Game theory is highly applicable to oligopoly behavior because oligopolists use strategic behavior. The first option is correct.
Oligopolies are characterized by a small number of firms operating in a market, where each firm's actions can have a significant impact on the others. As such, game theory provides a framework for analyzing the behavior of oligopolists and predicting their actions.
Contrary to the statement in the question, oligopolists do not ignore their rival firms, nor are they price takers. Instead, they actively monitor and respond to their competitors' actions in order to maintain their market position and maximize profits. Additionally, oligopolies can be profitable even without colluding, although collusion can increase profits further.
Overall, game theory is an essential tool for understanding oligopoly behavior and predicting the outcomes of strategic interactions among firms in these markets. By analyzing the incentives and strategies of oligopolists, we can gain insights into their behavior and develop more effective policies for regulating these markets. Thus, the first option is correct.
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You pay $2,020 for a bond with one year to maturity. At maturity you receive face value of $2,000 plus a coupon payment of $70. In this case:
In this case, the bond has a coupon rate of 3.48% (($70 coupon payment ÷ $2,020 purchase price) x 100)), and the yield to maturity is 2.89% ((($2,000 face value + $70 coupon payment) ÷ $2,020 purchase price) - 1 x 100). Despite paying more than the face value of the bond, the investor still receives a positive return due to the coupon payment received at maturity.
You pay $2,020 for a bond with one year to maturity. At maturity, you receive a face value of $2,000 plus a coupon payment of $70. In this case:
1. First, calculate the total amount you receive at maturity. You will receive the face value of the bond, which is $2,000, and the coupon payment, which is $70. So, at maturity, you will receive a total of $2,000 + $70 = $2,070.
2. Next, calculate the profit you made from the bond. To do this, subtract the initial price you paid for the bond from the total amount you received at maturity. So, your profit is $2,070 - $2,020 = $50.
3. Finally, calculate the return on investment (ROI). To do this, divide your profit by the initial price of the bond and multiply by 100 to get a percentage. Your ROI is ($50 / $2,020) * 100 = 2.475%.
In this case, you made a profit of $50 and had a return on investment of 2.475%.
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You pay $2,020 for a bond with one year to maturity. At maturity you receive face value of $2,000 plus a coupon payment of $70. In this case:
Question 4 options:
A. the coupon rate is 2.48%, the yield to maturity is 3.5%
B. the coupon rate is 3.5%, the yield to maturity is 2.48%
C. the coupon rate is 2.48%, the yield to maturity is 2.48%
D. the coupon rate is 3.5%, the yield to maturity is 3.5%
On January 1, a machine with a useful life of four years and a salvage value of $21000 was purchased for $176000. What is the depreciation expense for year 2 under straight-line depreciation
Depreciation expense for year 2 under straight-line depreciation is $39,250.
Straight-line depreciation is a method of allocating the cost of an asset evenly over its useful life. To calculate the annual depreciation expense, we subtract the salvage value from the purchase price and then divide the result by the useful life. In this case, the annual depreciation expense would be ($176,000 - $21,000) / 4 = $38,750. This means that for year 2, the depreciation expense would be $38,750 since the machine has a total useful life of four years. However, since straight-line depreciation assumes an even depreciation expense each year, we add half of the annual depreciation expense to the first year's expense to calculate the expense for year 2. Therefore, the depreciation expense for year 2 under straight-line depreciation is $38,750 / 2 + $38,750 = $39,250.
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the clause in a mortgage that protects the borrower's interest and requires the lender to acknowlege performance by the borrower is the
The clause in a mortgage that protects the borrower's interest and requires the lender to acknowledge performance by the borrower is known as the due-on-sale clause or acceleration clause.
This clause is typically included in a mortgage agreement to protect the lender's investment in the property by ensuring that the borrower does not transfer ownership of the property without the lender's permission.
Under the due-on-sale clause, the borrower is required to notify the lender of any plans to sell the property or transfer ownership.
If the borrower sells or transfers ownership of the property without the lender's permission, the lender has the right to accelerate the mortgage and require the borrower to repay the entire loan amount immediately.
This protects the lender from the risk of default by the new owner, as the lender has the right to foreclose on the property if the borrower is unable to repay the loan.
In summary, the due-on-sale clause or acceleration clause is a protective clause included in mortgage agreements that requires the borrower to obtain the lender's permission before selling or transferring ownership of the property.
This acceleration clause protects the lender's investment in the property by ensuring that the borrower does not transfer ownership without the lender's acknowledgement and permission.
If the borrower violates this clause, the lender has the right to accelerate the mortgage and require the borrower to repay the entire loan amount immediately.
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UPS, a delivery services company, has a beta of 1.4, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 1.3% and the expected market return is 5.8%. What is the expected return on a portfolio with 50% of its money in UPS and 50% in Wal-Mart
The expected return on a portfolio with 50% of its money in UPS and 50% in Wal-Mart is 6.74%.
The expected return on a portfolio with 50% of its money in UPS and 50% in Wal-Mart can be calculated as follows:
Expected Return = Risk-free rate + Beta * (Expected market return - Risk-free rate)
For UPS:
Expected Return (UPS) = 1.3% + 1.4 * (5.8% - 1.3%) = 8.06%
For Wal-Mart:
Expected Return (Wal-Mart) = 1.3% + 0.9 * (5.8% - 1.3%) = 5.42%
For the portfolio:
Expected Return (Portfolio) = 0.5 * Expected Return (UPS) + 0.5 * Expected Return (Wal-Mart)
Expected Return (Portfolio) = 0.5 * 8.06% + 0.5 * 5.42%
Expected Return (Portfolio) = 6.74%
Therefore, the expected return on a portfolio with 50% of its money in UPS and 50% in Wal-Mart is 6.74%.
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Which of the following areas does not make significant use of time value of money​ concepts? Question content area bottom Part 1 A. Capital investment analysis B. Lending and borrowing C. Marketing research D. Personal finance planning
The area that does not make significant use of time value of money concepts is C. Marketing research.
Marketing research focuses on studying consumer behavior, market trends, and competitors' strategies to develop effective marketing plans. While time is a crucial factor in marketing, it does not necessarily involve calculations of future cash flows or the effects of interest rates on investments, which are central to the concept of time value of money.
On the other hand, capital investment analysis, lending and borrowing, and personal finance planning all heavily rely on the principles of time value of money to make informed decisions about investments, loans, and savings. In short, time value of money is a critical concept in finance and related areas, but it may not be as relevant in other fields such as marketing research.
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A news report claims that tensions have increased at the Mexico and United States border due to increasing competition for blue-collar, low-wage, and mid-wage jobs. These increasing tensions are most consistent with __________ theory.
The increasing tensions at the Mexico and United States border due to competition for blue-collar, low-wage, and mid-wage jobs are most consistent with the Conflict theory.
According to this theory, society is composed of different groups with different interests, and these groups are in constant competition for resources, power, and wealth. In this case, the native workers and immigrants are competing for the same jobs, and this competition has created tension and conflict at the border.
The Conflict theory suggests that the tensions and conflicts between these groups are inevitable and will only intensify as long as the competition for resources persists. Therefore, to address this issue, policymakers need to find ways to address the root causes of the problem and reduce the competition for jobs.
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Ferkil Corporation manufacturers a single product that has a selling price of $30.00 per unit. Fixed expenses total $36,000 per year, and the company must sell 4,000 units to break even. If the company has a target profit of $18,000, sales in units must be: Multiple Choice 4,600 units 6,000 units 5,200 units 5,636 units
If the company has a target profit of $18,000, sales in units must be $5200 units. The correct option is C) 5,200 units.
To calculate the sales in units required to achieve a target profit of $18,000 for Ferkil Corporation, we need to use the formula: (fixed expenses + target profit) / contribution margin per unit. The contribution margin per unit is the difference between the selling price per unit and the variable cost per unit.
First, let's calculate the contribution margin per unit. We know the selling price per unit is $30.00, but we need to find the variable cost per unit. Let's assume the variable cost per unit is $15.00. Therefore, the contribution margin per unit is $30.00 - $15.00 = $15.00.
Next, we can plug in the numbers into the formula: ($36,000 + $18,000) / $15.00 = 5,200 units. This means Ferkil Corporation needs to sell 4,800 units to achieve a target profit of $18,000.
Therefore, the answer is C) 5,200 units.
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Patents and limited competition reduce ________, making high prices possible for technology products early in their life cycles. Multiple choice question. customer interest differentiation pricing constraints monopolies
Patents and limited competition reduce pricing constraints, making high prices possible for technology products early in their life cycles.
When a company obtains a patent for a product or technology, they have exclusive rights to manufacture and sell that product for a certain period of time, usually 20 years.
This means that no other company can produce or sell a similar product, which creates a monopoly in the market. With limited competition, the patent holder can charge higher prices for their product, since customers have no other options to choose from.Additionally, limited competition also reduces customer interest in the product. Since there are no alternatives available, customers may be less interested in purchasing the product at a high price. However, companies may use differentiation to try and make their product stand out from the competition, even if there is none. This can help increase customer interest and justify higher prices.In conclusion, patents and limited competition can lead to monopolies and higher prices for technology products, as there are no alternatives available in the market. However, companies can use differentiation to increase customer interest and justify higher prices.Know more about the monopolies
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he classification criterion assessing the extent to which a project is viewed as improving profits is called
The classification criterion that assesses the extent to which a project is viewed as improving profits is called financial feasibility.
Financial feasibility is an evaluation of the financial viability of a project, which involves a comprehensive analysis of its potential costs, revenues, and profitability. The goal of financial feasibility analysis is to determine whether a project can generate sufficient profits to justify the investment of time and resources.
There are several factors that need to be considered in financial feasibility analysis. First, the initial investment required to launch the project needs to be estimated. This includes costs such as equipment, raw materials, labor, and overhead expenses.
Second, the potential revenue streams that the project can generate need to be assessed. This includes forecasting the sales volume, pricing strategy, and market demand for the project's products or services. Finally, the profitability of the project needs to be evaluated by comparing the estimated costs and revenues to determine the return on investment.
Financial feasibility is an important criterion for project selection and decision-making. It helps organizations to determine whether a project is financially viable and has the potential to generate profits. Without a thorough financial feasibility analysis, organizations may invest in projects that are not profitable, resulting in wasted resources and lost opportunities.
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Sam and Betty Taylor maintain a home and they have two children. Their earned income in 2020 was $25,000 and adjusted gross income was $27,000. They file a joint return. What is the amount, if any, of their earned income tax credit for the year
Sam and Betty Taylor may be eligible for the earned income tax credit (EITC) for the year 2020. The EITC is a tax credit designed to help working families with low to moderate income.
The exact amount of the credit depends on the taxpayer's income, filing status, and number of children.
For the Taylor family, the maximum credit amount for 2020 would be $5,920 with two qualifying children. However, the credit is phased out gradually as income increases. Since their earned income is below the maximum limit for the credit, they may receive the full amount of the credit or a portion of it.
To determine the exact amount of the EITC, Sam and Betty should use the EITC Assistant tool on the IRS website or consult with a tax professional. It is important to note that the EITC is a refundable credit, which means that if the credit amount exceeds the taxes owed, the taxpayers can receive the difference as a refund.
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If a bank uses $100,000 from the sale of stocks to purchase a building for $80,000 and equipment for $10,000, the balance sheet at the end of the these transactions will be
When a bank uses $100,000 from the sale of stocks to purchase a building for $80,000 and equipment for $10,000, the balance sheet at the end of these transactions will show the assets of $100,000 and equity of $100,000
Assets:
Building: $80,000
Equipment: $10,000
Cash: $10,000 (the remaining balance of the $100,000 after the purchase of the building and equipment)
Total assets: $100,000
Liabilities:
Assuming there are no liabilities recorded in this transaction, we can assume that the bank has no liabilities.
Total Liabilities:$0
Equity:
Since there are no liabilities, the equity of the bank is equal to its assets.
Total equity:$100,000
Therefore, the balance sheet at the end of these transactions would show assets of $100,000 and equity of $100,000
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When a person benefits from the work or service of an organization like a union without joining or contributing to it, this person is referred to as
When a person benefits from the work or service of an organization like a union without joining or contributing to it, this person is referred to as a free rider.
A free rider is someone who benefits from the efforts of a group without contributing to it. In the context of a union, this means that someone may receive higher wages or better working conditions that have been negotiated by the union, without actually being a member of the union or contributing to its efforts. Unions often negotiate better working conditions, higher wages, and various other benefits for their members. Free riders benefit from these improvements without paying union dues or participating in union activities.
Free riders can be seen as taking advantage of the benefits without putting in the work or taking on the risks that come with being part of the organization.
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You are a network engineer for a San Francisco law firm. After the 1989 earthquake, an emphasis on continued business operation after future earthquakes dominated in the San Francisco business community. What type of plan focuses on ensuring that personnel, customers, and IT systems are minimally affected after a disaster
As a network engineer for a San Francisco law firm, the type of plan that focuses on ensuring that personnel, customers, and IT systems are minimally affected after a disaster is a Business Continuity Plan (BCP).
BCP is a comprehensive plan that outlines the procedures and strategies that an organization will use to continue its essential business operations after a disruptive event like an earthquake. The BCP typically includes steps for disaster recovery, backup and restoration of IT systems, communication and coordination among personnel, alternative work locations, and other critical business functions. By having a well-designed BCP in place, the law firm can minimize the impact of an earthquake or any other disaster and ensure that it can continue to provide essential services to its clients.
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A new manufacturing machine is expected to cost $278,000, have an eight-year life, and a $30,000 salvage value. The machine will yield an annual incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the payback period for the purchase.
To calculate the payback period, we need to find out how long it takes for the cumulative after-tax cash inflows to equal the initial investment.
First, we need to calculate the annual cash inflows, which is the incremental after-tax income plus the depreciation expense.
Annual cash inflow = Incremental after-tax income + Depreciation expense
= $35,000 + (($278,000 - $30,000) / 8)
= $35,000 + $31,000
= $66,000
Next, we can calculate the payback period by dividing the initial investment by the annual cash inflow.
Payback period = Initial investment / Annual cash inflow
= $278,000 / $66,000
= 4.21 years
Therefore, the payback period for the purchase is 4.21 years.
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When the rent for a property is computed on the gross sales at the site, what kind of lease is in place
When the rent for a property is computed on the gross sales at the site, kind of lease is in place is percentage lease.
In a percentage lease, the tenant pays basic rent as well as a portion of any profits made from operating on the rented property. This expression is utilised in commercial real estate. The base rate for lessees is often lower under percentage lease agreements, and the lessor has more upside potential.
Base rent (or minimum rent) and a percentage of the monthly or yearly gross sales generated on the property make up a percentage lease. The lessor benefits from some additional upside potential beyond what a traditional lease (i.e., no percentage of sales component) may provide, while the lessee may find this arrangement appealing since it reduces this fixed cost, which often accounts for a significant chunk of operational expenditures. The percentage lease also aligns the interests of the lessor and lessee.
By giving the tenant a desirable site and maintenance services, the lessor strengthens the retailer's presence to draw more foot traffic and, perhaps, more sales, some of which would be paid to the lessor under the percentage lease agreement.
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During the process of ________, the owner may abandon the property because the rents that can be collected are less than the costs involved in upkeep. urban blight gentrification filtering redlining blockbusting
Gentrification is a process where neighborhoods undergo significant changes, typically characterized by the influx of more affluent residents and an increase in property values.
Blockbusting is a related term that refers to a practice where real estate agents would encourage white homeowners to sell their properties at a low price, by claiming that people of color were moving into the area and would cause property values to decline. This unethical practices was used to profit off of racial fears and prejudices and contributed to the segregation of neighborhoods. The term "redlining" refers to a practice where banks and other lenders would refuse to provide loans or other financial services to people in certain neighborhoods, often based on race or ethnicity. This practice further exacerbated economic inequality and made it difficult for people in these neighborhoods to build wealth and invest in their communities."Filtering" is a process where properties become more affordable over time, as they age and newer, more expensive properties are built. This process can lead to lower-income residents being able to access housing in areas that were previously unaffordable, but it can also lead to neglect of older properties and disinvestment in neighborhoods.
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a client is considering listing an industrially zoned 10-acre site. it has been vacant for several years, and was formerly used as automobile junkyard. what would a responsible real estate licensee recommend the seller consider obtaining prior to putting the property on the market
A responsible real estate licensee would recommend the seller consider obtaining the following prior to putting the industrially zoned 10-acre site on the market:
1. Environmental Assessment: Since the site was formerly used as an automobile junkyard, it's crucial to evaluate the environmental condition of the property. This may involve conducting a Phase I Environmental Site Assessment (ESA) to identify any potential contamination or hazardous materials on the site.
2. Zoning Verification: Confirm the current zoning of the property to ensure it is still suitable for industrial use or determine if any changes have been made to the zoning regulations that may affect the site's usage.
3. Survey: Obtain an updated property survey to accurately depict the site's boundaries, easements, and any encroachments. This information will be helpful for potential buyers when reviewing the property.
4. Appraisal: Hire a professional appraiser to determine the fair market value of the property, taking into account its size, location, and any potential environmental issues that may affect its value.
5. Cleanup and Remediation Plan: If the environmental assessment reveals any contamination, develop a plan for the cleanup and remediation of the site to address any environmental concerns and to comply with applicable regulations.
By considering these factors and obtaining the necessary documentation, the seller can ensure they are providing accurate and valuable information to potential buyers, and the real estate licensee can effectively market the property.
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The accuracy of current modern forecasting falls off sharply for predictions made beyond _____ days into the future. a. three b. nine c. seven d. four e. two
The accuracy of current modern forecasting falls off sharply for predictions made beyond nine days into the future. This means that beyond the ninth day, the predictions made by forecasting models become less reliable and less accurate.
The reason for this is that there are many variables and factors that can impact the accuracy of a forecast, such as changing weather patterns, unforeseen events, and other unpredictable factors. Forecasting models rely on historical data, statistical algorithms, and other methods to make predictions about the future, but as time goes on, these models become less reliable due to the complexity of the variables involved. It's important to keep in mind that while forecasting can be a useful tool for planning and decision-making, it's not a perfect science and should be used with caution. In general, the further into the future a forecast is made, the less accurate it is likely to be, so it's important to be aware of the limitations of forecasting models and to use them in conjunction with other sources of information and analysis.
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Luke Enterprises has 300,000 shares of $20 par common stock outstanding. On January 19, Luke Enterprises declared a 3% stock dividend. The market price of the stock on January 19 was $28 per share. The journal entry to record the stock dividend would include
The effects on the company's financial statements and the stock dividend declared by Luke Enterprises are clearly depicted in this journal entry. The journal entry to record the stock dividend for Luke Enterprises would be as follows:
Debit: Retained Earnings: $840,000 ($20 x 300,000 shares x 3%)
Credit: Common Stock Dividend Distributable: $180,000 ($20 x 300,000 shares x 3%)
Credit: Paid-In Capital in Excess of Par: $660,000 ($8 x 300,000 shares x 3%)
The common stock dividend distributable account is used to temporarily hold the dividend until it is distributed to the shareholders. The paid-in capital in excess of par is used to record the increase in equity resulting from the market value of the dividend. Therefore, this journal entry records the stock dividend declared by Luke Enterprises and properly accounts for the impact on the company's financial statements.
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Suppose you bought a 16 percent coupon bond one year ago for $1,130. The bond sells for $1,190 today. What is your realized return if you sell the bond today
The realized return if the bond is sold today is 19.47%.
To calculate your realized return for selling the 16% coupon bond after one year, you need to consider both the capital gain and the interest received.
1. Calculate the capital gain: Subtract the purchase price from the current selling price.
Capital gain = $1,190 - $1,130 = $60
2. Calculate the annual interest payment: Multiply the bond's face value (assumed to be $1,000) by the coupon rate (16%).
Interest payment = $1,000 * 0.16 = $160
3. Add the capital gain and the interest payment to find the total return.
Total return = Capital gain + Interest payment = $60 + $160 = $220
4. Calculate the realized return by dividing the total return by the purchase price, then multiply by 100 to get the percentage.
Realized return = (Total return / Purchase price) * 100
Realized return = ($220 / $1,130) * 100 = 19.47%
So, your realized return for selling the 16% coupon bond after one year is 19.47%.
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When a consumer in Miami decides to purchase a particular product, such as sunglasses, they might be drawn to products and styles that are currently popular or have been popular before in this area or market. What factor helps influence this buying behavior
They might be drawn to products and styles that are currently popular or have been popular before in this area or market. The factor that helps influence this buying behavior is cultural influence.
Culture refers to the shared values, beliefs, customs, behaviors, and artifacts that characterize a group or society. Different cultures have different norms and expectations when it comes to consumption and purchasing decisions. In this case, the culture of Miami could be influencing the consumer's decision to purchase certain types of sunglasses that are popular or have been popular in the area. Furthermore, cultural influence can also manifest in the form of social influence. Social networks, family, friends, and other groups can also shape consumer behavior through shared attitudes, beliefs, and opinions. The influence of social networks on consumer behavior is particularly strong in cases where products are visible or conspicuous, such as fashion items like sunglasses. Therefore, understanding the cultural and social influences on consumer behavior is essential for marketers and businesses to develop effective marketing strategies and meet the needs of their target markets.
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You are considering the purchase of a new machine. You analyze two alternative machines that have different initial and ongoing costs and different useful lives. Whichever machine is purchased will be replaced at the end of its useful life. You should select the machine which has the:
When considering the purchase of a new machine, it is important to analyze the two alternative machines that have different initial and ongoing costs and different useful lives. In order to select the machine that is most suitable for your needs, you should consider the total cost of ownership over the machine's useful life.
This includes not only the initial purchase cost but also the ongoing costs such as maintenance, repairs, and energy consumption. Additionally, it is important to consider the machine's useful life and plan for its eventual replacement. Ultimately, the machine that has the lowest total cost of ownership over its useful life should be selected.
This decision will ensure that you make the most cost-effective investment for your business.
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A bond with a $2,000 face value, a 4% coupon rate and 3 years to maturity will pay the following cash flow if current market interest rates are 7%: In 1 year: _____, in 2 years: ______, in 3 years: ____.
A bond with a $2,000 face value, a 4% coupon rate and 3 years to maturity will pay the following cash flow if current market interest rates are 7%: In 1 year: $80, in 2 years: $80, in 3 years: $2,080. The correct option is B.
A bond with a $2,000 face value, a 4% coupon rate, and 3 years to maturity will pay the following cash flows if current market interest rates are 7%:
In 1 year, the bond will pay a cash flow of 4% of the face value ($2,000 * 0.04 = $80).
In 2 years, the bond will again pay a cash flow of 4% of the face value ($2,000 * 0.04 = $80).
In 3 years, the bond will pay the final cash flow consisting of the 4% coupon payment ($2,000 * 0.04 = $80) and the face value of the bond ($2,000), totaling $2,080.
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Complete question:
A bond with a $2,000 face value, a 4% coupon rate and 3 years to maturity will pay the following cash flow if current market interest rates are 7%: In 1 year: _____, in 2 years: ______, in 3 years: ____.
Question options:
a. $40, $40, $2,000
b. $80, $80, $2080
c. $140, $140, $2,140
A project requires a cash outflow of $100,000 today and another cash outflow of $20,000 next year (year 1). The project is expected to generate cash inflows of $16,000 per year for the next 19 years (years 2-20). The firm has a cost of capital (discount rate) of 8 percent. Should this project be accepted, and why
The project should be accepted as its net present value (NPV) is positive.
The NPV of the project, calculated using the given cash flows and the firm's cost of capital of 8 percent, is $53,385.44.\
A positive NPV indicates that the project is expected to generate returns that are greater than the cost of capital, and thus should be accepted. In this case, the project has an NPV that is significantly positive, indicating that it is a profitable investment for the firm.
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Paper Company receives a $3,788, 3-month, 9% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?
Upon receiving the $3,788, 3-month, 9% promissory note from Dame Company in settlement of an open accounts receivable, Paper Company will make the following entry: Debit: Notes Receivable $3,788.Credit: Accounts Receivable $3,788
This entry reflects the transfer of the open accounts receivable to a notes receivable account, as well as the recognition of the promissory note as an asset.
Upon receiving the promissory note, Paper Company will need to record the transaction in their accounting records. They will make the following journal entry:
1. Debit: Notes Receivable - $3,788
2. Credit: Accounts Receivable - $3,788
Explanation:
Step 1: Debit "Notes Receivable" for the principal amount of the promissory note, which is $3,788. This entry records the amount that Paper Company expects to collect from Dame Company in three months.
Step 2: Credit "Accounts Receivable" for the same amount, $3,788. This entry reduces the open accounts receivable balance owed by Dame Company to Paper Company, since the promissory note effectively replaces the outstanding receivable.
By making these entries, Paper Company records the receipt of the 3-month, 9% promissory note from Dame Company in settlement of the open accounts receivable.
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Cherokee Inc. is a merchandiser that provided the following information: Amount Number of units sold 12,000 Selling price per unit $ 17 Variable selling expense per unit $ 2 Variable administrative expense per unit $ 1 Total fixed selling expense $ 22,000 Total fixed administrative expense $ 14,000 Beginning merchandise inventory $ 9,000 Ending merchandise inventory $ 25,000 Merchandise purchases $ 90,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement.
The Traditional Income Statement of Cherokee Inc. is $58,000 and net income is $132,000.
Traditional Income Statement
Sales revenue:
Number of units sold x Selling price per unit
= 12,000 x $17
= $204,000
Cost of goods sold:
Beginning merchandise inventory + Purchases - Ending merchandise inventory
= $9,000 + $90,000 - $25,000
= $74,000
Gross profit:
Sales revenue - Cost of goods sold
= $204,000 - $74,000
= $130,000
Operating expenses:
Variable selling expense:
Number of units sold x Variable selling expense per unit
= 12,000 x $2
= $24,000
Variable administrative expense:
Number of units sold x Variable administrative expense per unit
= 12,000 x $1
= $12,000
Total variable expenses:
= $24,000 + $12,000
= $36,000
Fixed selling expense:
= $22,000
Fixed administrative expense:
= $14,000
Total operating expenses:
= $36,000 + $22,000 + $14,000
= $72,000
Net income:
Gross profit - Operating expenses
= $130,000 - $72,000
= $58,000
Contribution Format Income Statement
Sales revenue:
Number of units sold x Selling price per unit
= 12,000 x $17
= $204,000
Variable expenses:
Variable selling expense:
Number of units sold x Variable selling expense per unit
= 12,000 x $2
= $24,000
Variable administrative expense:
Number of units sold x Variable administrative expense per unit
= 12,000 x $1
= $12,000
Total variable expenses:
= $24,000 + $12,000
= $36,000
Contribution margin:
Sales revenue - Variable expenses
= $204,000 - $36,000
= $168,000
Fixed expenses:
Fixed selling expense:
= $22,000
Fixed administrative expense:
= $14,000
Total fixed expenses:
= $22,000 + $14,000
= $36,000
Net income:
Contribution margin - Fixed expenses
= $168,000 - $36,000
= $132,000
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At the peak of the post-war economic boom in 1950s, ______ of America's workers were unionized, and in some occupations their wages were a third higher than their non-union counterparts.
At the peak of the post-war economic boom in the 1950s, around 30% of America's workers were unionized.
This number was significant as it meant that a large proportion of the workforce had access to collective bargaining power, which allowed them to negotiate better wages, benefits, and working conditions. In some occupations, unionized workers earned up to a third more than their non-union counterparts. This was especially true for manufacturing jobs, where unions were particularly strong. However, the decline of union membership over the years has resulted in a significant decrease in collective bargaining power for workers. As a result, wages and benefits have stagnated or even decreased for many workers, especially in low-wage industries such as retail and hospitality.
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Entry of new firms in monopolistically competitive industries can convey a positive externality on consumers because new products result in more consumer surplus. This externality is called the
The externality that occurs when the entry of new firms in monopolistically competitive industries leads to increased consumer surplus due to the introduction of new products is known as the "product-variety externality".
The product-variety externality is a type of positive externality because it benefits consumers who have a greater variety of products to choose from, which increases their utility or satisfaction. When new firms enter the market, they may introduce new products, variations of existing products, or improvements to existing products, which increases the overall variety of products available to consumers. This increased product variety provides more choices and allows consumers to find products that better match their preferences, increasing their consumer surplus.
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A _____ DSS decision model controls the work of the organization, such as financial planning and sales promotion planning.
A Tactical DSS (Decision Support System) decision model controls the work of the organization, such as financial planning and sales promotion planning.
This type of DSS enables managers to analyze and make decisions on short-term and medium-term organizational plans. By integrating data from various sources, tactical DSS helps decision-makers understand the impact of their decisions on key performance indicators (KPIs) and overall organizational objectives. Tactical DSS plays a crucial role in optimizing resource allocation, monitoring budgets, and forecasting demand, among other tasks. Financial planning, for example, may involve analyzing budgets, revenues, and expenditures, while sales promotion planning can include identifying target customer segments, setting promotional objectives, and developing marketing strategies to achieve those objectives. By providing managers with the necessary tools to analyze data and identify trends, a tactical DSS can improve decision-making and ultimately lead to better organizational performance. The use of this system also fosters collaboration, as it allows stakeholders to share information and work together on important decisions.
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Organizations may manufacture products or provide services they can obtain at lower costs elsewhere in order to
Organizations may manufacture products or provide services they can obtain at lower costs elsewhere in order to increase their profit margins and remain competitive in the market.
Outsourcing is a common practice used by organizations to reduce costs and improve efficiency. By outsourcing certain products or services, organizations can take advantage of lower labor costs, access specialized expertise and technology, and focus on their core competencies.
This allows organizations to lower their production costs, increase their profit margins, and remain competitive in the market. However, outsourcing also has its challenges, including quality control issues, communication difficulties, and the risk of losing control over critical business processes. As such, organizations need to carefully evaluate the benefits and risks of outsourcing before making a decision.
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