Answer: a. The y-axis intercept would decline, and the slope would increase.
Explanation:
The security market line is simply refered to as the graphical representation of a CAPM which is the capital asset pricing model and it simply shows the market risk, of the securities in the market which is then plotted against the market return.
When the expected inflation rate decreases and the investors also become more risk averse, the Security Market Line would be affected, as the y-axis intercept would decline, and the slope would increase.
CL
ratio
Cygnus has a
dividend cover ratio
of 4.0 times and expects
zero growth in dividends. The company
has one million $1 ordinary shares
în issue and the market capitalization of
the
company
is $ 50 million
After tax profits for next year is expected to be $20 million.What is the cost of equity capital?
Answer:
The cost of equity is "10.00%".
Explanation:
The given values are:
After tax profits,
= $20 million
Number of shares,
= 1 million
Dividend cover ration,
= 4.0
Market capitalization,
= $50 million
Now,
The earning per share (EPS) will be:
= [tex]\frac{After \ tax \ profits}{Number \ of \ shares}[/tex]
On substituting the values, we get
= [tex]\frac{20}{1}[/tex]
= [tex]20[/tex] ($)
The dividend cover ratio = [tex]\frac{EPS}{Dividend \ per \ share}[/tex]
On substituting the given values, we get
⇒ [tex]4.0=\frac{20}{Dividend \ per \ share}[/tex]
⇒ [tex]Dividend \ per \ share=\frac{20}{4}[/tex]
⇒ [tex]=5[/tex] ($)
Market per share price will be:
= [tex]\frac{Market \ capitalization}{Number \ of \ shares}[/tex]
= [tex]\frac{50}{1}[/tex]
= [tex]50[/tex] ($) per share
So,
The cost of equity capital will be:
= [tex][\frac{Expected \ dividend}{Market \ price} ]+Growth \ rate[/tex]
On putting the values in the above formula, we get
= [tex][\frac{5}{50} ]+0.00[/tex]
= [tex]0.1+0.00[/tex]
= [tex]0.1[/tex] i.e., [tex]10.00[/tex]%
Creating a Business Plan: Why is the section on key personnel so important?
Answer:
D- Investors invest in people even more than ideas.
Explanation:
Took the quiZ
A corporation is concerned about their exposure to criminal liability after the most recent election cycle placed a number of new legislators in Congress who campaigned against corporate corruption. Select the strategy that would be least effective in reducing the company's criminal liability.
A. It could prioritize ethical leadership when making hiring decisions for management-level positions.
B. It could encourage reporting by establishing internal protections for whistleblowers beyond what is provided by Congressional law.
C. It could strengthen its code of ethics to reflect the current political mood.
D. It could donate to the election campaigns of the new members of Congress to establish goodwill.
Answer:
The strategy that would be least effective in reducing the company's criminal liability is:
D. It could donate to the election campaigns of the new members of Congress to establish goodwill.
Explanation:
While the other three options will effectively reduce the company's criminal liability exposure, option D is the least that is likely to have a positive or effective effect. This implies that option D is most likely to aggravate the criminal liability of the company as it will be regarded as bribery to cover up a crime.
Hampton Company reports the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Sales $ 71,000 Accounts receivable increase $ 8,000 Expenses Inventory decrease 4,000 Cost of goods sold 42,000 Salaries payable increase 1,000 Salaries expense 10,000 Depreciation expense 5,000 Net income $ 14,000
Required: Prepare the operating activities section of the statement of cash flows for Hampton Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
See below
Explanation:
Statement of cash flow from operating activities using the indirect method.
Net income
$14,000
Adjustment for non cash items:
Depreciation expense
$5,000
Adjustments for changes in working capital:
Increase in accounts receivables
($8,000)
Decrease in inventory
$4,000
Increase in salaries payable
$1,000
Net cash from operating activities
$16,000
what does "the customer is always right" mean
A company called Brightline has made a deal with Disney to create a rail station at Disney Springs on its planned route from Miami to Tampa. Read about this. Is a private rail link a good idea? Will it make Amtrak function any better? Will it create openings for private sector rail owner/operators as was the case in the USA before Amtrak and as is the case in the UK where not all rail services are BritRail?
Answer:
The answer for all three questions is yes.
A private player will increase competition and will make Amtrak provide a better service. Private companies are generally more efficient since their focus is on creating value.
Amtrak might benefit since the private rail might be used as additional help when their service is overloaded.
Increased competition and increase in private investment is always better for everyone since it creates new opportunities.
The objective theory of contracts refers to the fact that in determining whether a valid offer exists, the court will mainly consider whether: (A) The offeror and offeree were acting in a calm, reasonable, unemotional manner. (B) The intentions--both obvious and unobserved--of the offeror and offeree match their actions. (C) The offer would seem fair from the perspective of a prudent and reasonable person. (D) A reasonable person, observing the situation, would believe a genuine offer had been made.
Answer:
(A) The offeror and offeree were acting in a calm, reasonable, unemotional manner.
Explanation:
A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.
There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implies contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, etc.
Mutual assent is a legal term which represents an agreement by both parties to a contract. When two parties to a contract both have an understanding of the parameters, terms and conditions surrounding a contract, it ultimately implies that they are in agreement; this is generally referred to as mutual assent.
Hence, the objective theory of contracts refers to the fact that in determining whether a valid offer exists, the court will mainly consider whether the offeror and offeree were acting in a calm, reasonable, unemotional manner.
Note: the offeror is the party that offers the project to another party while the offeree is the recipient of the offer in a contract.
Boxwood Company sells blankets for $40 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units Cost May 03 Purchase 5 $14 10 Sale 3 17 Purchase 15 $15 20 Sale 5 23 Sale 2 30 Purchase 15 $19 Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method. a.$50 b.$80 c.$20 d.$110
Answer:
The company had no beginning inventory on May 1. May 3 Purchase 5 $20 10 Sale ... Boxwood Company sells blankets for $40 each. The following was taken
Explanation:
Multiple Choice Question Valpar Company produces several lines of laundry hampers. The factory is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. During the upcoming period the company expects to produce 72,000 units. The costs and cost drivers associated with four activity cost pools are given below: Activities Unit Level Batch Level Product Level Facility Level Cost $20,000 $10,000 $15,000 $36,000 Cost Driver 4,000 labor hours 400 set-ups % of use 72,000 units Production of 20,000 units of its popular foldable hamper required 2,000 labor hours, 20 setups, and consumed one-quarter of the product sustaining activities. What amount of batch-level costs will be allocated to the product
Answer:
$500
Explanation:
Calculation to determine the amount of batch-level costs that will be allocated to the product
Using this formula
Allocation rate=(Total batch level overhead cost/Total activity base ) * Set-ups
Let plug in the formula
Allocation rate=( $10,000/400 set-ups) *20 set-ups
Allocation rate=$25 per set-up *20 set-ups
Allocation rate=$500
Therefore the amount of batch-level costs that will be allocated to the product is $500
An employee receives an hourly rate of $18, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $5,500; Social security tax rate, 7% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 4% on the first $7,000; federal unemployment compensation tax, 1% on the first $7,000. Prepare the journal entries to record the salaries expense and the employer payroll tax expense
Answer:
total salary = (40 x $18) + (6 x $18 x 1.5) = $882
Dr Salaries expense 882
Cr Federal income tax withholding payable 120
Cr OASDI tax withholding payable 61.74
Cr Medicare tax withholding payable 13.23
Cr Salaries payable 687.03
Dr Payroll tax expenses 119.07
Cr OASDI tax payable 61.74
Cr Medicare tax payable 13.23
Cr SUTA tax payable 35.28
Cr FUTA tax payable 8.82
At the end of 2020, an italian subsidiary of a U.S. parent reports 1000000 euros in equipment purchased when the exchange rate was $.140, and 3000000 euros in equipment purchased when the exchange rate was $1.50. The avrage exchange rate for 2020 is $1.35, and the beginning and ending rates for 2020 are $1.42 and $1.31, respectively. If the Italian subsidiary's functional currency is the U.S. dollar, the equipment account, in U.S. dollars is
Answer: $5,900,000
Explanation:
If If the Italian subsidiary's functional currency is the U.S. dollar, the equipment account, in U.S. dollars will be calculated as:
Equipment purchased = € 1000000
Exchange rate = $1.40
Amount in dollars = $1,400,000
Equipment purchased = € 3000000
Exchange rate = $1.50
Amount in dollars = $4,500,000
Therefore, the equipment account, in U.S. dollars will be:
= $1,400,000 + $4,500,000
= $5,900,000
To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, Teddy Bower has no expertise in manufacturing those kinds of boots. Therefore, Teddy Bower contacted several Taiwanese suppliers to request quotes and $38 per pair of boots was the best quote. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $54. However, all remaining boots can be sold off at a 50% discount at the end of the season. What is the underage cost Cu
Answer:
Undergo cost is $14
Explanation:
Undergo cost of Teddy Bower is $16 ( $54 - $38)
Undergo cost the total cost for a company which is not to be recovered from the sales. The undergo cost for Teddy Bower is $14 since the company has asked for quote from different suppliers and they quoted the maximum of $38 per pair of boots. The company has best and maximum quote of $54 above which the company predicts it can not sell the pair of boots.
15. Consider a no-load mutual fund with $400 million in assets, 50 million in debt, and 15 million shares at the start of the year; and $500 million in assets, 40 million in debt, and 18 million shares at the end of the year. During the year investors have received income distributions of $0.50 per share, and capital gains distributions of $0.30 per share. Assuming that the fund carries no debt, and that the total expense ratio is 0.75%, what is the rate of return on the fund
Answer:
12.09%.
Explanation:
Calculation to determine the rate of return on the fund
First step is to calculate the beginning year NAV
Beginning year NAV = ($400 million assets - 50 million debt) / 15 million shares
Beginning year NAV = 23.33
Second step is to calculate the ending year NAV
Ending year NAV = ($500 million assets - (500*0.75% expense) - 40 million debt] / 18 million shares
Ending year NAV =[456.25/18 million shares]
Ending year NAV =25.35
Now let calculate the return using this formula
Return = (Ending NAV -beginning NAV + Capital gain + income) / Beginning NAV)
Let plug in the formula
Return = (25.35-23.33+0.30+0.50)/23.33
Return = 12.09%
Therefore the rate of return on the fund is 12.09%
Required:
1. & 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b. The company records prepaid and unearned items in balance sheet accounts.
3. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30.
4. Journalize the adjusting entries for the month and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of April 30, 2017.
5b. Prepare the statement of retained earnings for the month of April 30, 2017.
5c. Prepare the balance sheet at April 30, 2017.
6a. Prepare journal entries to close the temporary accounts and then post to Requirement 6b.
6b. Post the journal entries to the ledger.
7. Prepare a post-closing trial balance.
April 1 Nozomi invested $47,000 cash and computer equipment worth $40,000 in the company in exchange for common stock
2 The company rented furnished office space by paying $2,200 cash for the first month's (April) rent
3 The company purchased $2,000 of office supplies for cash
10 The company paid $2,200 cash for the premium on a 12-month insurance policy. Coverage begins on April 11
14 The company paid $1,300 cash for two weeks' salaries earned by employees
24 The company collected $14,000 cash on commissions from airlines on tickets obtained for customers
28 The company paid $1,300 cash for two weeks salaries earned by employees
29 The company paid $300 cash for minor repairs to the company's computer
30 The company paid 1,100 cash for this month's telephone bill
30 The company paid $2,000 cash in dividends.
The company's chart of accounts follows:
101 Cash 106 Accounts Receivable 124 office Supplies 128 Prepaid Insurance 167 Computer Equipment 168 Accumulated Depreciation-Computer Equip 209 Salaries Payable 307 Common Stock 318 Retained Earnings 319 Dividends 405 Commissions Earned 612 Depreciation Expense Computer Equip 622 Salaries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary
Use the following information:
a. Two-thirds (or $122) of one month's insurance coverage has expired
b. At the end of the month, $600 of office supplies are still available
c. This month's depreciation on the computer equipment is $400.
d. Employees carned $580 of unpaid and unrecorded salaries as of month-end
e. The company carned $2,250 of commissions that are not yet billed at month-end
Answer:
1- Cash (Dr.) $ 47,000
Computer (Dr.) $ 40,000
Common Stock (Cr.) $ 87,000
2- Rent Expense (Dr.) $2,200
Cash (Cr.) $2,200
3- Office Supplies (Dr.) $2,000
Cash (Cr.) $2,000
10- Prepaid Insurance (Dr.) $2,200
Cash (Cr.) $2,200
14- Salaries Payable (Dr.) $14,000
Cash (Cr.) $14,000
24- Cash (Dr.) $14,000
Commission from Airline (Cr.) $14,000
28- Salaries Payable (Dr.) $1,300
Cash (Cr.) $1,300
29- Computer Repair Expense (Dr.) $300
Cash (Cr.) $300
30- Telephone Bill Expense (Dr.) $1,100
Cash (Cr.) $1,100
30- Dividend Payable (Dr.) $2,000
Cash (Cr.) $2,000
Explanation:
The company has incurred business transactions which are recorded in the system as journal entries. These entries are then posted to create ledgers which shows the summarize form of all the transactions. These ledger then create trial balance which displays complete account balances of all the transactions separately.
26223-CZ company a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The 26223-CZ company based its predetermined overhead rate for the current year on the following data: Total machine-hours 50,000 Total fixed manufacturing overhead cost $ 400,000 Variable manufacturing overhead per machine-hour $ 6 Recently, Job D284 was completed with the following characteristics: Number of units in the job 40 Total machine-hours 100 Direct materials $ 750 Direct labor cost $ 2,750 If the company marks up its unit product costs by 60% then the selling price for a unit in Job D284 is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
$4,900
Explanation:
Total variable overhead estimated
= $6 × 50,000
= $300,000
Therefore,
Total overhead estimated = Total variable overhead estimated + Total fixed overhead estimated
= $300,000 + $400,000
= $700,000
Predetermined overhead rate
= $700,000/50,000
= $14 per machine hour
Total overhead applied
= $14 × 100
= $1,400
Therefore,
Total job cost = Direct material + direct labor + total overhead
= $750 + $2,750 + $1,400
= $4,900
Find a false statement on bond duration. Multiple choice question. With time to maturity and yield to maturity held constant, a bond's duration and interest rate sensitivity are higher when the coupon rate is lower. With other factors held constant, the duration of a coupon bond is higher when the bond's yield to maturity is higher. Duration always increases with maturity for a premium bond. The duration of a zero-coupon bond equals its time to maturity.
Answer:
✓With time to maturity and yield to maturity held constant, a bond's duration and interest rate sensitivity are higher when the coupon rate is lower.
✓The duration of a zero-coupon bond equals its time to maturity.
✓Duration always increases with maturity for a premium bond.
Explanation:
Bond duration in finance can be regarded as a way used in measuring
the likelyhood or how much the prices of bond to change when and there is a movement in interest rates. It can be defined as the measurement of the risk interest rate. With Understanding about bond duration, it will be easier for investors to determine how bonds can fit in to investment portfolio. It should be noted that With other factors held constant, the duration of a coupon bond is higher when the bond's yield to maturity is higher.
The Converting Department of Hopkinsville Company had 640 units in work in process at the beginning of the period, which were 70% complete. During the period, 13,600 units were completed and transferred to the Packing Department. There were 720 units in process at the end of the period, which were 25% complete. Direct materials are placed into the process at the beginning of production.
Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".
Hopkinsville Company
Number of Equivalent Units of Production
Whole Units Direct Materials Equivalent Units Conversion Equivalent Units
Inventory in process, beginning
Started and completed
Transferred to Packing Department
Inventory in process, ending
Total
Answer:
Whole units 14,320
Direct materials equivalent units 13,680
Conversion costs equivalent units 13,332
Explanation:
Calculation to Determine the number of equivalent units of production with respect to direct materials and conversion costs.
Hopkinsville Company Number of Equivalent Units of Production
WHOLE UNITS
Inventory in process, beginning 640
Started and completed 12,960
(13,600-640)
Transferred to Packing Department 13,600
(640+12,960)
Inventory in Process ending 720
Total 14,320
(13,600+720)
DIRECT MATERIALS EQUIVALENT UNITS
Inventory in process, beginning 0
Started and completed 12,960
(13,600-640)
Transferred to Packing Department 12,960
Inventory in Process ending 720
Total 13,680
(12,960+720)
CONVERSION EQUIVALENT UNITS
Inventory in process, beginning 192
[640-(640*70%)]
Started and completed 12,960
(13,600-640)
Transferred to Packing Department 13,152
(192+12,960)
Inventory in Process ending 180
(720*25%)
Total 13,332
(13,152+180)
Madison Foods Corp. is frustrated in its efforts to sell products in Europe because several countries are demanding that the company label products in the specific language associated with the country. These demands are examples of a Multiple Choice trade obstacle. trademark. trade role. trade name.
Answer: Trade obstacle
Explanation:
From the information given, we can infer that the demands are examples of trade obstacle.
Trade obstacles refers to the barriers which hinder a trade or the restrictions on an international trade. Trade obstacles can be tariffs or other non-tariff methods. Trade obstacles lead to difficulties in the sale of a product to other countries.
The demand are example of Trade obstacle
What is a Trade obstacle?It means the barriers that should be hindered with respect to the trade or the restrictions that should be on international trade. It could be tariffs or it can be non-tariff methods. It result in difficulties for selling the product to the other countries.
Learn more about demand here: https://brainly.com/question/24741453
Minstrel Manufacturing uses a job order costing system. During one month, Minstrel purchased $226,800 of raw materials on credit; issued materials to production of $219,000 of which $37,200 were indirect. Minstrel incurred a factory payroll of $164,400, of which $47,200 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. Minstrel's beginning and ending Work in Process Inventory are $17,900 and $31,800 respectively. Compute the cost of jobs transferred to Finished Goods Inventory.
Answer:
$460,900
Explanation:
The computation of the cost of jobs transferred to Finished Goods Inventory is shown below:
= beginning wip + Direct material + direct labor + manufacturing overhead - closing wip
= $17,900 + ($219,000 - $37,200) + ($164,400 - $47,200) + 150% of $117,200 - $31,800
= $17,900 + $181,800 + $117,200 + $175,800 - $31,800
= $460,900
Capital stock was issued in exchange for $363,000 cash.Purchase $186,000 of equipment by making a $63,000 cash down payment and signing a note payable for the balance.Made a $36,500 cash payment on the note payable from the purchase of equipment.Sold a piece of equipment for cash of $21,000. The equipment was sold at cost, so there is no gain or loss on the sale.What is the balance in the Note Payable account at the end of March
Answer:
$86,500
Explanation:
Open a Note Payable Account. Only focus on the events that affect this Account only.
Note Payable Account
Beginning Balance $0
Issue of Note Payable $123,000
Repayment of Note Payable ($36,500)
Ending Balance $86,500
therefore,
the balance in the Note Payable account at the end of March is $86,500.
Helmers Corporation manufactures a single product. Variable costing net operating income last year was $95,000 and this year was $113,900. Last year, $35,400 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $13,500 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income last year
Answer:
$59,600
Explanation:
Calculation for the absorption costing net operating income last year
Using this formula
Absorption costing net operating income last year=Variable costing net operating income last year -fixed manufacturing overhead costs last year
Let plug in the formula
Absorption costing net operating income last year=$95,000-$35,400
Absorption costing net operating income last year=$59,600
Therefore the absorption costing net operating income last year was $59,600
Stallion Corporation sold $190,000 par value, 10-year first mortgage bonds to Pony Corporation on January 1, 20X5. The bonds, which bear a nominal interest rate of 10 percent, pay interest semiannually on January 1 and July 1. The entry to record interest income by Pony Corporation on December 31, 20X7, was as follows:
Note: Assume using straight-line amortization of bond discount or premium.
General Journal Debit Credit
Interest Receivable 9,500
Interest Income 9,025
Investment in Stallion Corporation Bonds 475
Pony Corporation owns 65 percent of the voting stock of Stallion Corporation, and consolidated statements are prepared on December 31, 20X7.
Required:
A. What was the original purchase price of the bonds to Stallion Corporation?
B. What is the balance in Pony's bond investment account on December 31, 20X7?
C. Prepare the worksheet elimination entry or entries needed to remove the effects of the intercompany ownership of bonds in preparing consolidated financial statements for 20x7.
• Record the entry to eliminate the effects of the intercompany ownership in the bonds.
• Record the entry to eliminate the intercompany interest receivables/payables.
Answer:
a. Amortization of Bond Premium semi-annual = $475
Amortization of Bond Premium annual = $475*2 = $950
Bond Premium = $950*10 years = $9,500
Par value of Bonds $190,000
Premium on Bonds $9,500
Original Price of Bonds $199,500
b. Original Purchase Price = $199,500
Semi-annual periods from Jan 1,20X5 - Dec 31,20X7 = 3 yrs*2 = 6 periods
Premium amortization till Dec 31, 20X7 = $475*6 = $2,850
Balance in Bond Investment account = $199,500 - $2,850
Balance in Bond Investment account = $196,650
c. Event Accounts & Explanation Debit Credit
1. Bonds Payable $190,000
Bond Premium ($9,500 - $2,850) $6,650
Interest Income ($9,025*2) $18,050
Investment in Stallion Corporation Bonds $196,650
Interest Expense $18,050
(To record the entry to eliminate the effects of the
inter-company ownership in the bonds)
2. Interest Payable $9,500
Interest Receivable $9,500
(To record the entry to eliminate the inter-company
interest receivables/payable)
Which of the statements is not true about a bank run? Bank runs are bad for the bank affected and usually good for the bank's competitors. Fears leading to bank runs can be self-fulfilling. Deposit insurance is designed to reduce the risk of bank runs for depository banks. There was a wave of bank runs during the Great Depression. Since the Great Depression the government has set up regulation that has eliminated most bank runs.
Answer:
Explanation:
90% of people marry there 7th grade love. since u have read this, u will be told good news tonight. if u don't pass this on nine comments your worst week starts now this isn't fake. apparently if u copy and paste this on ten comments in the next ten minutes you will have the best day of your life tomorrow. you will either get kissed or asked out in the next 53 minutes someone will say i love u
Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $90 comma 000 a year, and he pays workers $110 comma 000 in wages. In return, he produces 300 comma 000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 1 percent and that the farmer could otherwise have earned $45 comma 000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $nothing . (Enter your response as an integer.)
Answer:
Economic profit =$645,000
Explanation:
Economic profit is the difference between revenue and out of pocket expenses plus opportunity cost.
Opportunity cost is the value of the benefit sacrificed in favour of a decision. It is the value of the next best alternative forgone in favour of a decision.
For example, the opportunity cost of the farmer is the interest rate he would have earned had he invested the money in savings account plus the salary forgone as a salesman
Economic profit = Revenue - out-of-pocket expenses - opportunity cost
Opportunity cost = interest foregone + salary forgone
= (1% × $1,000,000) + 45,000 = 55,000
Out of pocked trading expenses = 110,000 + 90,000 = $200,000
Revenue = $3 × 300,000 = $900,000
Economic profit = 900,000 -200,000-55,000= $645,000
Economic profit =$645,000
On October 1, Vista View Company rented warehouse space to a tenant for $2,600 per month. The tennant paid five months rent in advance on that date, with the lease begginning immediately. The cash recipt was credited to the Unearned Rent account. The company's annual accounting period ends on December 31. The adjusting entry needed on December 31 is:
Answer:
The adjusting entry needed on December 31 is:
December 31
Debit : Unearned Rent $7,800
Credit : Rent Income $7,800
Explanation:
First, lets go through the accounting process of this journal as it started on October 1. Then afterwards we get to understand what needs to be adjusted and how.
October 1 - Vista View Company receives rent in advance.
Vista View Company, is not yet entitled to this amount since tenant has not used its services yet. That why the journal should be a simple Debit of Cash and Credit of Unearned Rent by the total of five months paid in advance $13,000 ($2,600 x 5 months).
December 31 - Now three months have expired and this period the Landlord is entitled to the amount that was previously received but only for the 3 months period.
Thus we need to recognize revenue and de-recognize the Unearned Rent liability with the amount for 3 months` rent
Do It! Review 9-2a On January 1, 2017, Salt Creek Country Club purchased a new riding mower for $17,500. The mower is expected to have a 10-year life with a $600 salvage value. What journal entry would Salt Creek make on December 31, 2017, if it uses straight-line depreciation
Answer:
Salt Creek should make a journal entry to record full one year depreciation expenses relating to the mower at 31st December 2017 as followed;
Dr Depreciation expenses - Machinery $1,690
--------Cr Accumulated depreciation - Machinery $1,690
Explanation:
Depreciation refers to the fall in the value of an asset. The annual depreciation expenses relating to Mower would be calculated as;
Annual depreciation expense = (Initial cost of Mower - Estimated salvage value) / Expected useful life.
= ($17,500 - $600) / $10
= $16,900 / $10
= $1,690
Since the Mower is purchased on January 1st, 2017, at 31st December 2017, Salt creek should make a entry to record full year depreciation expense.
6. The recommended approach for strategy formulation by a leader is for him or her to: Group of answer choices B. inspire a large number of people to help achieve organizational purposes. D. delegate the task to the company planning department. A. involve people in making only decisions that are less critical. C. rely heavily on mathematical forecasts of the future.
Answer:
B. inspire a large number of people to help achieve organizational purposes.
Explanation:
Business strategy sets the overall direction for the business; it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan.
The recommended approach for strategy formulation by a leader is for him or her to inspire a large number of people to help achieve organizational purposes.
The article entitled "My Drug Probem" best reflects the economic idea that A. Pharmac, like private drug companies, attempt to maximaize the revenue that they receive from selling drugs. B. scarcity implies competition over resources which implies that every society has to establish rules that ration the available or potential goods and services among its citizens C. markets are always the best way to allocate resources D. government health programs, such as Pharmac, do not have to make decisions or choices regarding the availability and/or distribution of medical treartments and drugs to its citizens
Answer: C. markets are always the best way to allocate resources
Explanation:
The aforementioned article juxtaposes the benefits of having a market system for drug purchases in the United States vs other countries where healthcare is planned by the government.
It presented facts to support the logic that having a private market based system for drugs like the United States, ensures that there is incentive to produce more efficient drugs because an appropriate price can be charged for it unlike in areas where drug budgets are planned and so there might be haggling over accepting expensive drugs as was the case in New Zealand with Herceptin.
This reinforced the belief that markets are always best for resource allocation.
define investment bank.
Answer:
Investment banks are middlemen between those with money and those with ideas who need funding. They give money a productive purpose by channelling into projects.. it's a financial service of company or corporate division that engages in advisory-based financial transactions on behalf of individuals, corporations and governments
Consider an economy described by the following equations: Y = C + I + G, G = 2,000 T = 2,000 C = 250 + 0.75YD I = 750 a) Is there a government budget deficit, budget surplus, or balanced budget? A. budget deficit B. budget surplus C. balanced budget b) Calculate the equilibrium value of Y. Y = $ nothing c) What is the value of autonomous consumption (c0)? autonomous consumption = $ nothing d) What is the value of MPC? What is the value of MPS? MPC = nothing MPS = nothing e) Calculate the value of APC and the value of APS. Round your answers at 2 decimal places. APC = nothing APS = nothing f) Calculate private saving, public saving and national saving. Private Saving = $ nothing Public Saving = $ nothing National Saving = $ nothing
Answer: See explanation
Explanation:
a. This is a balanced budget. A balanced budget is when the government expenditure and the revenue generated are thesame. In this case, government expenditure (G) and revenue gotten from taxes (T) are both 2000.
b. The equilibrium value of Y will be:
Y = C + I + G
Y = 250 + 0.75(Y - 2000) + 750 + 2000
Y = 250 + 0.75Y - 1500 + 750 + 2000
Y - 0.75Y = 1500
0.25Y = 1500
Y = 1500/0.25
Y = 6,000
c. The value of the autonomous consumption (c0) will be:
c0 = 250
d. MPC = 0.75 ,
Note that MPS = 1 - MPC
= 1 - 0.75
= 0.25
e APC = C/YD
= 3250/4000
= 0.8125
APS = S/YD
= 750/4000
= 0.1875
f. Private Saving = 750
Public saving = 0
Then, the National Saving will be:
= Public savings - private savings
= 750 - 0
= 750