In this case where Sean bought new headphones for $50 and sees a friend who got the the same at lesser price which makes him assumes that these cheaper headphones must be knockoffs, the logical fallacy that he is suffering in this example is known as anchoring.
What is an anchoring bias?Basically, an anchoring bias refers to a faulty heuristic that occurs when someone focus on one piece of information when making a decision or solving a problem. Often time, such people make an inaccurate final estimates due to inaccurate adjustments from an initial value.
In essence, it mainly happens when we rely too much on pre-existing or first information they find when making decisions.
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f the durham bulls examine the impact a change in ticket price has on attendance, the minor league baseball team would be using an example of .
If the durham bulls examine the impact a change in ticket price has on attendance, the minor league baseball team would be using an example of quantitative data analysis.
What is quantitative data analysisQuantitative data analysis can be defined as the process in which data or information are analyzed and interpreted using numerical method.
Most researcher tend to make use of quantitative data analysis method when they have want to convert the data they collected into a more structured data that will inturn gives them the accurate result they want so as to draw a conclusion or reach a conclusion.
Based on the scenario it is advisable that the company makes use of what is called quantitative data analysis as this will enables them to known the imoact the change in ticket price has on attendance.
Therefore the company should make use of quantitative data analysis.
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jack is considering adding toys to his general store. he estimates the cost of toy inventory will be $4,200. the remodeling and shelving costs are estimated at $1,500. toy sales are expected to produce net annual cash inflows of $1,200, $1,500, $1,600, and $1,750 over the next four years, respectively. should jack add toys to his merchandise if he requires a three-year payback period? why or why not? multiple choice yes; because the payback period is 2.94 years yes; because the payback period is 2.02 years yes; because the payback period is 3.80 years no; because the payback period is 2.02 years no; because the payback period is 3.80 years
No, Jack should not add toys to his merchandise if he requires a three-year payback period because the payback period is 3.8 years.
Given,
Cost of inventory = $4,200
Shelving costs = $1,500
The calculations are done below-
Total outflows = Cost of the inventory + the shelving costs
Total outflows = $4,200 + 1,500
= $5,700
Amount recovered in the first 3 years = 1,200 + 1,500 + 1,600
Amount recovered in the first 3 years = 4,300
Payback period = [tex]3 + \frac{(5,700 - 4300)}{1750}[/tex]
Payback period = 3.8 years
No, Jack should not add toys to his merchandise if he requires a three-year payback period because the payback period is 3.8 years.
Hence, option E is correct.
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what should the west be doing to keep healthy economies? what are their options?
Answer:
The west should pursue policies that encourage economic growth and stability. Their options include:
1. Pursuing sound monetary policies that promote economic growth and stability.
2. Adopting pro-growth fiscal policies that help to increase government revenue and reduce government spending.
3. Promoting free trade and investment that allow for the efficient allocation of resources and the maximization of economic growth.
4. Pursuing policies that increase the flexibility of their economies and allow for a quick response to changing economic conditions.
5. Encouraging entrepreneurship and innovation that lead to new products and services and create jobs and economic growth.
clonex labs, incorporated, uses the weighted-average method in its process costing system. the following data are available for one department for october:
Equivalent units of production for Materials in October is 202,000 units. While the equivalent units of production for Conversion in October is 196,00 units.
Weighted-Average Method:
Equivalent Units of Convertible Materials Production Units transferred out amounted to 190,000
While Equivalent units in work-in-process inventory for conversion: 15,000 units × 80% = 12,000
While Equivalent units in work-in-process inventory for conversion: 15,000 units × 40% = 6,000
Equivalent units of production for Materials in October = 190,000+12,000 = 202,000 Equivalent units of production for conversion in October = 190,000+6,000 = 196,000.The equivalent unit of production can be described as the number of goods that have been successfully created through the activity of converting raw materials into goods according to product planning. The characteristic of process costing is that the company will only calculate the cost of production each time a product plan is made, namely based on the batch number.
What is the number of equivalent units is the result of production created by the company during its activities. The process costing system is used for companies that carry out continuous production activities based on homogeneous or standardized products.
Clonex Labs, Inc., uses the weighted-average method in its process costing system. The following data are available for one department for October: Percent Completed Units Materials Conversion Work in process, October 1 30,000 65 % 30 % Work in process, October 31 15,000 80 % 40 % The department started 175,000 units into production during the month and transferred 190,000 completed units to the next department. Required: Compute the equivalent units of production for October.
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factory work is hot, hard work. recently there have been verbal and almost physical fights on the floor. the company is considering using a personality test as part of the hiring process. should it?
Factory work is hot, hard work. Recently there have been verbal and nearly physical fights on the floor.
According to the resource dilution idea, one child's ability to accumulate resources starts to erode when parents have more children since their ability to offer resources is limited factory work . According to this belief, having fewer children is beneficial since siblings always vie for their parents' attention, money, and resources. physical fights Therefore, given the choice between the middle child, the youngest sibling, and the parents, it is likely that the middle sibling will experience resource dilution as the parents will give the youngest child more attention.
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burrus investment funds solicited clients for high-profit returns from a fictitious new internet business. burrus employees paid off the early investors from new funds raised to cover the costs. this type of fraudulent crime is known as .
Burrus investment funds solicited clients for high-profit returns from a fictitious new internet business. Burrus employees paid off the early investors from new funds raised to cover the costs. this type of fraudulent crime is known as a Ponzi scheme.
A Ponzi scheme is a fraudulent investment scheme that entices investors with high rates of return and little risk. A Ponzi scheme is a fraudulent investment operation in which money is collected from later participants to pay returns to earlier investors. This is comparable to a pyramid scam in that both rely on new investors' money being used to reimburse the previous funders.
When the influx of new investors stops and there isn't enough money to go around, both Ponzi schemes and pyramid schemes finally hit their bottom. The plans then start to fall apart.
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When faced with quota pressure, a salesperson with customer orientation would most likely: a. avoid issuing express warranties. b. practice the hard-sell approach. c. overstate the benefits of the recommended product. d. explain the cons of the recommended product. e. engage in fast talking.
When faced with quota pressure, a salesperson with customer orientation would most likely explain the cons of the recommended product.
A business strategy known as "customer orientation" prioritizes the demands of the client over those of the company. Companies that prioritize their customers are aware that without continually increasing their customer focus, their firm will not succeed.
Cons are a drawback or justification for not acting: The higher operating expenses of a larger automobile are one of its drawbacks. Before making a choice, you must consider all the advantages and disadvantages of the situation.
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Main Answer:
When faced with quota pressure, a salesperson with customer orientation would most likely practice the hard-sell approach.
Explanation:
The hard-sell approach will make the salesperson under quota pressure to use a direct and insisting language so that he can convince the customer to go for the product in a short span of time.
The correct option is b. practice the hard-sell approach. The remaining options are ruled out.
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based on the dupont model an equity multiplier greater than 1 will produce a return on equity that is higher than the return on assets. what is the trade-off to this effect? multiple choice question. higher equity results in reduced financial flexibility. higher leverage results in higher probability of default. higher leverage results in lower probability of default.
How much of a company's assets are financed by equity as opposed to debt is determined by the equity multiplier. It is a sign of risk for investors.
What is equity multiplier?
The proportion of a company's assets that are financed by equity as opposed to debt is determined by a risk indicator called the equity multiplier. The formula for calculating it is to divide a company's total asset value by the sum of its shareholders' equity.
A successful business must make asset investments. Companies finance the purchase of assets by issuing debt, equity, or a mix of the two. The equity multiplier displays the percentage of total assets financed by shareholder equity. Investors use this ratio essentially as a risk indicator to gauge how indebted a company is.
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company z is just starting to make a brand new product it has never made before. it has completed two units so far. the first unit took 18 hours to complete and the next unit took 14 hours. based only on this information, what would be the estimate of the learning percentage in this process?
The estimated percentage of learning is 77.7% in this process for company Z according to the learning curve theory
According to the learning curve theory, as output doubles, the time required to complete a task decreases by a fixed amount. In this problem, the output from the first unit as we produced the second unit, so we can estimate the learning percentage as (Unit 2 time)/(Unit 1 time) = 14/18. The Learning Curve Theory is based on the idea that the more a person repeats a process or activity, the better they become at it. This results in lower input costs and increased overall output.
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the governor wants to impose a $1 excise tax on some good—he doesn't care which—but he does want to minimize the deadweight loss. the deadweight loss will be least when:
The deadweight loss will be the least when both demand and supply are inelastic.
The deadweight loss depends on both the inelasticity of supply and demand. The more the demand or supply is inelastic, the less will be the deadweight loss. The relation is inversely proportional.
The reason is that the quantity bought or sold varies less with the price. There would be no deadweight loss if demand and supply are perfectly inelastic.
As deadweight loss is directly proportional to the elasticity of supply and demand so it will increase if supply and demand become elastic.
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several years ago amy westbrook, who is in the lending business, loaned sara stuart $30,000 to purchase an automobile to be used for personal purposes. in august of the current year, sara filed for bankruptcy, after paying back $1,000 of the loan to amy. amy was notified by the bankruptcy court that she could not expect to receive more than an additional $4,000. amy has contacted you about the possibility of taking a bad debt deduction for the current year.
In a letter made to Amy to advise her on whether she may claim a bad debt deduction for the current year, the best recommendation is that she can.
When can you claim a bad debt deduction?
According to IRS guidelines, a firm cannot claim a deduction for a bad debt if the debt has been judged completely worthless, which indicates that the remaining amount cannot be collected.
Amy has been told by the bankruptcy court that she can only receive $4,000 extra, which implies the remainder of the debt is worthless.
Amy can and should thus claim the bad debt as a tax deduction.
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A bank loaned out $, part of it at the rate of per year and the rest at per year. If the interest received in one year totaled $, how much was loaned at.
A bank loaned out $17000, part of it at the rate of 7 % per year and the rest at 15 % per year. If the interest received in one year totaled $2000, Hence, $6875 was loaned at 7 %.
Let x be the amount loaned at 7%, in dollars
Then the amount loaned at 15% is the rest (17000 - x) dollars.
The interest yielded at 7% is 0.07x dollars.
The interest yielded at 15% is 0.15 × (17000 - x) dollars.
Your equation is
⇒ interest + interest = total interest, or
⇒ 0.07x + 0.15 (17000 - x) = 2000 dollars.
Simplify and solve for x
⇒ 0.07x + 0.15 × 17000 - 0.15 x = 2000
⇒ x = [tex]\frac{200-0.15(17000)}{0.07-0.15}[/tex] = 6875 dollars.
The amount loaned at 7% is $6875.
A loan is a financial instrument that enables a user to access a predetermined amount of money at the commencement of the transaction with the requirement that this amount, plus the negotiated interest, be returned within a given time frame. Regular payments are made to repay the debt.Interest is the cost of borrowing money or the fee you charge to lend it. Most frequently, interest is shown as an annual percentage of the loan amount. The interest rate for the loan is denoted by this proportion.Learn more about Interest, here
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true or false: privately held firms tend to rely almost exclusively on the use of market value weights in the calculation of their weighted average cost of capital. true false
False, privately held firms do not tend to rely almost exclusively on the use of market value weights in the calculation of their weighted average cost of capital.
Market value weights for each lending element (equity, debt, etc.) must be used when determining the weighted-average of the returns expected by various capital providers, because market prices reflect the true economic assertion of each type of financing outstanding, whereas book values may not. Book value is the net value of a company's assets as shown on its balance sheet, and it is approximately equivalent to the total amount all shareholders would receive if the company were liquidated. Market value is a company's worth based on the total market value of its outstanding shares, also known as market capitalization.
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a company enters into a short futures contract to sell 5,000 bushels of wheat for 250 cents per bushel. the initial margin is $3,000 and the maintenance margin is $2,000. what price change would lead to a margin call? under what circumstances could $1,500 be withdrawn from the margin account?
For margin call, the price should rise by 20 cents to 270 cents OR $ 2.70.
The price should drop by 30 cents to $2.20 (220 cents).
What is margin?
Margin is the collateral how an investor must deposit with one‘s broker or transfer to encompass the credit risk that the holder poses to the broker or exchange. An investor may incur credit risk if they borrow money from a broker to buy financial instruments, borrow money to sell them short, or enter into a derivative contract. Whenever an investor buys an asset on margin, he or she borrows the balance from a broker. The initial payment is made to the real estate agent for the asset is referred to as buying on margin; the investor uses this same marginable bonds in their trading account as collateral.
A futures contract was purchased. Each contract contains 5000 bushels.
3000 is the initial margin.
2000 for the maintenance margin
Q.1, If the contract loses by 3000 - 2000 = 1000, a margin call will be issued.
Because the contract is for 5000 bushels, the price should rise by = 1000/5000 = $ 0.20 = 20 cents.
Because the agreement was sold at 250 cents per bushel, the margin call price should be = 250 + 20 = 270 cents.
Answer 1: For margin call, the price should be raised by 20 cents to 270 cents OR $ 2.70.
Q.2, To withdraw 1500, the contract value must increase by 1500.
Because the contract is for 5000 bushels, the price should decrease by = 1500/5000 = $0.30 or 30 cents.
The cost should be = 250 cents - 30 cents = 220 cents.
Answer 2: The price should be reduced by 30 cents to $2.20.
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compute the total cost of owning the car for five years. for simplicity, the cost of owning the car will be comprised of two components 1) the five year cost to own the car which is its depreciation in value after 5 years and 2) the cost of gas to drive the car over the five
According to this study, the average five-year depreciation rate of vehicles in the United States is approximately 50.2% of their initial value.
What is Total cost?Total fixed costs are the sum of all a company's consistent, non-variable expenses. Assume a company pays $10,000 per month for office space, $5,000 per month for machinery, and $1,000 per month for utilities. In this case, the total fixed costs for the company would be $16,000. In its most basic form, total cost (TC) refers to all of the costs associated with producing something or engaging in an activity. Total cost in economics is made up of variable costs plus fixed costs. Variable costs (VC) are costs that vary depending on how many goods you purchase or how much service you use.To learn more about total cost, refer to:
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in general, job satisfaction has more to do with nontask perceptions of work, such as feelings about co-workers, while organizational climate relates to perceptions of workload and the nature of the tasks performed.
The statement is false.
The required details about organizational climate is mentioned in below paragraph.
An employee's long-term perception of the workplace and company culture is referred to as the organizational climate. Climate can be compared to personality in that each organization has a distinct climate, just as each person has a distinct personality. An assortment of traits and qualities that employees perceive as being present represent this. These have an impact on how individuals behave at work in a variety of ways, including relationships, autonomy, and organizational structure.
The link that employees have with their company is strengthened when there is a favorable work environment.
Climate is not produced overnight; rather, it develops and is influenced through time as a result of a variety of interactions and experiences.
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The lower the market price,
A) the higher the rate of return
B) the riskier the investment
C) the safer the investment
D)the lower the taxes
Do you believe that "rationing" ensures that "everyone receives their fair share"? If no, why? If yes, why?
Yes, "rationing" ensures that "everyone receives their fair share".
Rationing is the managed distribution of scarce resources, goods, services, or a synthetic restriction of demand. Rationing controls the size of the ration, that is one's allowed part of the sources being allotted on a selected day or at a specific time.
Rationing involved placing limits on purchasing certain high-demand gadgets. The authorities issued some of the “points” to every person, even babies, which needed to be turned in in conjunction with cash to purchase items made with restricted items.
Rationing often includes food and other necessities for which there may be a shortage, including materials for the conflict attempt such as rubber tires, leather-based shoes, apparel, and gasoline. Rationing food and water may be necessary throughout an emergency, along with a herbal disaster or terror attack.
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randy has prepared a résumé that breaks down all his useful skills into categories that will let employers know what he can do for them. randy has created which of these résumés?
Since randy is preparing a résumé that breaks down all his useful skills into categories that will let employers know what he can do for them, then, the type of résumés that randy has created is known as a functional resume.
What is a functional resume?Basically, a functional resume is also known as a skills-based resume that highlights an applicant's skills and training and can be a good fit if you’re applying for specific jobs. This functional resume focuses on highlighting skills and qualifications instead of work experience.
The applicant;s abilities are grouped under various skill sections such as the Summary of Qualifications and Professional Skills where they explains what it is he/she can do. The main goal of a functional resume is to show the employer that you have the skills to get the job done even if such applicant lack a work experience.
Missing options" a. chronological resume b. functional resume c. combination resume d. skill/asset resume
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choose the best words to complete each sentence and form a true statement
Bard needs help repaying the loan he got to pursue a graduate program in a top-ranking university. If Bard opts for a work-study program, he will get a blank job. But first, Bard needs to check if hid college participates in the blank
military
part-time
full-time
Federal work-study program
Federal pell grant
Federal perkins loan program
If Bard opts for a work-study program, he will get a part time job. But first, Bard needs to check if hid college participates in the Federal work-study program.
What is the work-study program?The work-study program is a program that allows students in tertiary institutions to be able to work while studying in order to be able to finance their education.
The federal government offers a work-study program for certain universities where the student will have to work part-time and will have to maintain a certain grade. Bard needs to check if his university is one of such university where the federal government offers the program.
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a customer calls you and excitedly tells you that she just had her first child. she says her mother-in-law gifted $20,000 to them in honor of the birt
Paulette, quentin, and rosie each donated money to a charity. Paulette gave as much money as quentin and rosie gave together. If quentin had given three times more than he gave, he would have given $40 more than paulette. And if rosie had given $20 less, she would have given half as much as paulette. How much did paulette give?.
Paulette donated $200. The concept of natural numbers is used here.
What are natural numbers?The numbers used for counting and sorting are known as natural numbers in mathematics. Counting and ordering are done with the help of ordinal and cardinal numbers, respectively.In contrast, whole numbers are all natural numbers, including zero, as in 0, 1, 2, 3, 4, and so forth. All whole numbers and their negative equivalent are considered integers.Let p,q, and r are the amount donated by Paulette, Quentin, and Rosie respectively.
P = q+r ...(1)
3q = p+40
q=p+40/3 ....(2)
r-20 = p/2
r=p/2 + 20 .....(3)
Replacing (2) and (3) in (1). we get
p=p+40/3 + p/2 + 20
p = 2p + 80 +3p +120/6
6p = 5p +200
p= 200
Hence, Paulette donated $200.
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jolly industries issued a $1.8 million note payable to beckman construction in exchange for construction services. similar notes have an interest rate of 12 percent. beckman construction plans to construct the building with equal costs over the life of the note, thus equaling three annual payments of $600,000. what should beckman record as their discount on notes payable when the note is issued?
When the note is issued, the Beckman company records a discount on notes payable of $358,902.
What exactly is equal cost?Equal-cost multi-path routing (ECMP) is a routing strategy in which packets to a single destination are forwarded over multiple best paths with equal routing priority.Because it is a per-hop local decision made independently at each router, multi-path routing can be used in conjunction with most routing protocols. When equal-cost multi-path (ECMP) is enabled on two or more routes leading to the same destination, traffic is routed using a hash-based balancing method. Through the use of multiple links, this approach has the potential to increase traffic throughput. You can set up to 16 routes.Therefore,
When the note is issued, the Beckman company records a discount on notes payable of $358,902.
The present value of three annual payments of $600,000 at 12% interest is $600,000 * 2.40183 (PVF-OA3, 12%)= $1,441,098.
Therefore, the discount is $1,800,000 - $1,441,098 = $358,902.
The complete question is:
Jolly Industries issued a $1.8 million note payable to Beckman Construction in exchange for construction services. Similar notes have an interest rate of 12 percent. Beckman Construction plans to construct the building with equal costs over the life of the note, thus equaling three annual payments of $600,000. What should Beckman record as their Discount on Notes Payable when the note is issued?
Assume that the PVF-OA3, 10% = 2.48685, PVF-OA3, 12% = 2.40183, PVF3, 10% = 0.75131, and PVF3, 12% = 0.71178.
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ge competes in industries ranging from medical devices, to financial services, to turbine engines. ge's mixed strategy is an example of strategy.
GE competes in industries ranging from medical devices to financial services, to turbine engines. GE'smixed strategy is an example of corporate-level strategy. Thus, option A is correct.
What is a financial goal?A financial goal is an objective or plan for handling money. It is a function of how much money you make, spend, save, or invest. Pension planning is a type of financial goal that a person or individual might set for themselves based on their requirements.
A multi-tiered growth strategy used by management to establish, describe and accomplish particular goals of the business is known as a corporate-level strategy.
Therefore, option A is the correct option.
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The question is incomplete, the complete question is:
GE competes in industries ranging from medical devices, to financial services, to turbine engines. GE'smixed strategy is an example of ____ strategy.
A.corporate-level
B.long-term
C.business-level
D.functional
E.short-term
[6]
2 Mohammed owns a bakery. He makes bread and cakes. He
employs three workers who help him mix the dough for the bread
serve customers. Mohammed has calculated that the 'added value'
and cakes, put the dough into tins, bake the bread and cakes, and
of his business is low. His customers complain when he tries to
increase his prices. We can buy the same bread and cakes at
lower prices,' they tell him.
Define 'added value'.
Added value can be defined as a set of characteristics related to the product or service that are perceived by the consumer and go beyond its core benefit.
Is the added value advantageous for companies?Yes, because by adding features to its products and services that increase their added value, the company is able to increase the value of products, create value for consumers, increase competitiveness and market positioning.
Some features that help increase the added value of a product are:
PackingAttendanceQualityBenefitsDesignDistributionCompanies must invest in characteristics that increase the value of the brand, to find out what they are, marketing studies and data analysis can be carried out to identify which are the psychosocial characteristics that consumers seek when consuming a particular product.
Therefore, added value can also be understood as value perceived by consumers who positively change their perception of a brand.
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kwame is willing to pay $185 per month for four years for a car payment. if the interest rate is 4.9 percent per year, compounded monthly, and he makes a cash down payment of $2,500, what price car can he afford to purchase?
The cost of the car he can afford is $9,802.63.
Compound interest is defined.Compound interest is the term used to describe interest that is earned on interest. This may be shown using simple math: if you have $100 and it earns 5% interest every year, you will have $105 at the end of the first year. At the end of the second year, you'll have $110.25.
In the above question:
Let x represent the cost of the car Kwame can afford.
Down payment = $2,500
The balance that needs to be financed is P = x - 2500.
The sum of the payments must match the monthly payments.
Payment in full over 4 years (48 months) is
A = $185*48 = $8,880
The rate is r = 4.9% = 0.049.
The compounding interval is n = 12.
The time is t = 4 years.
The amount financed is P = $(x - 2500).
Therefore
(x - 2500)(1 + 0.049/12)⁴⁸ = 8880
1.216(x - 2500) = 8880
x - 2500 = 7302.63
x = 9802.63
Kwame can afford a car priced at $9,802.63.
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thom owes $7,800 on his credit card. the credit card carries an apr of 18.7 percent compounded monthly. if thom makes payments of $240 per month, how long will it take for him to pay off the credit card assuming that he makes no additional charges?
It would take around 44 months or 3 years and 8 months for him to pay off the credit card assuming that he makes no additional charges.
What is a credit card?A credit card is a small, rectangular piece of plastic or metal that is issued by a bank or other financial institution and enables its holder to borrow money to pay for goods and services at businesses that accept credit cards. Credit cards impose the requirement that cardholders repay the borrowed funds, plus any applicable interest and any additional agreed-upon charges, in full or over time, either by the billing date or at a later date.
Compared to other consumer loan types, credit cards typically have a higher annual percentage rate (APR).
Let the time taken be t for him to pay off the credit card then we have
$7,000 = $220{[1 − 1/(1 + .183/12)^t]/.183/12}
t = 43.87 months
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Investor a intends to invest $850,000 in a new business. the financial projections show that during the first year of operations the business will generate $70,000 in profit for the year. in order to finance the investment, investor a has applied for a business loan with an interest rate of 7%. required: 1.) calculate the expected return on assets. (state as a percentage) 2.) state the cost of financing. (state as a percentage) 3.) should investor a invest in the new business? why or why not?
the expected return on assets will be = 1.24%
State the cost of financing = 98.86%
Investor a should invest in the existing business because it has a profitablity index greater than 1
Capital = $850000
Profit = $70000
Loan with 7% interest
Amount to be paid back = capital + interest
7% of $850000
= (7/100)×$850000
= 0.07× $8500
= $59500
Amount to be paid back = $850000 + $59500
= $909500
Expected return on the investment = (capital + profit) - Amount to be paid back
= (850000 + 70000) - 909500
= 920000 - 909500
= $10500
As percentage
(Expected return on the investment/ Amount invested) × 100%
= (10500/85000)×100%
= 0.01235 × 100%
= 1.24%
2) The cost of financing the project
Cost of financing the project = capital + interest
7% of $850000
= (7/100)×$850000
= 0.07× $8500
= $59500
Cost of financing the project = $850000 + $59500
= $909500
As percentage
(Cost of financing the project/(capita + profit)) × 100%
= (909500/(850000 + 70000))×100%
=(909500/920000)×100%
= (0.9886) ×100%
= 98.86%
3) profitability index = (initial investment + net present value)/ initial investment
= (850000 + 70000)/850000
= 920000 / 850000
= 1.08
Since the profitability index is greater than 1, it means the investment creates value therefore the investor can continue with the investment
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Fixed manufacturing overhead costs are expensed as units sold as part of cost of goods sold under costing, and expensed in full with period costs under costing. True or false?.
It is true that fixed manufacturing overhead costs are expensed as units sold as part of cost of goods sold under absorption costing, and expensed in full with period costs under variable costing.
What is absorption costing?Total absorption costing is a way of accounting that includes all costs associated with producing a good or rendering a service. TAC takes into account all manufacturing overheads in addition to the expenses of labor and materials. Each cost center has a direct cost and an indirect cost.
What is variable costing?A cost concept in managerial accounting is variable costing. The cost of manufacturing overhead is incurred using this method as a product is being produced. The problem of absorption costing, which enables income to increase as production increases, is addressed by this. Managers are given the data they need to create a contribution margin income statement by variable costing, which paves the way for more efficient cost-volume-profit (CVP) analysis.
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griffin service company, incorporated, was organized by bennett griffin and five other investors (that is, six in total). the following activities occurred during the year: received $90,000 cash from the six investors; each investor was issued 10,400 shares of common stock with a par value of $0.20 per share. signed a five-year lease for $180,000 for the right to use a building each year. purchased equipment for use in the business at a cost of $38,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). signed an agreement with a cleaning service to pay $320 per week for cleaning the corporate offices next year. received an additional contribution from investors who provided $5,000 in cash and land valued at $35,000 in exchange for 3,000 shares of stock in the company. lent $4,500 to one of the investors, who signed a note due in six months. bennett griffin borrowed $9,000 for personal use from a local bank, signing
The recording of the transactions in T-accounts for Griffin Service Company Incorporated is as follows.
Cash AccountAccount Titles Debit Credit
Common stock $12,480
Equipment $9,500
Additional Paid-in Capital $77,520
Common Stock $600
Additional Paid-in Capital $4,400
Note Receivable $4,500
Common StockAccount Titles Debit Credit
Cash $12,480
Cash $600
Additional Paid-in CapitalAccount Titles Debit Credit
Cash $77,520
Cash $4,400
Lease AssetsAccount Titles Debit Credit
Lease Liability $180,000
Lease LiabilityAccount Titles Debit Credit
Lease Assets $180,000
EquipmentAccount Titles Debit Credit
Cash $9,500
Note Payable $28,500
Note PayableAccount Titles Debit Credit
Equipment $28,500
LandAccount Titles Debit Credit
Additional Paid-in Capital $35,00
Note ReceivableAccount Titles Debit Credit
Cash $4,500
What are T-accounts?T-accounts is an accounting term to describe ledger accounts.
Ledger accounts summarize business transactions posted from the journal according to account classifications.
Transaction Analysis:Cash $90,000 Common stock $12,480 Additional Paid-in Capital $77,520
Lease Assets $180,000 Lease Liability $180,000
Equipment $38,000 Cash $9,500 Note Payable $28,500
Cash $5,000 Land $35,000 Common Stock $600 Additional Paid-in Capital $39,400
Note Receivable $4,500 Cash $4,500
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Question Completion:Record the effects of the transactions in the appropriate T-accounts.