to enhance and make required modifications to future training programmes.
Justify the investment: Data from the evaluation of the training can be used to show stakeholders the training's return on investment (ROI).
Verify compliance: In some businesses, reviewing training is necessary to verify that employees are following rules.
Regular review helps firms continuously improve their processes and training programmes.Overall, a critical element in the strategic training process to ensure the effectiveness is evaluating the training.
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On January 1, 2016 Sandy Corporation, which reports financial statements on a monthly basis, took out a 3-month insurance policy and paid a $216,000 premium for coverage beginning that day. What would be reported for the following:
Prepaid Expenses on the Balance Sheet January 31 $ February 28 $ March 31 $
Insurance Expense on Income statement
On the balance sheet, the amount of prepaid expenses for January 31 will be $216,000. For February 28, it will be $144,000 and for March 31, it will be $72,000. The insurance expense for the income statement for each month will be $72,000.
Prepaid expenses on the balance sheet are expenses that have been paid in advance but have not yet been incurred. In this case, the company paid $216,000 for a 3-month insurance policy starting on January 1, 2016.
So, on January 31, the full $216,000 will be reported as prepaid expenses on the balance sheet since the coverage period has not started yet.
On February 28, the company has used 1 month of the insurance coverage, so only 2 months are left. Hence, the amount of prepaid expenses will decrease to $144,000 ($216,000 / 3 months * 2 months).
Similarly, on March 31, the company has used 2 months of the insurance coverage, so only 1 month is left. Hence, the amount of prepaid expenses will decrease further to $72,000 ($216,000 / 3 months * 1 month).
As for the insurance expense on the income statement, the company will recognize an expense of $72,000 each month for the 3 months of insurance coverage. This is because the company is recognizing the cost of the insurance coverage as it is being used.
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Skylar is viewing her personal and business calendar in a side-by-side fashion, but she would like to view a single calendar that has appointments and meetings from both personal and business. What should she do?.
Skylar can use a feature called "Calendar merging" or "Calendar overlay" to view appointments and meetings from her personal and business calendar in a single view.
Here's how she can do this in a few common calendar platforms: Gg Calendar: Skylar can create separate calendars for her personal and business events, then use the "Add a friend's calendar" feature to add her business calendar to her personal calendar view.
Ms Outlook: Skylar can create separate calendars for her personal and business events, then use the "Overlay" feature to view both calendars side-by-side.
Apple Calendar (iCal): Skylar can create separate calendars for her personal and business events, then use the "Calendar" view to display both calendars at once.
In each of these platforms, Skylar can adjust the color and display options for each calendar to differentiate between her personal and business events. This feature allows her to view all of her appointments and meetings in a single view, making it easier to manage her schedule and avoid conflicts.
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influencer marketing is one of the fastest-growing methods to attract new customers.
Another of the strategies for gaining new clients that is expanding most quickly is social media . social media. This assertion is accurate.
Teenage users generally prefer the viewpoints of innovators to those offered by more well-known figures.
How does share of voice work on social media?
a company ’s e - commerce brand recommendations or how frequently customers discuss it in comparison to rivals.
What does Net Promoter Score (NPS) in social media mean?
a measure used by businesses to gauge how likely consumers are to suggest their merchandise or services to everyone else.
That whenever a business, brand, or commodity is remembered first for consumers whenever there consider a certain sector or classification, this is known as top of mind awareness (ToMA).
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7. when making a dilution you need to put different volumes of the stock solution and the buffer. suppose you are doing a 2-fold dilution, where both volumes are the same. will you use the same pipette tip to extract the stock and the buffer solution? explain your reasoning
A two-fold dilution reduces the concentration of a solution by a factor of two, or by one-half of the original concentration.
How do you create various dilutions from stock solutions?
Assume you need to make 50 milliliters of 1.0 M solution from a 2.0 M stock solution. The first step is to figure out how much stock solution you'll need. Pour 25 mL of the stock solution into a 50 mL volumetric flask to make your solution. Dilute it to the 50 ml line with solvent.
You can use the following formula to create a fixed amount of a dilute solution from a stock solution: C1V1 = C2V2, where V1 denotes the volume of stock solution required to create the new solution. C1 = Stock solution concentration. V2 denotes the final volume of the new solution.
Therefore, Two-fold serial dilutions are a series of two-fold dilutions.
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match each work outcome with the corresponding organizational behavior concept. what is each behavior an example of? work outcome organizational behavior concept organizational commitment performance productivity dysfunctional behavior
The outcome with the corresponding organizational behavior concept is as follows- Organizational Commitment - Ryan plans to quit in a few months.
Productivity - Amy sells 20 cars in a month.
Performance- Mary volunteers to help a new coworker learn how to use the company's intranet.
Dysfunctional Behavior - Sivan steals $1,000 from the company.
Organizational behavior is the academic study of how people interact within groups, the principles of which are primarily applied to make organizations more effective.
Organizational behavior research includes research areas dedicated to improving job performance, increasing job satisfaction, fostering innovation, and developing leadership, and is the foundation of organizational talent.
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what is the study of dollars and cents
The study of dollars and cents are referred to as economics. The anthropology of economics is focused on the production, distribution, trade, as well as consumption of products and services.
It studies how individuals, businesses, and governments allocate resources and make decisions, and how these choices impact the economy as a whole. One aspect of economics is the study of money and financial systems, including dollars and cents. This involves understanding topics such as inflation, interest rates, and monetary policy, as well as the role of financial markets and institutions in the economy. By studying dollars and cents, economists aim to understand how money affects economic activity and how economic activity affects the value of money. The value of money refers to its purchasing power, or the amount of goods and services that a unit of currency can buy. The value of money can change over time due to various factors such as inflation, interest rates, and monetary policy. Inflation is the increase in the overall price level of goods and services in an economy over time, which decreases the purchasing power of money. Interest rates, which are the cost of borrowing money, can also affect the value of money by making it more or less attractive to hold currency or other financial assets. Monetary policy, which refers to the actions taken by central banks to regulate the money supply and interest rates, can also impact the value of money by affecting the overall level of economic activity and the demand for money.
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Scarcity is a basic fact of economic life. Because of it, having more of one good thing almost always means having less of another (The Scarcity Principle). The Cost-Benefit principle holds that an individual (or firm or society) should take an action if, and only if, the extra benefit from taking the action is at least as great as the extra cost. The benefit of taking any action minus the cost of taking the action is called the economic surplus from that action. Hence, the Cost-Benefit principle suggests that we take only those actions that create additional economic surplus.
The cost-benefit analysis determines whether an action's benefits outweigh its costs. In the financial and accounting sectors, this concept is frequently applied when creating financial statements.
Financial statements frequently include data that is essential for a company's strategic decision-making, but gathering and presenting the information for the documents is expensive. For this reason, accounting managers frequently use the cost-benefit analysis rather than including full financial information in the documentation.
They could weigh the financial benefits of each piece of information against the costs involved in gathering it for the financial statement. The cost-benefit analysis analyses if the advantages of a course of action outweigh its expenses. This idea is frequently applied in the accounting and financial sectors when creating financial statements.
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Fly-By-Night Couriers is analyzing the possible acquisition of Flash-in-the-Pan Restaurants. Neither firm has debt. The forecasts of Fly-By-Night show that the purchase would increase its annual aftertax cash flow by $360,000 indefinitely. The current market value of Flash-in-the-Pan is $8 million. The current market value of Fly-By-Night is $26 million. The appropriate discount rate for the incremental cash flows is 8 percent. Fly-By-Night is trying to decide whether it would offer 30 percent of its stock or $11 million in cash to Flash-in-the-Pan. A. What is the synergy from the merger
In this case, the forecast shows that the purchase of Flash-in-the-Pan Restaurants would increase Fly-By-Night's annual aftertax cash flow by $360,000 indefinitely. This is the synergy from the merger.
The synergy from the merger is the increase in annual aftertax cash flow that results from the acquisition.
It is important to note that the $360,000 increase in cash flow is an estimate and may not reflect the actual results of the merger. The actual increase in cash flow may be higher or lower, depending on various factors such as the successful integration of the two firms, changes in market conditions, and other unforeseen events.
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which of the following is included in a broad definition of marketing?
Creating customer value, building customer relationships, and engaging customers.
Discovering, creating, and providing value to meet a target market's demands for goods and services is the process of marketing. Choosing a target audience, selecting specific qualities or themes to emphasise in advertising, launching marketing campaigns, attending trade shows and public events, creating products and packaging that appeal to consumers, and defining the terms of sale, such as the purchase price, discounts, warranties, and return policies are some examples of what may be involved. The seller, who is often a merchant or manufacturer, is responsible for marketing. Tasks are occasionally delegated to a specialised marketing company or advertising agency. Less frequently, a trade group or government organisation (like the Agricultural Marketing Service) would promote a whole sector of the economy or a specific location, frequently a particular sort of food.
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if kaden company's fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24. what is the break-even sales (units)?
$2,600 is the break-even sales (units) .
What is a sale that breaks even?
The quantity of revenue at which a business makes no profit is known as break even sales. This sales figure fully covers all of the variable expenses related to the sales as well as the underlying fixed expenses of a business.
The company has to make $2.7 million in sales to offset its fixed and variable costs in this example of breakeven point. The business will be profitable if it results in greater sales.
What distinguishes total sales from break-even sales?
The margin of safety is the differential between actual sales and sales needed to break even.
Break-even sales (units) = Fixed cost/(Selling price - Variable costs per unit)
Break-even sales (units) = $46,800/($42 - $24)
Break-even sales (units) = 2,600
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sara wants to establish a trust fund to provide $75,000 in scholarships each year that goes forever. she believes the fund can earn a fixed 6.15 percent annual rate of return. how much money must she contribute to establish the fund?
The money must she contribute to establish the fund is $1,219,512.
To establish the trust fund, the amount needed is
= $40000/6.15% = $1,219,512.
A trust fund is designed to hold and manage assets on behalf of someone else with the help of a neutral third party.
A trust fund includes donors, beneficiaries, and trustees.
Trust founders can set terms on how assets are held, collected, or distributed.
Trustees manage the Fund's assets and carry out its instructions, while Beneficiaries receive the Fund's assets or other benefits.
Trust funds can be revocable and irrevocable, and there are several variations that exist for specific purposes.
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Jonas, a retiree, wants to use his savings to open a day care facility for dogs. After deciding on the services that he would provide to his customers, he calculates costs versus the demand and the profit he could make depending on the volume of sales. After extensive deliberation, Jonas decides to take a bank loan because the needed initial investment is too high for opening the facility. Jonas is currently in the _____ stage of the new-product development process
implementation stage This stage involves the actual launching of the new product or service and the start of commercial production.
What is implement stage of commercial production?Some key steps involved in the implementation stage are:Securing funding: Jonas has already decided to take out a bank loan to finance the opening of the day care facility.Acquiring necessary permits and licenses: Jonas will need to obtain any necessary permits and licenses to legally operate the day care.Building the facility: This will involve physically constructing the day care, including the kennels, play areas, and any other necessary facilities.Hiring staff: Jonas will need to hire employees to help run the day care, including dog handlers, cleaners, and administrative staff.Marketing and advertising: Jonas will need to promote the day care to potential customers and build a client base.Opening the facility: Once everything is in place, Jonas can finally open the day care and start providing services to customers.The implementation stage is a critical step in the new-product development process, as it marks the start of commercial production and the realization of the business idea. Success in this stage is critical for the long-term success of the business.To learn more about implementing stage refer:
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mcmurtry corporation sells a product for $120 per unit. the product's current sales are 12,300 units and its break-even sales are 10,824 units. the margin of safety as a percentage of sales is closest to: multiple choice 88% 86% 14% 12%
The margin of safety as a percentage of sales is closest to 12%.
What are sales?
Sales are actions involving the sale of goods or the volume of items sold during a specified time frame. A sale also includes the provision of a service for a fee. A sale is a transaction that involves exchanging products or services for a specific sum of money. To put it another way, a sale is any action that involves giving the buyer possession of a thing or commodity in return for payment.
Sales in general business operations refer to any exchanges of money or value for the right to possess a good or get a service. Sales, in the context of accounting, refers to the income generated by a corporation via the selling of goods or services.
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now imagine a measure of well-being that includes time spent working in the home and taking leisure. true or false: the change in this measure of well-being would be less than the change in gdp.
A statement "the change in this measure of well-being would be less than the change in gdp." is true because the change in GDP must be less.
What is change in GDP?Rising GDP indicates that the economy is expanding and that the resources accessible to citizens - products and services, salaries and profits - are increasing. An rise in GDP raises money demand because consumers will need more money to execute the transactions required to acquire the additional GDP.
In other words, the transactions demand impact raises actual money demand. Real GDP is a measure of an economy's total products and services in a given year that takes into account price fluctuations.
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true or false: a relative risk of less than 1 means that there is no association between exposure and outcome.
A relative risk of less than 1 means that there is no association between exposure and outcome. This statement is false.
The risk ratio, also known as the relative risk (RR), is the ratio of the likelihood of an occurrence in an exposed group to the chance of an outcome in an unexposed group.
Together with risk difference and odds ratio, relative risk quantifies the relationship between exposure and outcome.
In the statistical analysis of data from ecological, cohort, medical, and intervention studies, relative risk is used to determine the strength of the association between exposures (treatments or risk factors) and outcomes.
The term "relative risk" is frequently used to describe the findings of randomized controlled trials. If the relative risk is offered without the absolute metrics, such as absolute risk or risk difference, this might be problematic.
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refer to exhibit 22-10. what price does this firm charge for its product? group of answer choices A. $25 B. $20 C. $10 D. $30 E. there is not enough information to answer this question.
That very same firm wanted to charge $20 for some of its good and services.
What does a firm do in a business?Describe a firm. A company that offers professional services is referred to as a firm. This can be a company, limited liability corporation (LLC), or partnership. Most businesses have a single location.
What does mean to be firm with someone?When you say someone is firm, you're implying that someone behave in a fashion that indicates they won't change their views or that they're the one in charge. She needed to treat him firmly. I don't wish to see you once more. Synonyms include severe, unbending, unswerving, and unmovable more words for firm
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A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate
The term "discounted cash flow" (DCF) refers to a method of valuation that calculates an investment's value based on its anticipated future cash flows.
Using estimates of how much money an investment will make in the future, DCF analysis seeks to evaluate the value of an investment today. Calculating the present value of a cash flow or series of cash flows that will be received in the future is the process of discounting.
Compounding is the process of transforming current values into future values. The values of three out of the four time-value-of-money variables must be known in order to complete this process. Discounting is the process of calculating the present value of a future sum. A discount rate is needed to determine the present value of some future sum.
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Correct Question:
A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate is _______.
Statement True False All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year.
Both the simple interest and compound interest approaches won't provide the same amount of interest by the end of the first year, assuming all other variables are equal.
a. True
This is accurate since compound interest is calculated by taking into account both the current balance and any interest that has already been earned. Thus, it accumulates on a larger balance than simple interest, which does so on a constant principal amount over the course of the entire period. Therefore, to close this gap, simple interest would require a higher rate.
Since compound interest is calculated on an accruing balance rather than a static balance, an account generating compound interest would grow quicker than an identical account calculated using simple interest.
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What Is Times Interest Earned Ratio?
The interest coverage ratio, sometimes referred to as the times interest earned ratio, is a financial indicator used to assess a company's capacity to service its debt. It is computed by dividing the interest expenditures by the profits before interest and taxes of the firm.
How is Times Interest Earned Ratio determined?By dividing a company's profits before interest and taxes (EBIT) by its interest expenditures, the times interest earned ratio (TIE) is calculated. Following is the formula:
EBIT / Interest Expenses = TIE
EBIT is computed by deducting operational costs from overall revenue of the firm. Interest expenditures are the sum that a business must pay in interest on its outstanding debt.
The resultant ratio displays the multiple by which a business's profits can pay its interest costs. While a low TIE ratio could be a sign of financial strain and a higher likelihood of default, a high TIE ratio suggests that a corporation has a solid capacity to satisfy its debt commitments.
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which account will have a zero balance after closing entries have been journalized and posted? A. prepaid insurance; B. salary and wages expenses; C. delivery truck; D. interest receivable
An income summary is a holding account that aggregates all income accounts except dividend costs. The income summary is not disclosed on financial statements because it is only used during the closure process, and the account balance is zero at the end of the closing procedure.
After closure entries have been journalized and recorded, all permanent accounts in the ledger should have a zero balance. A zero-balance account is a savings bank account with a zero balance that is not charged. According to RBI guidelines, it is legally known as a Basic Savings Bank Deposit (BSBD) account. Banks give this service to encourage individuals to save more.
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What are the differences between cash and accrual basis accounting? Provide an example of each type. Briefly explain why a company might need to adjust entries in the general ledger.
Cash basis accounting records transactions only when cash is exchanged. Accrual basis accounting records transactions when they occur, regardless of when cash is exchanged.
Example of cash basis accounting: A company sells goods for $100 on January 1, but does not receive payment until January 15. In cash basis accounting, the company would only recognize the $100 as income on January 15 when it receives payment.
Example of accrual basis accounting: A company sells goods for $100 on January 1, but does not receive payment until January 15. In accrual basis accounting, the company would recognize the $100 as income on January 1 when the sale occurs, regardless of when payment is received.
A company may need to adjust entries in the general ledger to correct errors, to update accounts to reflect new information, or to align with accrual basis accounting principles.
For example, if a company forgot to record a sale that occurred in December, an adjusting entry would be made in January to correct the error.
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"you can't compare apples and oranges" but GDP does. use market price bc market prices measure the amount people are WILLING to pay for goods--> gets their true value
if an apple is twice the price as an orange, the apple contributes twice as much to the GDP than the orange
Gross Domestic Product (GDP) is a measure of the total value of all goods and services produced in an economy during a specific period of time.
In the context of comparing apples and oranges, GDP uses market prices to measure the value of each good. Market prices reflect the amount that people are willing to pay for a particular good, which provides a way of determining the true value of the good to society.
For example, if an apple is twice the price of an orange, then the apple would contribute twice as much to GDP as the orange. This is because GDP measures the value of goods and services based on their market prices.
Therefore, while it may seem like "you can't compare apples and oranges" in the traditional sense, GDP provides a way of comparing the economic value of different goods by using market prices to measure their value to society.
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A small group of consumers that come into a facility to try new products while being observed is called ________.
A) target market
B) heavy user
C) focus group
D) interested consumers
A small group of consumers come into a facility to try new products while being observed is called focus group. Option C.
Focus groups are often used in market research to help determine the appeal of a product or service. They allow companies to gain insight into consumer preferences and gain feedback about their products.
Focus groups are an effective way for companies to identify changes that need to be made in a product or service to make it more appealing to consumers.
Focus groups help companies identify any potential obstacles to success and can provide valuable information about consumers’ opinions and behaviors.
By assessing consumer opinions, companies can make more informed decisions and create products that will be successful in the marketplace.
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which issue is a bank’s early warning signal of problem loans?
A bank's early warning signal of problem loans is usually a rise in the number of delinquencies and/or defaults on loans.
In the banking industry, early detection of problem loans is critical for mitigating the risk of loan loss. Banks use various methods and tools to monitor the performance of their loan portfolios, including the use of early warning signals. Early warning signals are indicators that a borrower is experiencing financial difficulties and may be unable to fully repay their loans. One of the most commonly used early warning signals is an increase in delinquencies and/or defaults. A delinquency occurs when a borrower misses one or more payments on their loan, while a default occurs when a borrower has failed to repay their loan according to the terms of their loan agreement. When a borrower begins to miss payments, it is a clear sign that they are experiencing financial difficulties, and banks use this information as an early warning signal to identify potential problem loans. In addition to an increase in delinquencies and defaults, banks also monitor changes in the borrower's financial condition, such as a decrease in income, an increase in debt, or changes in the value of collateral used to secure the loan. These changes can also be indicators of potential loan problems, and banks use this information to assess the risk of loan default and take appropriate action to mitigate the risk of loan loss.
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amy is leading a project that is several weeks into production. a flood has occurred near one of the storage facilities used to store materials for the project. the flood is preventing the workers from accessing the materials needed, and is threatening to delay the project finish date. amy checks the risk response plan and determines that the flood was never identified as being a potential project risk. therefore, a procedure to address the risk has not been documented. which item should amy use to address this issue? answers a. workaround b. management reserve c. contingency reserve d. alternatives generation
Amy can swiftly respond to the unexpected incident and reduce its influence on the project by using the management reserve. This helps to guarantee the project continues on track and is completed on schedule.
A management reserve is an emergency fund set aside by the project manager to deal with risks or problems that weren't planned for. Amy can utilize the management reserve to handle the impact of the flood on the project if a risk was not identified in the risk response plan and a mechanism to address it has not been specified. She can also use the management reserve to pay for any extra expenses linked to the delay, such as pay for overtime for employees or fees to speed up the delivery of supplies.
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Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background check in-house for $2. 24 per search with a fixed cost of $28,000. A third-party online security firm offered to do a similar security search for $8. 00 per person with an annual service contract with STE. If STE's forecast is 3,300 searches next year, should STE continue to do the search in-house or accept the third-party offer
Since the cost of the third-party offer is less than the cost of doing the background check in-house, STE should accept the third-party offer.
To determine the cost of doing the background check in-house, we can use the following formula:
Cost = (Number of searches * Cost per search) + Fixed cost
For in-house:
Cost = (3,300 * $2.24) + $28,000 = $7,912 + $28,000 = $35,912
For the third-party offer:
Cost = (3,300 * $8.00) = $26,400
Since the cost of the third-party offer ($26,400) is less than the cost of doing the background check in-house ($35,912), STE should accept the third-party offer.
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