Answer:
$5749.02
Explanation:
The first step is to determine the future value of my sister's deposit
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
5500 (1.088)^6 = $9122.97
the second step is to determine the present value of $9122.97 using an interest rate of 8%
$9122.97 / (1.08)^6 = $5749.02
8. Why is the failure of a large bank more detrimental to the economy than the failure of a large steel manufacturer?
Answer:
Following are the responses to the given question:
Explanation:
Banks are just an integral aspect of an economy's flow of money. When a big steel factory fails, jobs and GDP will be lost, yet financing inside the economy would not be available because of the main banking collapse in decrease its availability of credit throughout the industry, a large bank is unable to do even more damage to the economy than a huge metal fabricator.
Explain the 5 marketing objectives?
Answer:
creation of demand
customer satisfaction
market share
generation for profits
public image
Assume the following data for Cable Corporation and Multi-Media Inc.
Cable Corporation Multi-Media Inc.
Net income $31,200 $140,000
Sales 317,000 2,700,000
Total assets 402,000 965,000
Total debt 163,000 542,000
Stockholders'
equity 239,000 423,000
a1. Compute return on stockholders’ equity for both firms.
a-2. Which firm has the higher return?
A. Multi-Media Inc.
B. Cable Corporation
b. Compute the following additional ratios for both firms.
Answer:
a-1 Cable Corporation 13.05
Multi-media Inc. 33.1%
a-2 Multi-Media Inc.
2. Cable Corporation Multi-Media Inc.
Net income/Sales 9.84% 5.19%
Net income/Total assets 7.76% 14.51%
Sales/Total assets .79 times 2.80 times
Debt/Total assets 40.55% 56.17%
Explanation:
a-1. Computation to determine the return on stockholders’ equity for both firms.
CABLE CORPORATION
Using this formula
Return on Stockholders’ Equity= Net Income / Stockholder’s equity
Let plug in the formula
Return on Stockholders’ Equity=$31,200 / 239,000
Return on Stockholders’ Equity= 0.1305*100
Return on Stockholders’ Equity=13.05%
MULTI-MEDIA INC.
Return on Stockholders’ Equity=$140,000 / 423,000
Return on Stockholders’ Equity= 33.1%
a-2. Based on the above calculation the firm that has the higher return is MULTI-MEDIA INC.
b. Computation for the following additional ratios for both firms.
Cable Corporation Multi-Media Inc.
Net income/Sales 9.84% 5.19%
($31,200/317,000=9.84%)
($140,000/2,700,000=5.19%)
Net income/Total assets 7.76% 14.51%
($31,200/402,000=7.76%)
($140,000/965,000=14.51%)
Sales/Total assets .79 times 2.80 times
(317,000/402,000=.79 times
(2,700,000/965,000=2.80 times)
Debt/Total assets 40.55% 56.17%
(163,000/402,000=40.55%)
( 542,000/965,000=56.17%)
A firm that purchases electricity from the local utility for $300,000 per year is considering installing a steam generator at a cost of $260,000. The cost of operating this generator would be $210,000 per year, and the generator will last for five years. If the firm buys the generator, it does not need to purchase any electricity from the local utility. The cost of capital is 11%. For the local utility option, consider five years of electricity purchases. For the generator option, assume immediate installation, with purchase and operating costs in the current year and operating costs continuing for the next four years. Assume payments under both options at the start of each year (i.e., immediate, one year from now,..., four years from now). What is the net present value of the more attractive choice?
Answer:
The net present value of the more attractive choice is:
= $1,108,800 (paying for local utility)
Explanation:
a) Data and Calculations:
Project period = 5 years
Cost of capital = 11%
Local Utility Steam Generator
Operating cost per year $300,000 $210,000
Cost of steam generator $260,000
PV (annuity factor
at 11% for 5 years) 3.696
PV (annuity factor
at 11% for 4 years) 3.102
Present value $1,108,800 ($300,000 * 3.696)
Present value of steam generator/
operating cost for the 1st year $470,000
Present value of operating cost for 4 years 651,420 ($210,000 * 3.102)
Net present value $1,108,800 $1,121,420
Paying for the local utility is more attractive with a net present value savings of $12,620 ($1,121,420 - $1,108,800)
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are:
Answer:
46,500 yards
Explanation:
Calculation to determine the Total needs of Material A for the month of May
Using this formula
Total needs =Production requirement+Desired ending Inventory
Let plug in the formula
Total needs=12,600*3+($14,500*20%*3)
Total needs=37,800+8,700
Total needs=46,500 yards
Therefore the Total needs of Material A for the month of May is 46,500 yards.
Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 36.0%, and the current dividend yield is 8.00%. Its beta is 1.32, the market risk premium is 14.00%, and the risk-free rate is 2.80%.
Required:
a. Use the CAPM to estimate the firm’s cost of equity. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. Now use the constant growth model to estimate the cost of equity. (Do not round intermediate calculations. Enter your answer as a whole percent.)
c. Which of the two estimates is more reasonable?
Answer:
a. Calculation of the firm's cost of equity using CAPM
Required rate of return (Cost of equity) = Risk free rate + Beta*Market risk premium
Cost of equity = 2.80% + 1.32*14%
Cost of equity = 2.80% + 18.38%
Cost of equity = 21.28%
b) Calculation of the cost of equity using constant growth model:
Cost of equity = Dividend yield + Growth rate(Capital gain yield)
Cost of equity = 8.00% + 36.00%
Cost of equity = 44.00%
When writing goals, it is helpful to remember the acronym SMART. Different people associate different words with each of the letters in the SMART acronym, but for the purposes of this problem, SMART means that effective goals are:
1. Specific. A good goal defines exactly what you expect to accomplish. When your goals are specific, the behaviors required to accomplish them are clear. Many people say that they want to recycle to save the environment, but a better goal would be "Place every used bottle or can in a recycling container within five minutes of finishing its contents."
2. Measurable. You can measure the outcomes of a good goal. When you measure how much of a goal you have attained, you get feedback on your work. For example, compare the goal "I want to be skinny" with "I want to lose 10 pounds by the end of the month." How can you measure skinny? But by measuring the pounds you have lost so far, you know exactly how close you are to meeting your goal.
3. Attainable. Good goals are hard to reach, but not impossible. If a goal is too easy, you will not have to work hard to attain it, and your overall performance will not improve. If a goal is too hard, you will be discouraged from attempting to reach it. One way of making sure that goals are attainable is to break larger, difficult goals into smaller, more easily accomplished subgoals.
4. Result-oriented. A good goal contains only one outcome or accomplishment. If you combine two or more outcomes in one goal, it will be difficult to decide where to focus your attention. For example, "To increase produce sales by 3% and to achieve a 5% market share" is a less effective goal than "To increase produce sales by 3%."
5. Time-bound. Good goals specify precisely when you will meet them. Doing so provides you with a deadline for your actions. For example, it is easy to say "I want to be a millionaire." but you are more likely to accomplish that goal if you say "I will have a million dollars in a bank account by January 1, 2020."
Using your knowledge of SMART goals, select the best goal. After the new product is released, I will hire some new salespeople.
a. I will hire three new salespeople prior to our next product release.
b. I will hire three new salespeople soon.
c. I will hire some salespeople to help with the new product release.
Answer:
a. I will hire three new salespeople prior to our next product release.
Explanation:
Smart goals are specific, measurable, attainable, result oriented and time bound. When a new product is released, new sales person will help boost sales of the product. The sales person will inform customers about the new product features and specifications. The customers will be able to choose the product based on their preference.
Outsourcing to provide extra workers during periods of peak workloads can be much more economical than trying to fill entire projects with internal resources. Which advantages does this characteristic of outsourcing provide organizations?
A) offers control over all aspects of projects that suppliers carry out
B) provides flexibility
C) shifts accountability from external suppliers to internal staff
D) helps avoid any form of dependency on suppliers
Answer:
B
Explanation:
Assign each of the following to a category of GDP. Assume products are made domestically unless indicated otherwise:
You buy a carmultiple:____.
1. Consumption
2. Investment
3. Govt. Purchases
4. Imports or Exports
A bakery buys a new:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
You get a haircut:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
Your town buys a fire truck:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
You buy shoes made in Thailand:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
The Federal Government builds a bridge:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
A private hospital buys a new MRI machine:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
You stay in a hotel in Italy:_____.
A. Consumption
B. Investment
C. Govt. Purchases
D. Imports or Exports
Answer:
*Buy Car = Consumption
*A bakery buys a new = Investment
*You get a haircut = Consumption
*Fire truck = Govt. purchase
*Buy shoes made in Thailand = Import or export
*Government build bridge = Govt. purchase
*Buy new MRI machine = Investment
*Stay in hotel in Italy = Import or Export
Explanation:
The component of GDP is Consumption, Investment, Government Expenditure, and import-export. Here, consumption is denoted by C, Investment is denoted by I, Government expenditure is denoted by G and Import-export is denoted by NX. Since the car bought for use that means the person is consuming it. While the haircut includes the consumption of service and buying a new bakery is an investment. Similarly below is the list for which the following product belongs.
*Buy Car = Consumption
*A bakery buys a new = Investment
*You get a haircut = Consumption
*Fire truck = Govt. purchase
*Buy shoes made in Thailand = Import or export
*Government build bridge = Govt. purchase
*Buy new MRI machine = Investment
*Stay in hotel in Italy = Import or Export
how to calculate current ratios
Answer:
Current ratios = [tex]\frac{Current Assets}{Current Liabilities}[/tex]
Bono was kicked out of the band U2 for failing to attend rehearsals on time and constantly cutting the strings of Adam Clayton bass guitar. For the purposes of this question Bono was an employee of U2 which is an American company. Bono applies for unemployment insurance. Provided that he is actively attending auditions to display his willingness and ability to seek future employment he will receive state administered unemployment benefits.
A. True
B. False
Answer:
B
Explanation:
He was fired for constantly missing rehearsals which is a duty of his role as an employee of U2
He was fired for constantly missing rehearsals which is a duty of his role as an employee of U2. As the Bono is fired because of his continuous mistakes, and he is not liable to get the unemployment insurance.
What is unemployment insurance?Unemployment insurance benefits are offered by the U.S. Federal Government to enrollees who become jobless absolutely no fault of their own and fulfill some other rules.
Unemployment insurance is a state-federal program that pays financial compensation to workers who are unemployed.
Thus, option B is correct.
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Your review of the ledger reveals that each account has a normal balance. You also discover the following errors. 1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Utilities Expense were each understated $100. 2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $8,960, respectively. 3. A debit posting to Salaries and Wages Expense of $200 was omitted. 4. A $1,600 cash dividend was debited to Common Stock for $1,600 and credited to Cash for $1,600. 5. A $450 purchase of supplies on account was debited to Equipment for $450 and credited to Cash for $450. 6. A cash payment of $530 for advertising was debited to Advertising Expense for $53 and credited to Cash for $53. 7. A collection from a customer for $540 was debited to Cash for $540 and credited to Accounts Payable for $540. Prepare a correct trial balance. (Hint: It helps to prepare the correct journal entry for the transaction described and compare it to the mistake made.)
Answer:
Debit side $29,660
Credit side $29,660
Explanation:
Preparation of a correct trial balance
DOMINIC COMPANY
Corrected Trial Balance May 31, 2015
DEBIT SIDE
Cash $5,023
($5,050 +$450 - $477)
($530-$53=$477)
Accounts Receivable $2,030
($2,570 - $540)
Prepaid Insurance $930
($830 + $100)
Supplies $450
Equipment $12,750
($13,200 - $450)
Salaries and Wages Expense $4,530
($4,330 + $200)
Advertising Expense $1,447
($970 + $477)
($530-$53=$477)
Utilities Expense $900
($800 + $100)
Dividends $1,600
TOTAL $29,660
CREDIT SIDE
Accounts Payable $5,510
($5,700 - $100 + $450 - $540)
Unearned Service Revenue $690
Common Stock $14,500
($12,900 + $1,600)
Service Revenue $8,960
TOTAL $29,660
Therefore the CORRECTED TRIAL BALANCE will be:
Debit side $29,660
Credit side $29,660
Research the different types of body language the people use in different cultures.
Answer:
Explanation:
Body language is an extremely important form of communication in every single culture, yet every culture has differences. For example...
Korean's tend to greet individuals with a bow. This is a form of showing respect as well as saying hello. Other cultures such as the Swiss tend to greet others with three cheek kisses.
Body language can be for many occasions such as Americans using the middle finger to show their dislike of someone. There's also Italian's closing their fingers together in form of a pinecone to show their distraught over something.
Body language has always been a way of expressing oneself and their emotions.
Rolling Coast Inc. issued BBB bonds two years ago. These bonds provided a yield to maturity (YTM) of 11.5 percent. Long-term risk-free government bonds were yielding 8.7 percent at the time. The current risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the risk-free long-term government bonds are currently yielding 7.8 percent, then at what interest rate should Rolling Coast expect to issue new bonds
Answer: 9.2%
Explanation:
The interest rate that Rolling Coast should expect to issue new bonds will be calculated thus:
Firstly, we will calculate the previous risk premium on BBB bonds which will be:
= 11.5% - 8.7% = 2.8%
Then, the new risk premium on BBB bonds will be:
= Previous risk premium / 2
= 2.8% / 2
= 1.4%
Then, the interest rate that Rolling Coast should expect to issue new bonds will be:
= 7.8% + 1.4%
= 9.2%
Wine and Roses, Inc. offers a 5.5 percent coupon bond with semiannual payments and a yield to maturity of 6.32 percent. The bonds mature in 11 years. What is the market price of a $1,000 face value bond?a. $1,008.79b. $1,431.32c. $1,504.37d. $935.69e. $1,367.02
Answer:
d. $935.69
Explanation:
The computation of the market price of the bond is shown below:
Given that
Future value be $1,000
RATE = 6.32% ÷ 2 = 3.16%
NPER = 11 × 2 = 22
PMT = $1,000 × 5.5% ÷ 2 = $27.50
The formula is shown below:
=-PV(RATE,NPER,PMT,FV,TYPE)
After applying the above formula, the market price of the bond is $935.69
Tutor, Inc. (TI) provides instructional services to its customers. TI charges $330 per student. The Company expects to serve 1,150 students during the coming year. All of the Company's expenses are fixed. Total annual fixed cost are projected to be $125,000. If the estimated number of students increase by 20%, net income will increase by: (Round your final answer to the nearest percent.)
Answer:
Net income will increase by 30%.
Explanation:
Projected total fixed cost = $125,000
Fee per student = $330
Percentage increase in the old number of students = 20%
Old number of students = 1,150
New number of students = Old number of students * (100% + Percentage increase in the old number of students) = 1,150 * (100% + 20%) = 1,380
Old revenue = Fee per student * Old number of students = $330 * 1,150 = $379,500
New revenue = Fee per student * New number of students = $330 * 1,380 = $455,400
Old net income = Old revenue - Projected total fixed cost = $379,500 - $125,000 = $254,500
New net income = New revenue - Projected total fixed cost = $455,400 - $125,000 = $330,400
Therefore, we have:
Percentage increase in net income = ((New net income – Old net income) / Old net income) * 100 = (($330,400 - $254,500) / $254,500) * 100 = 30%
Therefore, net income will increase by 30%.
In 2016, David Hay started his own business, Hays Gardening and Landscapes. David was previously an employer of another business/
a) What was the opportunity costs for David when he started his business?
A. Cost of marketing to attract customers.
B. Loss of earnings from employment
C. Payment of taxes on profits
D. Risk of business failure
ANSWER:
b) Explain why this answer is correct?
Answer: B. Loss of earnings from employment
Explanation:
The opportunity cost of choosing a course of action is the returns that you would have earned from choosing the next best action.
David was employed and yet decided to quit that job and start a business. The next best thing he could have been doing was working which means that the opportunity cost was the returns from working which was his salary.
In deciding to open up his own businesses, he had to forego the opportunity costs which meant that he lost the earnings from that his employment.
Which of the following is NOT normally regarded as being a barrier to hostile takeovers? a. Targeted share repurchases. b. Shareholder rights provisions. c. Poison pills. d. Restricted voting rights. e. Abnormally high executive compensation.
Answer:e
Explanation:
What is the importance of desert in a meal?
Answer:
To enhance human satisfaction after taking a meal and makes up for low blood sugar
Explanation:
The importance of desserts in a meal cannot be overstated. One of which is "to enhance human satisfaction after taking a meal and makes up for low blood sugar."
This is simply because desserts are sweet courses usually taken at the end of a meal. They have a high quantity of sugar. Also, sugar or sugary foods have been confirmed to enhance people's mood as it is believed it elevates happiness hormones.
Consider your current uses of tap water. Think about some of the ways that you use water that are beyond what is necessary to sustain life.
a. If the price of tap water triples, what are some likely changes that you will make to your consumption of tap water?
A. decrease the length of your showers
B. turn water off while brushing your teeth
C. leave water running while brushing your teeth
D. increase the length of your showers
b. In general, the consumption of tap water _______obey the law of demand.
Answer:
a). A. decrease the length of your showers
B. turn water off while brushing your teeth
b). does
Explanation:
When the cost of the tap water increases and it gets triple, following some of the practices can help reduce the cost of the tape water used and it will also reduce the consumption of water. Some of the changes that I can include are:
-- I can lower the length of the shower so that less amount of water is used and more water is saved.
-- It is a good habit to turn off the water while we are brushing and only turn on the tape or open the tape whenever it is necessary. In this way we can prevent wasting water and reduce our water consumption.
Thus we can say that the consumption of the tape water does obey the law of demand.
If the price of tap water triples, we would most likely:
A. decrease the length of your showersB. turn water off while brushing your teethThis means that consumption of tap water does obey the law of demand.
Law of Demand Governs demand in relation to price. Posits that when prices rise for normal goods, their demand drops. The reverse is true.By turning off water when brushing or using less water to shower, we are demanding less water as a result of an increase in price. Water therefore abides by the Law of Demand.
Find out more on the law of demand at https://brainly.com/question/4803223.
To determine why a company is more profitable than others in the same industry, a strategist should use: A. A VRIO Analysis B. A PESTLE Analysis C. A SWOT analysis D. A Porter's Five Forces analysis
Answer:
The answer is D
Explanation:
Option D is correct. Porter's five forces analysis is used to determine the intensity of competition in an industry.
This intensity determines how profitable firms in the industry will be.
The five forces are:
1. Bargaining power of consumers
2. Bargaining power of producers.
3. Threat of new entrants - this is the new competition coming into the industry
4. Threat of substitute goods.
5. Competitive rivalry.
Given the following historical demand, what is the weighted moving average forecast (0.4, 0.3, 0.3) for Week 6?
Week 1 = 3000
Week 2 = 5000
Week 3 = 7000
Week 4 = 9000
Week 5 = 11000
Week 6 = Predict using the weighted moving average forecast (0.4, 0.3, 0.3)
Last Period Forecast: F = D
t+1 t
where Ft+1 = forecast for the next period, t+1 and Dt = demand for the current period, t
Moving Average Weighted Moving Average
Forecast Forecast
Ft+1 = nΣ i=1 Dt+1-i/n Ft+1 = nΣ i=1 Wt+1-i Dt+1-i
where Ft+1 = forecast for the next period, t+1 and Dt = actual demand for the period, t +1-i and n = number of most recent demand observations used in the forecast and Wt+1-i = weight assigned to the demand in period, t +1-i.
A. 7000.
B. 9200.
C. 9000.
D. 13000.
E. 8800.
Answer:
The correct option is B. 9200.
Explanation:
This can simply be answered as follows:
[tex]F_{6} =(D_{5}*W_{5})+(D_{4}*W_{4})+(D_{3}*W_{3})[/tex] .................. (1)
Where:
[tex]F_{6}[/tex] = Weighted moving average forecast (0.4, 0.3, 0.3) for Week 6 = ?
[tex]D_{5}[/tex] = Week 5 demand = 11,000
[tex]D_{4}[/tex] = Week 4 demand = 9,000
[tex]D_{3}[/tex] = Week 3 demand = 7,000
The (0.4, 0.3, 0.3) implies that:
[tex]W_{5}[/tex] = Weight of Week 5 demand = 0.4
[tex]W_{4}[/tex] = Weight of Week 4 demand = 0.3
[tex]W_{3}[/tex] = Weight of Week 3 demand = 0.3
Substituting all the relevant values into equation (1), we have:
[tex]F_{6}[/tex] = (11,000 * 0.40) + (9,000 * 0.30) + (7,000 * 0.30) = 9,200
Therefore, the correct option is B. 9200.
The weighted moving average forecast for week 6 is 9,200.
The calculation for determining the weighted moving average forecast for week 6 is= (Week 5 × 0.4) + (Week 4 × 0.3) + (Week 3 × 0.3)
= (11000 × 0.4) + (9000 × 0.3) + (7000 × 0.3)
= 9200
Therefore we can conclude that the weighted moving average forecast for week 6 is 9,200.
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3. Assume that on January 2, 2022, the copyrighted item was impaired in its ability to continue to produce strong revenues. The other intangible assets were not affected. Starn estimated that the copyright would be able to produce future cash flows of $22,100. The fair value of the copyright was determined to be $21,100. Compute the amount, if any, of the impairment loss to be recorded.
Answer:
The amount of the impairment loss to be recorded is $6,800.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
On January 1, 2020, Starn Tool & Manufacturing Company purchased a copyright for $31,000 cash. It is estimated that the copyrighted item will have no value by the end of 10 years.
Assume that on January 2, 2022, the copyrighted item was impaired in its ability to continue to produce strong revenues. The other intangible assets were not affected. Starn estimated that the copyright would be able to produce future cash flows of $22,100. The fair value of the copyright was determined to be $21,100. Compute the amount, if any, of the impairment loss to be recorded.
The explanation of the answer is now provided as follows:
Amortization expenses for 2020 = Annual amortization expense = Copyright cost / Estimated useful life of the copyright = $31,000 / 10 = $3,100
Book value of copyright on January 2, 2022 = Copyright cost - Amortization expenses for 2020 = $31,000 - $3,100 = $27,900
Copyright fair value = $21,100
Impairment loss = Book value of copyright on January 2, 2022 - Copyright fair value = $27,900 - $21,100 = $6,800
Therefore, the amount of the impairment loss to be recorded is $6,800.
If an asset costs $16,000, has an expected useful life of 8 years, is expected to have a $2,000 salvage value and generates net annual cash inflows of $2,000 a year, the cash payback period is:________
Answer:
It will take 7.5 years to cover the initial investment. If the company take into account the tax shield of the depreciation expense, the payback period will be lower.
Explanation:
Giving the following information:
Initial investment= $16,000
Useful life= 8 years
Salvage value= $2,000
Cash inflows= $2,000
The payback period is the time required to cover the initial investment.
Year 1= 2,000 - 16,000= -14,000
Year 2= 2,000 - 14,000= -12,000
Year 3= 2,000 - 12,000= -10,000
Year 4= 2,000 - 10,000= -8,000
Year 5= 2,000 - 8,000= -6,000
Year 6= 2,000 - 8,000= -4,000
Year 7= 2,000 - 4,000= -2,000
Year 8= 4,000 - 2,000= 2,000 (Assuming the asset is sold for its salvage value)
To be more accurate:
(2,000/4,000)= 0.5
It will take 7.5 years to cover the initial investment. If the company take into account the tax shield of the depreciation expense, the payback period will be lower.
The amount of the estimated average income for a proposed investment of $60,000 in a fixed asset, giving effect to depreciation (straight-line method), with a useful life of four years, no residual value, and an expected total income yield of $21,600, is: Group of answer choices $10,800 $21,600 $ 5,400 $30,000
Answer:
$5,400
Explanation:
Calculation to determine the estimated average income
Using this formula
Estimated average income=Expected total income yield/Useful life
Let plug in the formula
Estimated average income= $21,600 ÷ 4
Estimated average income= $5,400
Therefore the estimated average income is $5,400
Equipment acquired on January 8 at a cost of $168,000 has an estimated useful life of 18 years,
has an estimated residual value of $15,000, and is depreciated by the straight-line method.
A. What was the book value of the equipment at December 31 the end of the fourth year?
B. Assuming that the equipment was sold on April 1 of the fifth year for $125,000, journalize
the entries to record (1) depreciation for the three months until the sale date, and (2) the
sale of the equipment.
Answer:
A. $134,000
B1. Dr Depreciation expense $2,125
Cr Accumulated depreciation- equipment $2,125
B2. Dr Cash $125,000
Dr Loss on sale of equipment $6,875
Dr Accumulated depreciation- equipment $36,125
Cr Equipment $168,000
Explanation:
A. Calculation to determine What was the book value of the equipment at December 31 the end of the fourth year
First step is to calculate the Annual depreciation using this formula
Annual depreciation = (Cost of machinery-Residual value)/ useful life
Let plug in the formula
Annual depreciation= (168,000-15,000)/18
Annual depreciation= $8,500
Second step is to calculate the Accumulated depreciation for 4 years using this formula
Accumulated depreciation for 4 years = Annual depreciation x 4
Let plug in the formula
Accumulated depreciation for 4 years= 8,500 x 4
Accumulated depreciation for 4 years= $34,000
Now let determine the Book value of equipment at December 31 at the end of year
Using this formula
Book value of equipment at December 31 at the end of year 4 = Cost of equipment - Accumulated depreciation for 4 years
Let plug in the formula
Book value of equipment at December 31 at the end of year = 168,000-34,000
Book value of equipment at December 31 at the end of year = $134,000
Therefore the book value of the equipment at December 31 the end of the fourth year is $134,000
B1. Preparation of the journal entries to record (1) depreciation for the three months until the sale date
Year 5, April 1
Dr Depreciation expense $2,125
Cr Accumulated depreciation- equipment $2,125
( To record depreciation expense)
Calculation for Depreciation for 3 months of year 5 using this formula
Depreciation for 3 months of year 5 = Annual depreciation x 3/12
Let plug in the formula
Depreciation for 3 months of year 5 == 8,500 x 3/12
Depreciation for 3 months of year 5 = $2,125
B2.Preparation of the journal entries to record (2) the sale of the equipment.
Year 5, April 1
Dr Cash $125,000
Dr Loss on sale of equipment $6,875
Dr Accumulated depreciation- equipment $36,125
Cr Equipment $168,000
( To record sale of the equipment)
Calculation for Accumulated depreciation at April 1, year 5 using this formula
Accumulated depreciation at April 1, year 5 = Accumulated depreciation for 4 years + Depreciation for 3 months of year 5
Let plug in the formula
Accumulated depreciation at April 1, year 5= 34,000+2,125
Accumulated depreciation at April 1, year 5= $36,125
Calculation for Book value of equipment at April 1, year 5 using this formula
Book value of equipment at April 1, year 5 = Cost of equipment - Accumulated depreciation at April 1, year 5
Let plug in the formula
Book value of equipment at April 1, year 5 = $168,000-$36,125
Book value of equipment at April 1, year 5 = $131,875
Calculation for Loss on sale of equipment using this formula
Loss on sale of equipment = Book value - Sale of equipment
Let plug in the formula
Loss on sale of equipment=$ 131,875-$125,000
Loss on sale of equipment= $6,875
.
Problems and Applications Q11 You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. When should you raise the admission price in order to increase revenue
Answer: Only when demand is inelastic
Explanation:
For a product that has an inelastic demand, the demand of a buyer with regards to a product has minimal changes when when there is a change in price. In such case, an increase in the price will lead to an increase in revenue.
On the other hand, for a product that has an elastic demand, there will be a greater change in the demand of the buyer when when there is a change in price. In such case, an inrease in the price will lead to an reduction in revenue as buyers will go for other products.
Therefore, the admission price should be increased when demand is inelastic in order to increase revenue.
Pistol Corporation purchased 100 percent ownership of Scope Products on January 1, 20X6, for $56,000, at which time Scope Products reported retained earnings of $10,000 and capital stock outstanding of $30,000. The differential was attributable to patents with a life of eight years. Income and dividends of Scope Products were
Answer:
1.20X6
1a. Dr Investment in Scope Products $56,000
Cr Cash $56,000
1b. Dr Cash $ 6,000
Cr Investment in Scope Products $ 6,000
1c. Dr Investment in Scope Products $16,000
Cr Income from Scope Products $16,000
1d. Dr Income from Scope Products $2,000
Cr Investment in Scope Products $2,000
20X7
2a. Dr Cash $8,000
Cr Investment in Scope Products $8,000
2b. Dr Investment in Scope Products $24,000
Cr Income from Scope Products $24,000
2c. Dr Income from Scope Products $2,000
Cr Investment in Scope Products $2,000
20X8
3a. Dr Cash $8,000
Cr Investment in Scope Products $8,000
3b. Dr Investment in Scope Products 32,000
Cr Income from Scope Products 32,000
3c. Dr Income from Scope Products $2,000
Cr Investment in Scope Products $2,000
2.$98,000
Explanation:
1. Preparation of the equity method entries that Pistol should record to account for this investment in 20X6, 20X7, and 20X8.
Equity Method Journal Entries for Pistol Corporation.
20X6
1a. Dr Investment in Scope Products $56,000
Cr Cash $56,000
1b. Dr Cash $ 6,000
Cr Investment in Scope Products $ 6,000
1c. Dr Investment in Scope Products $16,000
Cr Income from Scope Products $16,000
1d. Dr Income from Scope Products $2,000
Cr Investment in Scope Products $2,000
{ ($56,000-$10,000-$30,000) /8 years }
20X7
2a. Dr Cash $8,000
Cr Investment in Scope Products $8,000
2b. Dr Investment in Scope Products $24,000
Cr Income from Scope Products $24,000
2c. Dr Income from Scope Products $2,000
Cr Investment in Scope Products $2,000
{ ($56,000-$10,000-$30,000) /8 years }
20X8
3a. Dr Cash $8,000
Cr Investment in Scope Products $8,000
3b. Dr Investment in Scope Products 32,000
Cr Income from Scope Products 32,000
3c. Dr Income from Scope Products $2,000
Cr Investment in Scope Products $2,000
{ ($56,000-$10,000-$30,000) /8 years }
2. Calculation to determine the Balance in Investment in Scope Products.
Particulars Amount ($)
Initial Investment Amount $56,000
Add : Share of Income $72,000
($16,000+$24,000+$32,000)
Less : Dividend Received ($22,000)
($6,000+$8,000+$8,000)
Less : Patent Amortization ($6,000)
($2,000 * 3 years)
Balance in Investment in Scope Products Account as on Dec. 31 20X8 $98,000
Therefore the balance of the Investment in Scope account on Pistol balance sheet at December 31, 20X8, after all required equity method entries have been recorded is $98,000
Consumer protection is NOT a modern idea, McKay states. Which ancient legal document talked about this concept?
Answer:
Hammurabi's Code
Explanation:
Hammurabi's Code was a Babylonian legal document that was written between 1755 - 1750 BC.
Its main focus is fairness in regards to the rule of law. Responsibilities were allocated to different parties in a legal relationship so a producer will be deterred from engaging in unfair practices when dealing with a consumer.
Hammurabi's Code is an old document that still remains relevant to modern legal practitioners.
Feedback is a form of:
a. advertising.
b. complaining.
c. resolving concerns.
d. coaching.
Answer:
C. resolving concerns
hope this helps
have a good day :)
Explanation: