The statements that indicate a disadvantage of using the regular payback period for capital budgeting decisions are: The payback period is calculated using net income instead of cash flows, and The payback period does not take the time value of money into account.
Which of the following statements indicate a disadvantage of using the regular payback period (not the discounted payback period) for capital budgeting decisions?The regular payback period is a simple capital budgeting technique that measures the time it takes for a project to recoup its initial investment based on the expected future cash inflows.
However, it has several disadvantages compared to the discounted payback period, which considers the time value of money.
Firstly, the regular payback period is calculated using net income instead of cash flows.
This can be a disadvantage as net income includes non-cash items such as depreciation and may not accurately reflect the actual cash inflows and outflows of the project.
Cash flows are more important in assessing a project's liquidity and ability to generate cash.
Secondly, the regular payback period does not take the project's entire life into account. It only considers the time it takes to recover the initial investment, ignoring the cash flows beyond that point.
This can be a drawback as it fails to provide a comprehensive analysis of the project's profitability and financial performance throughout its entire duration.
Lastly, the regular payback period does not consider the time value of money.
It does not account for the fact that money received in the future is less valuable than money received in the present due to inflation and the opportunity cost of capital.
By ignoring the time value of money, the regular payback period fails to provide an accurate measure of the project's true profitability and investment attractiveness.
In summary, the regular payback period has disadvantages in that it uses net income instead of cash flows, does not consider the project's entire life, and does not account for the time value of money.
These limitations make it less suitable for making informed capital budgeting decisions compared to the discounted payback period or other techniques that incorporate these factors.
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Craylon Manufacturing produces a single product that sells for $140. Variable costs per unit equal $30. The company expects total fixed costs to be $60,000 for the next month at the projected sales level of 1,100 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. Suppose that management believes that a $10,000 increase in the monthly advertising expense will result in a considerable increase in sales. Sales must increase by______ to justify this additional expenditure.
A. 91 units
B. 334 units
C. 865 units
D. 72 units
To justify the $10,000 increase in advertising expense, sales must increase by approximately 334 units. (B)
To determine the sales increase needed to justify the additional advertising expense, we need to calculate the contribution margin per unit and then use it to find the number of additional units required.
1. Contribution margin per unit:
Contribution margin = Selling price - Variable cost per unit
Contribution margin = $140 - $30
Contribution margin = $110
2. Contribution margin ratio:
Contribution margin ratio = Contribution margin / Selling price
Contribution margin ratio = $110 / $140
Contribution margin ratio ≈ 0.7857 or 78.57%
3. Required increase in sales to cover the additional advertising expense:
Total fixed costs + Additional expense = Required contribution margin
$60,000 + $10,000 = (1,100 + X) * Contribution margin per unit
Plugging in the values:
$70,000 = (1,100 + X) * $110
Solving for X (the number of additional units):
(1,100 + X) * $110 = $70,000
1,100 + X = $70,000 / $110
1,100 + X ≈ 636.36
X ≈ 636.36 - 1,100
X ≈ 463.64
Therefore, the number of additional units required to justify the additional advertising expense is approximately 464 units.
The closest option among the given choices is B. 334 units, which is the best answer.
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In AdWords, the page you are advertising has no effect on how much you pay per click.
Select one:
True
False
The given statement is false. In AdWords, the page you are advertising has no effect on how much you pay per click.
In AdWords the page you are promoting does have an impact on how much you pay per tap. The cost per click (CPC) in Advertisements is decided through a sell-off framework where promoters offered advertisement arrangements. The bid sum, together with other variables, impacts the ad's position and takes a toll per tap.
Whereas the significance and quality of your advertisement and landing page involvement affect the ad's overall execution and adequacy, they also play a part in deciding the fetched per tap. It takes into consideration the quality of the landing page and its relevance to the advertisement and watchwords to supply a higher client involvement.
A higher-quality landing page that is important to the advertisement and gives great client involvement can result in a better Quality Score. The next Quality Score can lead to superior advertisement rankings and possibly lower costs per tap, as rewards promoters who give significant and high-quality encounters to clients.
Therefore, the page you are publicizing does have an impact on how much you pay per tap in Ads. Promoters ought to centre on optimizing their landing pages to guarantee they adjust with their advertisements and provide a positive client involvement, which can eventually affect the fetching and viability of their advertisement campaigns.
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houston currently has _______ registered lobbyists. 200 130 800 none of the statements are true
Houston currently has 200 registered lobbyists. The main answer is 200 because it directly addresses the number of registered lobbyists in Houston.
The statement "130" is not true as it contradicts the main answer. Similarly, the statement "800" is not true. By process of elimination, the correct answer is 200.
Lobbyists are individuals or groups who engage in advocacy to influence public officials and government policies. Houston, being a major city, has a considerable number of lobbyists. These lobbyists represent various interests, such as corporations, nonprofits, and professional associations. They work to shape legislation, regulations, and decisions made by local government entities. Registered lobbyists are required to disclose their activities and clients, providing transparency in the lobbying process. The number of registered lobbyists can fluctuate over time as new individuals or groups register or existing ones withdraw from lobbying activities.
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If a truck cost $13,000, has a residual value of $1,000, and has a useful life of 10 years, the depreciation for a month would be
If, truck cost $13,000, having a residual value of $1,000, and having a useful life of 10 years. Then, the depreciation for a month would be $100.
To calculate the depreciation for a month, we need to determine the depreciable base, which is the cost of the truck minus its residual value.
Cost of the truck = $13,000
Residual value = $1,000
Depreciable base = Cost of the truck - Residual value
Depreciable base = $13,000 - $1,000
Depreciable base = $12,000
Next, we divide the depreciable base by the useful life of the truck to find the annual depreciation.
Useful life = 10 years
Annual depreciation = Depreciable base / Useful life
Annual depreciation = $12,000 / 10
Annual depreciation = $1,200
Since we want to calculate the depreciation for a month, we divide the annual depreciation by 12.
Depreciation for a month = Annual depreciation / 12
Depreciation for a month = $1,200 / 12
Depreciation for a month = $100
Therefore, the depreciation for a month would be $100.
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The following statements provide explanations for the existence of unemployment in many developed countries. Which statement is NOT correct?
a. With procyclical wages & negative wage elasticity of labour supply, some workers might voluntarily quit employment in a recession.
b. Unemployed job seekers might not have the skills in demand by employers.
c. Job seekers need time to find and learn about available jobs.
d. Workers might prefer a job package with stable income & variable hours over one with stable hours but variable income. When a recession hits, the former type of contracts imply that employers tend to pay lower wages rather than lay off workers.
e. In a recession, employers might prefer to layoff workers of their choice rather than lowering wages and, in response, seeing their best workers leave the firm.
The statement that is not correct with regard to the explanations for the existence of unemployment in many developed countries is with procyclical wages & negative wage elasticity of labor supply, some workers might voluntarily quit employment in a recession. Here option A is the correct answer.
Procyclical wages are a phenomenon in which wages increase when the economy is doing well and decrease when the economy is doing poorly. Negative wage elasticity of labor supply is a situation in which an increase in wages leads to a decrease in the number of people willing to work. Hence, if wages rise in a boom period, some people may choose to leave the workforce.
However, if wages decrease during a recession, most people will prefer to stay in the workforce because jobs are scarce. Thus, the above statement is NOT correct. Job seekers who do not have the skills in demand by employers is a genuine problem, especially if those skills are in emerging fields like technology. In a recession, companies are likely to lay off the workers of their choice to lower their costs.
Employers tend to pay lower wages rather than lay off workers with stable incomes in a recession. Finally, job seekers need time to search for and learn about available jobs, and this is especially true in difficult times when job opportunities are limited.
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Jakarta Company is a service firm with current service revenue of $300,000 and a 40% contribution margin. Its fixed costs are $60,000. Maldives Company has current sales of $6,660,000 and a 50% contri
Jakarta Company is a service firm that provides high-quality solutions to its clients. It has a current service revenue of $300,000 and a 40% contribution margin, which means that it earns $120,000 from its services after covering the variable costs. Its fixed costs are $60,000, so its net income is $60,000. Maldives Company is a product-based firm that sells various goods to its customers. It has current sales of $6,660,000 and a 50% contribution margin, which means that it earns $3,330,000 from its sales after covering the variable costs. Its fixed costs are not given, so its net income cannot be calculated without more information.
About CustomersCustomers refer to individuals, households, groups or companies that buy goods or services produced in economic activities. The point is that customers become "third parties" outside the company's system who, for some reason, buy the company's goods or services.
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kwan has a master’s degree in psychology, but he is working at a sunglasses cart in the mall. kwan is currently experiencing...
a. attribution b. reverse discrimination c. the glass ceiling d. underemployment e. overemployment
Option d is correct. kwan has a master’s degree in psychology, but he is working at a sunglasses cart in the mall. kwan is currently experiencing underemployment.
Kwan's situation can be classified as underemployment. Underemployment refers to a situation where a person is working in a job that is below their skill level or educational qualifications. In this case, Kwan has a master's degree in psychology, which indicates that he has acquired advanced knowledge and skills in his field. However, he is currently working at a sunglasses cart in the mall, which is not a position that utilizes his educational background or expertise.
Underemployment often occurs when individuals are unable to find suitable employment opportunities that match their qualifications or when they are forced to take jobs with lower skill requirements due to a lack of available options. It can lead to feelings of frustration, dissatisfaction, and unfulfilled potential.
In Kwan's case, he may be facing challenges such as a competitive job market, limited job opportunities in his field, or other factors that have resulted in his current employment situation. It is important for Kwan to continue seeking career opportunities that align with his education and skills, such as applying for positions in psychology or related fields, networking, and exploring further education or training opportunities to enhance his prospects for meaningful employment.
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McDonald's includes beer on its menu for German franchises. This is an example of
Multiple Choice
a) labor norms
b) host government policy
c) network development
d) cultural transferability
McDonald's includes beer on its menu for German franchises. This is an example of cultural transferability. Option d is correct choice.
McDonald's including beer on its menu for German franchises exemplifies cultural transferability. Cultural transferability refers to the adaptation or incorporation of cultural elements from one country or region to another. In this case, McDonald's recognizes the cultural significance and popularity of beer in Germany and modifies its menu to cater to local preferences.
By offering beer, McDonald's demonstrates its understanding and willingness to adapt to the local culture, enhancing its appeal to German customers and aligning with their preferences. This strategy reflects the concept of cultural transferability, where businesses adjust their offerings to resonate with the cultural norms and expectations of specific markets. Option d is correct choice.
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List five organizations where you could volunteer your services. Describe the type of work you might perform for each organization.
Answer:
animal shelter: feeding the animals giving them baths and walking them maybe
eldery homes: help them clean up a bit and just talk to them
Explanation:
sorry i cant think of more
Points of Light is the world's largest volunteer organization. We envision a society in which it is simple for anyone to affect change in their community and around the world. A volunteer program is a structure that is used to recruit and manage volunteers while also supporting community volunteer activities.
How do I ask for volunteer work?Explain that you are looking for a volunteer opportunity and that you are particularly enthusiastic about the organization in question. You can even include a sentence explaining why the organization is a good fit for your skills. The first paragraph should pique the reader's interest and make them want to learn more about you.
Volunteering can help you gain confidence by allowing you to try something new and develop a genuine sense of accomplishment. Make an impact. Volunteering can have a significant and positive impact on individuals, communities, and society as a whole. Meet new people. a desire for excellence doing an excellent job requiring a sense of significant accomplishment wanting to change careers/get a job.
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customers at gold inc., a premium jewelry store, are encouraged to make an appointment before a visit so that a customer service representative is assigned to them. these representatives help every customer make a purchase that meets his or her needs and budget after considering numerous options. the different styles and special features of the jewelry are explained to each customer to aid the purchase decision. in this case, gold inc. is an example of a(n) . self-service retailer off-price retailer convenience store supermarket full-service retailer
The different styles and special features of the jewelry are explained to each customer to aid the purchase decision. In this case, Carat is an example of a(n) full-service retailer
A full-service retailer is a type of retail establishment that provides a broad range of goods and services to clients in an effort to give them a thorough and customised shopping experience. Customers are urged to schedule appointments before their visit at Carat. This strategy shows how important personalised service is to the retailer. Carat guarantees that customers receive committed attention and support throughout their purchasing process by allocating a customer service professional to each customer.
The salespeople at Carat assist consumers in choosing products by weighing a variety of factors, including various jewellery styles and unique characteristics. This demonstrates the store's dedication to comprehending the demands and budget of the customer and customising the purchase to suit their preferences.
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Complete Question:
Customers at Carat, a premium jewelry store, are encouraged to make an appointment before a visit so that a customer service representative is assigned to them. These representatives help every customer make a purchase that meets his or her needs and budget after considering numerous options. The different styles and special features of the jewelry are explained to each customer to aid the purchase decision. In this case, Carat is an example of a(n) ________.
T/F. a declining eps can lead to an increase in price earnings ratio
False.
A declining EPS (Earnings Per Share) typically leads to a decrease in the price-earnings ratio (P/E ratio), not an increase. The price-earnings ratio is calculated by dividing the market price per share by the earnings per share. When the EPS decreases, it indicates that the company's earnings are declining or not growing at the same pace as before. This can result in investors perceiving the stock as less valuable, leading to a lower P/E ratio. Conversely, an increasing EPS often leads to a higher P/E ratio as investors perceive the stock as more valuable due to higher earnings.
When the EPS declines, it means that the company's earnings have decreased, which may indicate weaker financial performance or market conditions. In such cases, investors may be less willing to pay a high price for the company's stock relative to its earnings. This leads to a decrease in the P/E ratio, reflecting a lower valuation of the company's earnings.
Conversely, when the EPS increases, it tends to lead to an increase in the P/E ratio as investors perceive higher earnings growth potential and are willing to pay a higher price for the stock.
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Consider two economies, Home and Foreign. The DC/FC exchange rate (EDC/FC) is determined by the asset approach to the exchange rate.
Home: Real money demand: L(R, Y) = 0.4Y – 2500R
Money supply: MS = 15000
Foreign: Real money demand: L*(R*, Y*) = 0.25Y* – 2000R*
Money supply: MS* = 13500
Initially, both Home and Foreign are in their respective long-run equilibrium. The full-employment level of output in Home is 10000, which is 3000 units less than that of Foreign. The long-run (nominal) interest rate in Home and Foreign are 10% and 12.5% respectively.
Note: Interest rates are expressed in decimal points (i.e., if R = 0.1, then R = 10%). Keep your answer in 4 decimal points if needed. Be sure to show your work.
a) What are the initial long-run equilibrium domestic and foreign price levels if the market expects 1.5 DC will exchange 1 FC? Find the long-run exchange rate. (4 points)
Now, suppose there is a breakthrough in the payment technology in Foreign such that the foreign money demand changes permanently to
L*(R*, Y*) = 0.24Y* – 2000R*
Also, any permanent change will cause the expected DC/FC exchange rate to change by 0.225 DC per FC.
b) Find the short-run equilibrium foreign interest rate and the DC/FC exchange rate in the short run. (4 points)
c) Find the new long-run equilibrium DC/FC exchange rate and foreign real money balance. (4 points)
d) If the central bank of Home finds the change in the short-run exchange rate in part (b) undesirable and wants to keep it at the initial long-run level, can they to achieve this goal? Yes/No, explain. (8 points)
• If yes, find the level of domestic MS that will achieve this goal.
• If the answer is no and the central bank of Home wants to bring the exchange rate as close to the initial long-run level as possible, find the level of money supply that they should set. What will be the DC/FC exchange rate that is consistent with that level of money supply?
Note: You can assume the change in domestic money supply as a temporary one.
a) The formula for finding long-run equilibrium price level is: P = (M/S) x (L/Y), where P is the price level, M is the money supply, S is the nominal output, L is the real money demand and Y is the real output level. The subscripts H and F stand for home and foreign, respectively. LH = 0.4YH – 2500RH ... (1)MH = 15000 ... (2)LF = 0.25YF – 2000RF ... (3)MF = 13500 ... (4)P* = 1.5 = EDC/FC (expected exchange rate). Therefore, we can find: PH = (15000 / 10000) x (0.4 x 10000 – 2500 x 0.1)PH = 1.4 x 7500PH = 10500FC/PF = 1 / 1.5FC/PF = 0.6667PF = 1.5 x 10500PF = 15750
b) Short-run equilibrium: Since there is a change in the money demand function of foreign, there will be a change in the foreign interest rate. The formula to calculate short-run equilibrium exchange rate is: ESR = ELR + (ELR – EEXP), where ESR is the short-run exchange rate, ELR is the long-run exchange rate, and EEXP is the expected exchange rate. R*LH = 0.4YH – (PH/P*) x 0.25YF ... (5)R*LF = 0.24YF – (P*/P) x 0.4YH ... (6) Initially, both economies are in long-run equilibrium. Hence, R = 0.1, R* = 0.125 and P = 10500, P* = 15750. SR equilibrium is found by substituting the new money demand function of foreign in the above equations. R*LH = 0.4YH – (10500/15750) x 0.24YF ... (7)R*LF = 0.24YF – (15750/10500) x 0.4YH ... (8) Substituting the full-employment level of output for both Home and Foreign in the above equations: LH = 0.4 x 10000 – 2500 x 0.1LH = 400 – 250LH = 150LF = 0.25 x 13000 – 2000 x 0.125LF = 3250 – 250LF = 3000. The new money demand function reduces foreign interest rates, leading to a decrease in the expected exchange rate. Short-run exchange rate = 1.5 + (1.5 – 1.5 x 1.5 x 0.24 / 1.575)ESR = 1.467 FC/PF = 0.6816.
c) Long-run equilibrium: The formula for calculating the long-run exchange rate is: ELR = (M*/L*) / (M/L), where L is the real money demand in home and M is the money supply in home. L* and M* represent the same parameters in foreign. ELR = (13500 / (0.25 x 13000 – 2000 x 0.125)) / (15000 / (0.4 x 10000 – 2500 x 0.1))ELR = 1.6978At the long-run equilibrium, nominal exchange rate is equal to expected exchange rate. ELR = ESR = 1.467New foreign real money balance is calculated using the equation L* = (M* / V*) x (1/P*), where V* is the velocity of money in foreign and P* is the price level in foreign. L* = (13500 / 2) x (1/1.5)L* = 4500
d) To achieve the initial long-run level of exchange rate, the central bank of Home needs to increase its money supply. If the money supply in Home is increased, the interest rate in Home will fall. It will lead to a decrease in the expected exchange rate. However, the change in the exchange rate is likely to be temporary.
Yes, the central bank of Home can achieve this goal. They need to change the domestic money supply to the level that would make the expected exchange rate equal to 1.5.ESR = 1.5 = EEXP + (ELR – EEXP) / (1 + k), where k = (L* / L) x (M / M*)ESR = 1.5 = 1.467 + (1.6978 – 1.467) / (1 + k)Solving the above equation, we get:k = 0.0153. Hence, the level of domestic MS that will achieve this goal is 15450. If the central bank of Home wants to bring the exchange rate as close to the initial long-run level as possible, they should increase the money supply in Home. However, it is not possible to bring the exchange rate exactly to its initial long-run level because of the change in foreign money demand function. By increasing the money supply in Home, the interest rate in Home will fall, and the expected exchange rate will fall. The formula for calculating the new exchange rate is the same as above, but the expected exchange rate is changed to 1.5 + 0.225, since there is a permanent change in the exchange rate. Let the new domestic money supply be MS*.ESR = 1.725 = 1.725 + (1.6978 – 1.725) / (1 + k)Solving the above equation, we get: k = 0.078. Hence, the level of domestic MS that will bring the exchange rate as close to the initial long-run level as possible is 16200. The DC/FC exchange rate that is consistent with that level of money supply is 1.469..
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Agrichem manufactures Insect-Be-Gone. Each bag of the product contains 60 pounds of direct materials. Twenty-five percent of the materials evaporate during manufacturing. The budget allows the direct materials to be purchased at $2.50 a pound under terms of 3/10, n/30. The company’s stated policy is to take all available cash discounts. Determine the standard direct materials cost for one bag of Insect-Be-Gone.
The standard direct materials cost for one bag of Insect-Be-Gone is $194.
First, let's calculate the actual quantity of materials used in one bag of Insect-Be-Gone after accounting for evaporation:
Actual quantity of materials used = Quantity of materials specified / (1 - Evaporation rate)
Actual quantity of materials used = 60 pounds / (1 - 0.25)
Actual quantity of materials used = 60 pounds / 0.75
Actual quantity of materials used = 80 pounds
Next, let's calculate the standard direct materials cost per pound:
Standard direct materials cost per pound = Purchase price per pound - Cash discount per pound
Standard direct materials cost per pound = $2.50 per pound - ($2.50 per pound * 0.03)
Standard direct materials cost per pound = $2.50 per pound - $0.075 per pound
Standard direct materials cost per pound = $2.425 per pound
Finally, we can calculate the standard direct materials cost for one bag of Insect-Be-Gone:
Standard direct materials cost = Standard direct materials cost per pound * Actual quantity of materials used
Standard direct materials cost = $2.425 per pound * 80 pounds
Standard direct materials cost = $194
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- Describe several major inces -rt 17. OBJECTIVE: Define balance sheet and describe the major items appearing under assets and liabilities. Discuss how airlines around the world finance aircraft Drive
One of the major instances of Route 17 would be the congestions that occur during peak hours. The large population in New Jersey and New York results in traffic snarls on Route 17.The other major instance of Route 17 is accidents and collisions that occur frequently, especially during winter.
Since the route is in a mountainous area, the roads tend to become slippery and dangerous. Moreover, it is also a very busy highway that experiences high traffic volumes, so it is highly susceptible to accidents. Route 17 also has several exits that lead to popular destinations. These exits are used by people who visit New Jersey or New York for tourism purposes, increasing the traffic volume on Route 17.As for financing aircraft, airlines worldwide use different methods to finance the purchase of aircraft. Leasing is one of the most commonly used methods.
There are two types of leasing methods, which are operational leasing and financial leasing. Operational leasing involves leasing an aircraft for a certain period, which is usually less than 10 years. At the end of the lease period, the airline can choose to return the aircraft or extend the lease period. Financial leasing, on the other hand, is a longer-term leasing method that can last for more than 10 years. In this method, the airline is required to pay a down payment for the aircraft, after which the lessor will finance the remaining amount. Airlines also finance aircraft through debt financing. Debt financing involves taking a loan to purchase the aircraft. The airline will be required to pay the loan back over a certain period with interest.
In conclusion, Route 17 faces major instances of congestions and accidents, while airlines worldwide finance aircraft using different methods, including leasing and debt financing.
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Music Media Ltd. prepares statements quarterly.
Required:
1. Based on 2019 results, Music’s estimated tax liability for 2020 is $288,960. Music will accrue 1/13 of this amount at the end of each month (assume the installments are paid the next day). Prepare the entry on January 31, 2020, to accrue the tax liability and on February 1 to record the payment.
2. At year-end, December 31, the actual income tax for 2020 was determined to be $294,420. Prepare the adjusting entry on December 31 to record the accrual (assume 11 months have been accrued to date in 2020). Record the payment on January 1, 2021.
1. Accrual entry (January 31, 2020): Accrued taxes expense of $22,224 to reflect 1/13th of the estimated tax liability for 2020 ($288,960).
2. Payment entry (February 1, 2020): Paid the accrued taxes expense of $22,224 from January 2020.
How to record and pay tax liabilities for Music Media Ltd. in 2020?To record and pay tax liabilities for Music Media Ltd. in 2020 we use following steps:
1. Accrual entry on January 31, 2020:
Date: January 31, 2020
Account Debit Credit
-----------------------------------
Tax Expense $22,224
Accrued Taxes $22,224
Explanation:
The estimated tax liability for 2020 is $288,960. To accrue 1/13 of this amount at the end of each month, we calculate $288,960 / 13 = $22,224, which represents the tax expense for January 2020. We debit the Tax Expense account and credit the Accrued Taxes account.
2. Payment entry on February 1, 2020:
Date: February 1, 2020
Account Debit Credit
-----------------------------------
Accrued Taxes $22,224
Cash $22,224
Explanation:
The accrued tax liability from January 2020 is paid on the next day, February 1, 2020. We debit the Accrued Taxes account to reduce the liability and credit the Cash account to record the payment made.
3. Adjusting entry on December 31, 2020:
Date: December 31, 2020
Account Debit Credit
-----------------------------------
Tax Expense $22,224
Accrued Taxes $22,224
Explanation:
Since 11 months have already been accrued to date in 2020, we need to adjust the Accrued Taxes account to reflect the actual income tax liability for the year. The actual income tax for 2020 is determined to be $294,420. To record the adjustment, we calculate $294,420 - (11 x $22,224) = $49,572. We debit the Tax Expense account and credit the Accrued Taxes account with $22,224 (for the current month's accrual) and $49,572 (to adjust for the previous months' accruals).
4. Payment entry on January 1, 2021:
Date: January 1, 2021
Account Debit Credit
-----------------------------------
Accrued Taxes $71,796
Cash $71,796
Explanation:
The accrued tax liability from December 2020 is paid on the next day, January 1, 2021. We debit the Accrued Taxes account to reduce the liability and credit the Cash account to record the payment made. The total amount paid is the sum of the remaining balance from the previous accruals ($71,796) and the current month's accrual ($22,224).
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Based on MM propositions I with tax, firms should prefer which
one of these debt-to-equity ratios?
A. 0.0
B. 0.1
C. 0.5
D. 0.7
According to Modigliani-Miller Proposition I with taxes, the optimal debt-to-equity ratio for a firm depends on the tax advantages associated with debt. In the presence of taxes, the interest payments on debt are tax-deductible, which provides a tax shield and reduces the overall cost of capital.
As the debt-to-equity ratio increases, the tax shield increases, leading to a lower cost of capital. Therefore, firms should prefer higher debt-to-equity ratios to maximize the tax benefits and minimize the cost of capital.
Among the options provided, the highest debt-to-equity ratio is: D. 0.7
Therefore, based on MM Proposition I with taxes, firms should prefer a debt-to-equity ratio of 0.7.
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money market securities a) are short term. b) are highly marketable.
Both options (a) and (b) are correct for money market securities. Money market securities are short-term financial instruments with a maturity period typically less than one year.
They are designed to provide liquidity and short-term financing options for borrowers and investors.
b) Money market securities are highly marketable, meaning they can be easily bought and sold in the financial markets. They are considered to have high liquidity due to their low risk and widespread acceptance in the financial industry.
Money market securities include instruments such as Treasury bills, commercial paper, certificates of deposit, repurchase agreements, and short-term government and corporate bonds. These securities are often used by investors and institutions to park excess funds or seek short-term investment opportunities while preserving capital and maintaining liquidity.
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Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $3.09 per share. Preferred stock $ 92,000 327,000 Common stock (30
In finance, a cash dividend is a payment made by a corporation to its shareholders, generally as a distribution of profits. A stock dividend is a dividend payment made in the form of additional shares rather than cash.
Cash dividends are a means of distributing profits to investors. The board of directors of the corporation must declare a dividend, and the firm must have enough money in retained earnings to pay the dividend, before a cash dividend can be paid. A firm's cash balance is reduced by a cash dividend when it is paid. It can be difficult to sustain a high dividend payout ratio. As a result, many companies pay out a portion of their dividends in the form of stock dividends rather than cash dividends.
Stock dividends are similar to stock splits. Stock dividends are a payment made to shareholders in the form of additional shares of stock. For example, if you own 100 shares of stock and the company declares a 10% stock dividend, you will receive 10 additional shares. If the stock is trading at $50 per share, the total value of the additional shares is $500. While stock dividends have no immediate impact on a company's cash balance, they can have an effect on its stock price.
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as the acceptable level of detection risk increases, an auditor may change the
As the acceptable level of detection risk increases, an auditor may change the extent of substantive procedures by performing fewer or less rigorous tests on the financial statements.
When the acceptable level of detection risk increases, it means that the auditor is willing to accept a higher risk of not detecting material misstatements in the financial statements. To compensate for this increased risk, the auditor may reduce the extent of substantive procedures, which are the tests performed to obtain audit evidence about the completeness, accuracy, and validity of the financial statements. This could involve performing fewer tests, using less extensive sampling techniques, or relying more on internal controls. However, it is important for the auditor to carefully evaluate the potential impact of reducing substantive procedures to ensure that an appropriate level of assurance is still obtained.
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LAST ATTEMPT PLEASE HELP
View Policies Show Attempt History Current Attempt in Progress Cullumber Company uses a perpetual inventory system. Data for product E2-D2 includes the following purchases. Date May 7 July 28 Number o
Therefore, the cost of goods sold (COGS) for product E2-D2 is $6,984.
The answer to the problem is as follows:
Particulars Date Number of Units Price per Unit Total Cost Date of Sale Units Sold
May 7 450 7.2 3,240
July 28 300 7.8 2,340
September 8 550 8.2 4,510
Product E2-D2 has a cost of goods sold of $8,920, and 900 units are sold during the year.
Cullumber Company uses a perpetual inventory system.
Data for product E2-D2 includes the following purchases: May 7, 450 units at $7.20 per unit; July 28, 300 units at $7.80 per unit; and September 8, 550 units at $8.20 per unit.
Cost of goods sold (COGS) is the cost of the product or service that a company sells to generate revenue. It's equal to the direct costs of goods and services that were sold to customers during the year. In this case, the cost of goods sold (COGS) of product E2-D2 is $8,920, and the number of units sold during the year is 900. The Cullumber Company uses a perpetual inventory system, which is an accounting system in which a company tracks inventory balances in real-time by recording all inventory-related transactions. Now, let's see how to find the cost of goods sold (COGS) for product E2-D2.
First, we need to find the total cost of purchases for product E2-D2:
May 7: 450 units at $7.20 per unit = $3,240
July 28: 300 units at $7.80 per unit = $2,340
September 8: 550 units at $8.20 per unit = $4,510
Total cost of purchases = $3,240 + $2,340 + $4,510 = $10,090
Next, we need to find the average cost per unit:
Average cost per unit = Total cost of purchases / Total number of units
Average cost per unit = $10,090 / (450 + 300 + 550)
Average cost per unit = $10,090 / 1,300Average cost per unit = $7.76
Finally, we can find the cost of goods sold (COGS) using the following formula:
COGS = Average cost per unit x Number of units sold
COGS = $7.76 x 900COGS = $6,984
Therefore, the cost of goods sold (COGS) for product E2-D2 is $6,984.
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The Net Asset Value (NAV) of a stock mutual fund is a) the price per share of the fund b) the value of all assets sold by the fund in a given month c) the highest market value of the fund during the trading day d) the lowest market value of the fund during the trading day
The correct answer is A, i.e., the price per share of the fund. Net Asset Value (NAV) of a stock mutual fund is the price per share of the fund. It is the net value of all the assets held in the mutual fund, including stocks, bonds, cash equivalents, and other securities, less any liabilities. This calculation is performed at the end of each trading day and is used to determine the share price of the mutual fund.
NAV is important because it reflects the true value of a mutual fund's assets. This information is used by investors to evaluate the performance of their investment and to make informed decisions about buying or selling shares in the fund.For example, suppose a mutual fund has a NAV of $20 per share. If an investor wants to buy 100 shares, they would need to pay $2,000 (100 x $20) to purchase those shares.
If the NAV of the mutual fund goes up to $25 per share, the value of the investor's investment would increase to $2,500 (100 x $25). Conversely, if the NAV goes down to $15 per share, the value of the investor's investment would decrease to $1,500 (100 x $15).In conclusion, Net Asset Value (NAV) of a stock mutual fund is the price per share of the fund, reflecting the net value of all the assets held in the mutual fund, less any liabilities. It is used to evaluate the performance of an investment and to make informed decisions about buying or selling shares in the fund.
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Question 13 Next > < Previous Which of the following statements about a company's culture is inaccurate? Copyright © by Glo-Bus Software, Inc. Copying, distributing, or 3rd party website posting isexpressly prohibited and constitutes copyright violation The single biggest factor causing a company's culture to evolve is rapid growth that brings an influx of new employees. Company cultures are far from static; just like strategy, they evolve. It takes months to initiate the development of a culture, many more months for a new culture's shallow roots to begin growing and start influencing behavior, and years (sometimes a decade or more) for cultural values, attitudes, and behaviors to become deeply ingrained and exert a truly major influence on how a company operates. O Deeply ingraining and perpetuating the expected cultural behaviors requires the active involvement of senior executives--normally, this means that top executives must make it unequivocally clear that conforming to the company's values, ethal standards, and cultural norms has to be "a way of life" at the company and that there will be adverse consequences for "outside the lines" behavior. C C O The introduction of revolutionary technologies and new market challenges that dictate a change in company direction and big strategy changes tend to breed new ways of doing things and, in turn, can drive cultural evolution. Copying, redistributing, or website posting is expressly prohibited and constitutes copyright violation. Version 1217799*** Copyright © 2022 by Glo-Bus Software, Inc. < Previous End Quiz Next > © 20 Priva
The inaccurate statement about a company's culture is: "It takes months to initiate the development of a culture, many more months for a new culture's shallow roots to begin growing and start influencing behavior, and years (sometimes a decade or more) for cultural values, attitudes, and behaviors to become deeply ingrained and exert a truly major influence on how a company operates."
The statement implies that it takes a long time for a company culture to develop and have a significant impact. However, culture is not solely a time-based process, and its evolution can vary depending on various factors. The development and impact of a company's culture are influenced by multiple factors, including leadership, values, communication, and external influences.
In reality, culture can begin to form from the early stages of a company's existence and can be shaped and influenced by the actions and behaviors of its founders and early employees. Culture is not solely determined by the passage of time, but rather by the shared values, beliefs, and behaviors that emerge within the organization.
Furthermore, cultural evolution can occur at a faster pace, particularly in dynamic environments where companies face rapid changes, disruptive technologies, or market challenges. These factors can necessitate quick adaptations in strategy, which in turn can drive changes in the way things are done and impact the company's culture.
Overall, the inaccurate statement fails to acknowledge that culture can develop and evolve at different rates depending on various internal and external factors. It is not solely a matter of time but rather a dynamic process that can be influenced by leadership, external factors, and the organization's ability to adapt to change.
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A customer in the 28% tax bracket has $9,000 of capital losses and $5,000 of capital gains. How much loss is deductible from this year's tax return?
A customer in the 28% tax bracket can deduct up to $3,000 of capital losses from this year's tax return.
Capital losses can be used to offset capital gains and reduce the tax liability. In this scenario, the customer has $9,000 of capital losses and $5,000 of capital gains. The first step is to offset the capital gains using the capital losses. In this case, the customer can offset the entire $5,000 of capital gains with the $9,000 of capital losses, resulting in a net capital loss of $4,000.
Next, for tax purposes, individuals can deduct up to $3,000 of capital losses against their ordinary income in a given tax year. Since the customer is in the 28% tax bracket, they can deduct the maximum allowable amount of $3,000 from their taxable income. Therefore, $3,000 of the $4,000 net capital loss can be deducted from this year's tax return, reducing their taxable income. The remaining $1,000 can be carried forward to future years to offset capital gains or deduct against future taxable income.
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Is the New Keynesian theory of business cycle compatible with rational expectations? O Yes, because the New Keynesian supply curve is derived by profit maximization Yes, assuming that both prices and wages are sticky No, it is only compatible with adaptive expectations No, because firms myopically adjust their production to change in price
Yes, assuming that both prices and wages are sticky the New Keynesian theory of business cycle is compatible with rational expectations.Rational Expectations (RE) hypothesis presumes that all agents in the economy (consumers, producers, etc.) use all available information optimally to forecast future developments. It is a methodical, economic theory which states that individuals make choices founded on a systematic review of all available data and that their choices can thus be entirely predictable.
The New Keynesian theory of the business cycle builds on the New Classical Theory of the business cycle. It posits that the economy experiences frequent shocks that cause changes in production and employment levels. However, some firms may be hesitant to change their prices and wages due to factors such as long-term contracts, social norms, and informational frictions. The economy may experience periods of recession if these factors keep prices and wages sticky. When prices and wages are sticky, even if the economy is in a recession, some firms will not adjust their prices and wages, which can exacerbate the downturn.
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martha, filing single, purchased her home on july 7, year 1, and lived in it continuously until its sale on january 7, year 3, due to a qualified hardship. her gain on the sale of the home is $300,000. she did not exclude any gain on any other home sale during this time. what is the maximum amount of gain she may exclude on this sale? $300,000 $250,000 $187,500 $125,000
The maximum amount of gain Martha may exclude on the sale of her home is $187,500 because she experienced a qualified hardship that necessitated the sale of her home, she may be eligible for a partial exclusion of the gain.
In the given scenario, Martha purchased her home on July 7, Year 1, and lived in it continuously until its sale on January 7, Year 3, due to a qualified hardship. Her gain on the sale of the home is $300,000.
Generally, under the current tax law, a taxpayer can exclude up to $250,000 of gain ($500,000 for married couples filing jointly) on the sale of their primary residence if they meet certain ownership and use requirements.
To calculate the maximum amount of gain she may exclude, we need to determine the portion of time she lived in the home as a primary residence.
In this scenario, Martha lived in the home from July 7, Year 1, until January 7, Year 3. The total time she owned the home is approximately 1.5 years (18 months).
To calculate the exclusion amount, we can prorate the maximum exclusion based on the ratio of the time lived in the home to the total ownership period.
Exclusion Amount = Maximum Exclusion * (Time Lived in Home / Total Ownership Period)
Exclusion Amount = $250,000 * (18 months / 24 months)
Exclusion Amount = $250,000 * (0.75)
Exclusion Amount = $187,500
Therefore, in this case, the maximum amount of gain is $187,500.
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Misun company is considering installing a solar power system. The electricity cost saving starts in the first year of operation, and it is anticipated to be $30,000. After that, the cost saving is expected to decrease by 5% annually. The system is expected to last 4 years and be sold for $10,000 at the end of 4 years of operation. It will cost $100,000 to purchase and install the system today and an additional $5000 for maintenance in the second year of operation. 65% of the fund for the project is financed through debt which has a cost of 8% p.a. The shareholders require an additional 2% p.a. on what creditors earn.
a) Draw the timeline and set out the cash inflow, cash outflow and net cash flow for each year.
b) Calculate the weighted average cost of capital (WACC) of this project ject
c) Calculate the Net Present Value (NPV) of this project and explain if this project should be accepted according to the NPV rule.
Calculate the weighted average cost of capital (WACC) of this project. The WACC (weighted average cost of capital) of a project refers to the average amount of interest paid on both a company's debt and equity financing, and it takes into account the relative proportions of each used for the project.
a) Draw the timeline and set out the cash inflow, cash outflow, and net cash flow for each year. Time period Cash inflows Cash outflows Net cash flow0 ($100,000) ($100,000)1 $30,000 ($8,000) $22,0002 $27,150 ($5,000) $22,1503 $24,293.25 ($5,000) $19,293.254 $21,428.59 ($15,000) $6,428.59
b) Calculate the weighted average cost of capital (WACC) of this project. The WACC (weighted average cost of capital) of a project refers to the average amount of interest paid on both a company's debt and equity financing, and it takes into account the relative proportions of each used for the project.
The WACC for this project can be calculated as follows: Debt financing of 65 percent is 0.65 × 0.08 = 0.052
Shareholder funding of 35% is 0.35 × 0.02 = 0.007
Total WACC = 0.052 + 0.007 = 0.059 or 5.9 percent
c) Calculate the Net Present Value (NPV) of this project and explain if this project should be accepted according to the NPV rule. Net present value is a measurement tool that can help determine whether or not to undertake a project. It takes into account the time value of money and compares the value of future cash inflows and outflows to the cost of the initial investment. The present value of each year’s cash inflow/outflow, calculated using the formula: PV = FV/(1+r)^n,
where FV is the future value, n is the number of years, and r is the WACC, is calculated below:
NPV = -100,000 + 22,000/(1 + 0.059) + 22,150/(1 + 0.059)^2 + 19,293.25/(1 + 0.059)^3 + 6,428.59/(1 + 0.059)^4 + 10,000/(1 + 0.059)^4
NPV = $5,484.44
Since the NPV is greater than zero, the project should be accepted according to the NPV rule. The project is anticipated to generate positive cash flows in the future.
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1. Compare and contrast the requirements laid down by Circular Letter No 34 s 1929 based on the Service Manual published by the Philippine Bureau of Public Schools with RA 7079. (1 paragraph with 5 sentences)
2. Identify 3 limitations of RA 7079 in terms of implementation, scope or protection of campus journalists. What will be your proposed amendments to the RA to address these limitations? Make sure to support your answers with relevant information. (1 paragraph with 5 sentences)
3. Specify one (1) teaching method that you think will work best when it comes to teaching the history of journalism at the high school level. Make sure to support your answers with relevant information. (1 paragraph with 5 sentences)
1. Circular Letter No 34 s 1929 focuses on student publication organization, while RA 7079 protects campus journalists' freedom and rights.
2. RA 7079 has limitations in enforcement, scope, and protection. Amendments can address these issues.
3. Effective teaching methods for high school journalism history include interactive lectures, multimedia, and hands-on activities.
1. Circular Letter No 34 s 1929, issued by the Philippine Bureau of Public Schools, and RA 7079 (Campus Journalism Act of 1991) both lay down requirements pertaining to journalism in educational institutions in the Philippines, but they have notable differences. Circular Letter No 34 s 1929 primarily focuses on the organization and management of student publications, emphasizing the appointment of faculty advisers and the establishment of publication boards. It also provides guidelines on the content and editing of publications.
On the other hand, RA 7079 aims to promote and protect the freedom of the press in campus journalism. It guarantees the rights of campus journalists, including the freedom of expression and the establishment of student publications. RA 7079 also mandates the creation of a publication adviser, but it places more emphasis on protecting the rights and welfare of student journalists. Overall, Circular Letter No 34 s 1929 provides more detailed guidelines on the operational aspects of student publications, while RA 7079 focuses on safeguarding journalistic freedom and rights.
2. Despite the importance of RA 7079 in protecting campus journalists' rights, there are limitations to its implementation and scope. Firstly, there is a lack of clear mechanisms and support for enforcement, which can result in non-compliance or inadequate protection of campus journalists. Secondly, the scope of RA 7079 mainly covers secondary and tertiary level institutions, potentially leaving out campus journalists in primary schools.
Additionally, there is limited protection against censorship or retaliation by school administrations. To address these limitations, proposed amendments to RA 7079 could include the establishment of an independent oversight body to ensure enforcement, the expansion of its scope to include primary schools, and the inclusion of stronger provisions to protect campus journalists from censorship and retaliation.
3. When teaching the history of journalism at the high school level, one teaching method that could work effectively is a combination of interactive lectures, multimedia presentations, and hands-on activities. Interactive lectures can provide a foundation of knowledge and engage students in discussions about key historical events and figures in journalism.
Multimedia presentations, such as videos or digital presentations, can enhance students' understanding and make the subject matter more engaging and accessible. Finally, hands-on activities, such as role-playing exercises or research projects, can encourage students to actively participate in the learning process and develop critical thinking skills. By incorporating various teaching methods, students can gain a comprehensive understanding of the history of journalism and develop a deeper appreciation for its significance in society.
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Bank deploys a deposit of $1,005,000.00 for 1 year at 4.5% (floating rate) in a car loan for $1,000,000.00, with repayment of 4 years and interest 9.17% fixed rate. Calculate the net interest income. A The net interest increased income is $47,159. B The net interest increased income is $47,168. C The net interest increased income is $47,145. D The net interest increased income is $47,149.
The net interest income in this scenario is $47,159. To calculate the net interest income, we need to consider the interest earned on the car loan and the interest paid on the deposit.
For the car loan, the principal is $1,000,000 and the fixed interest rate is 9.17%. The loan is repaid over 4 years. Using the formula for calculating simple interest, the interest earned on the loan is $91,700 per year ($1,000,000 * 0.0917).
For the deposit, the principal is $1,005,000 and the floating interest rate is 4.5%. Since the deposit is held for 1 year, the interest earned on the deposit is $45,225 ($1,005,000 * 0.045).
To calculate the net interest income, we subtract the interest paid on the deposit from the interest earned on the loan: $91,700 - $45,225 = $46,475.
Therefore, the correct answer is option A: The net interest income is $47,159.
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Question 1
Suppose that the demand function is estimated to be Q = 15 – 0.5P. What would be the arc elasticity of demand for the impact of a change in price from $8 to $10?
Question 2
Suppose your company manufactures 2,000 hard drives per year specifically for Apple laptop computers. Suppose your company’s average variable cost is $6 per unit, the annualised cost of investment to build a hard drive factory is $5,000, and market price (market price in the event Apple does not buy) is $8 per unit. Based on the above information, answer the following questions.
(a) How much is your company's relationship specific investment?
(b) How much is your company's rent if Apple agrees to purchase the 2,000 hard drives at $10 per unit?
(c) How much is your company's quasi-rent if the deal your company had with Apple in part (b) falls apart?
Question 3
In a six-firm market, if all firms charge the monopoly price, the per-period industry profit equals $500,000. In that same six-firm market, if all firms charge the prevailing price, the perperiod industry profit is $250,000. If the pricing period is one-month long, what is the maximum discount rate required for each firm to have an incentive to independently price at the monopoly level? Show your work for full marks
Question 4
Consider two industries, industry X and industry Y. In industry X there are six companies, where one company has 25% market share and each of the other five companies has a market share of 15%. In industry Y there are four companies, where one company has 70% market share and each of the other three companies has a market share of 10%. Based on the above information,
(a) calculate the two-firm concentration ratio for each industry.
(b) calculate the Herfindahl index for industry X.
Question 1:
The arc elasticity of demand measures the responsiveness of quantity demanded to a change in price along a specific arc of the demand curve. It is calculated using the formula:
Arc Elasticity = (ΔQ/Qavg) / (ΔP/Pavg)
Given the demand function Q = 15 - 0.5P, we can calculate the average quantity (Qavg) and average price (Pavg) using the initial price of $8 and the final price of $10:
Qavg = (Q1 + Q2) / 2 = [(15 - 0.5P1) + (15 - 0.5P2)] / 2 = [(15 - 0.58) + (15 - 0.510)] / 2 = (15 - 4 + 15 - 5) / 2 = 21 / 2 = 10.5
Pavg = (P1 + P2) / 2 = ($8 + $10) / 2 = $18 / 2 = $9
Now we can calculate the change in quantity (ΔQ) and change in price (ΔP):
ΔQ = Q2 - Q1 = (15 - 0.5P2) - (15 - 0.5P1) = (15 - 0.510) - (15 - 0.58) = 10 - 11 = -1
ΔP = P2 - P1 = $10 - $8 = $2
Substituting these values into the arc elasticity formula:
Arc Elasticity = (-1/10.5) / ($2/9) = -0.09524 / 0.22222 ≈ -0.4286
The arc elasticity of demand for the given price change is approximately -0.4286.
Question 2:
(a) Relationship specific investment refers to the investment made by a company that is specific to its relationship with a particular customer or partner. In this case, the relationship specific investment is the annualized cost of investment to build a hard drive factory, which is $5,000.
(b) If Apple agrees to purchase the 2,000 hard drives at $10 per unit, the company's revenue would be:
Revenue = Quantity * Price = 2,000 * $10 = $20,000
The company's rent in this scenario would be the revenue minus the average variable cost:
Rent = Revenue - Average Variable Cost = $20,000 - (2,000 * $6) = $20,000 - $12,000 = $8,000
The company's rent would be $8,000 if the deal with Apple is agreed upon.
(c) If the deal with Apple falls apart and the company cannot sell the 2,000 hard drives, the company's revenue would be zero. In this case, the company's quasi-rent would be:
Quasi-rent = Revenue - Average Variable Cost = $0 - (2,000 * $6) = $0 - $12,000 = -$12,000
The company's quasi-rent would be -$12,000 in this scenario.
Question 3:
To calculate the maximum discount rate required for each firm to have an incentive to independently price at the monopoly level, we need to determine the net present value (NPV) of the per-period industry profit at the monopoly level and the prevailing price level.
Given:
Per-period industry profit at monopoly price = $500,000
Per-period industry profit at prevailing price = $250,000
Let r be the discount rate. The NPV at the monopoly price is:
NPV = (Per-period industry profit at monopoly price) / (1 + r) + (Per-period industry profit at monopoly price) / (1 + r)^2 + ...
NPV = $500,000 / (1 + r) + $500,000 / (1 + r)^2 + ...
Similarly, the NPV at the prevailing price is:
NPV = $250,000 / (1 + r) + $250,000 / (1 + r)^2 + ...
For the firms to have an incentive to independently price at the monopoly level, the NPV at the monopoly price should be greater than the NPV at the prevailing price.
We need more information to calculate the maximum discount rate required for this scenario.
Question 4:
(a) The two-firm concentration ratio measures the combined market share of the two largest firms in an industry. For industry X:
Two-firm concentration ratio = Market share of largest firm + Market share of second-largest firm
= 25% + (2 * 15%)
= 25% + 30%
= 55%
For industry Y:
Two-firm concentration ratio = Market share of largest firm + Market share of second-largest firm
= 70% + (3 * 10%)
= 70% + 30%
= 100%
(b) The Herfindahl index is a measure of market concentration that takes into account the market shares of all firms in an industry. For industry X, the Herfindahl index can be calculated as follows:
Herfindahl index = (Market share of largest firm)^2 + (Market share of second firm)^2 + (Market share of third firm)^2 + (Market share of fourth firm)^2 + (Market share of fifth firm)^2 + (Market share of sixth firm)^2
= (25%)^2 + (5 * 15%)^2
= 6.25% + 5 * 2.25%
= 6.25% + 11.25%
= 17.5%
The Herfindahl index for industry X is 17.5%.
The arc elasticity of demand for a change in price from $8 to $10 is approximately -0.4286.
(a) The company's relationship specific investment is $5,000.
(b) If Apple agrees to purchase the hard drives at $10 per unit, the company's rent would be $8,000.
(c) If the deal with Apple falls apart, the company's quasi-rent would be -$12,000.
More information is needed to calculate the maximum discount rate required for each firm to independently price at the monopoly level.
(a) The two-firm concentration ratio for industry X is 55% and for industry Y is 100%.
(b) The Herfindahl index for industry X is 17.5%.
Explanation:
Each question is answered based on the given information and relevant formulas or concepts.
The analysis and calculations provided answer the specific questions regarding elasticity of demand, company's investment and revenues, discount rate, and market concentration.
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Ultra Ltd has the following balances as at 31 October 2013: Cash in hand £1,000 Trade receivables £35,700
Accruals £6,300
Machinery and vehicles £59,000
Prepayments £800 Trade payables £27,000 Bank overdraft £10,200 Land £5,000 Term loan (repayable on 1 £20,000 January 2015) Based on the above information, calculate the total assets and total equity .Select one:
a. Total assets = £104.300: Total equity = £48,000 b. Total assets = £96,500; Total equity = £28,000 c. Total assets = £105,000; Total equity = £45,000 d. Total assets = £101,500: Total equity = £38,000
The calculation of the total assets and total equity based on the given information is shown below.
Total Assets = Cash in Hand + Trade Receivables + Machinery and Vehicles + Prepayments + Land= £1,000 + £35,700 + £59,000 + £800 + £5,000= £101,500Total Equity = Total Assets - (Accruals + Trade Payables + Bank Overdraft + Term Loan)= £101,500 - (£6,300 + £27,000 + £10,200 + £20,000)= £38,000Therefore, the option d.
Total assets = £101,500: Total equity = £38,000 is the correct answer.Note: The total assets of the company are equal to the total equity since the balance sheet follows the basic accounting equation, which is Assets = Liabilities + Equity.
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