Answer:
Option A ($149,000) is the correct alternative.
Explanation:
Given:
Factory insurance,
= $32,000
Indirect labor,
= $45,000
Production equipment rental costs,
= $72,000
Now,
The total manufacturing costs will be:
= [tex]Factory \ insurance+Indirect \ labor+Production \ equipment \ rental \ costs[/tex]
By putting the given values, we get
= [tex]32000+45000+72000[/tex]
= [tex]149,000[/tex] ($)
Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 186,000 in October, 194,500 in November, and 191,000 in December. Glaston assigns variable overhead at a rate of $0.70 per unit of production. Fixed overhead equals $143,000 per month. Compute the total budgeted overhead for October.
Answer:
Budgeted overhead (October)= $273,200
Explanation:
Giving the following information:
Production= 186,000 in October
Predetermined variable overhead= $0.70 per unit.
Fixed overhead equals $143,000 per month.
To calculate the budgeted overhead for October, we need to use the following formula:
Budgeted overhead (October)= 0.7*186,000 + 143,000
Budgeted overhead (October)= $273,200
Explain why a finance manager need to understand accounting information even if the firm has a trained accountant on its staff.
Answer:
Following are the solution to the given question:
Explanation:
A financial manager should understand adequate information on accountancy. This is irrespective of whether the business does have a trained counterpart.
Accountancy is a necessary input into the function of financial management. Throughout the extent, as accounts were important input in financial decision-making is closely connected with both the interaction between finance and financial.
Accrual analysis provides information mostly on the company's operations. The result of the accountancy is accounts like the income statement, the income statement, and the position financial adjustments report. The information in such statements helps money advisors assess a company's previous growth and career projections.
The purpose of accountancy in the choice process is to gather and provide financial data on the institution's past, present, and future activities.
During the economic transaction, the finance department uses these data. This is not possible for money advisors to collect data or to make choices from accounts. And an investor's primary focus is to collect data and display it, whereas budgeting, control, and judgment are the main job of a financial manager. In a sense, financial management starts at the end of accountancy.
Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,000 models. During the month, the company completed 11,000 models, and transferred them to the Distribution Department. The company ended the month with 1,500 models in ending inventory. There were 2,500 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs.
Required:
What were the equivalent units for conversion costs during October?
Answer:
11,125 units
Explanation:
Particulars Units
Beginning WIP (2500*0.75) 25% is completed 1,875
Units started and completed during the month 8500
[10,000 -1500 as ending Inventory]
Ending Inventory [1500*0.50] 750
Equivalent units 11,125
So, the equivalent units for conversion costs during October is 11,125 units
a sales rep, has just learned that she will be allowed to text with her colleagues and clients during work hours. What is the best advice you can give her to ensure that she is using this tool professionally
Answer:
Remember this is your workplaces, if you wouldn't do it in front of your boss, dont do it at all.
Explanation:
It can be very tempting to text or play on your phone while bored at work. It's best to put it away and use it only during lunch.
A manufacturer reports the information below for three recent years.
Year 1 Year 2 Year 3
Variable costing income 140,000 146,400 143,950
Beginning finished goods inventory (units) 0 2,200 1,700
Ending finished goods inventory (units) 2,200 1,700 1,800
Fixed manufacturing overhead per unit 1.20 1.20 1.20
Compute income for each of the three years using absorption costing.
Year 1 Year 2 Year 3
Absorption costing income
Answer:
Year 1
Fixed Overhead in ending inventory = (2,200 * $1.20) = $2,640
Year 2
Fixed Overhead in ending inventory = (1,700 * $1.20) = $2,040
Fixed overhead in beginning inventory = (2,200 * $1.20) = $2,640
Year 3
Fixed Overhead in ending inventory = (1,800 * $1.20) = $2,160
Fixed overhead in beginning inventory = (1,700 * $1.20) = $2,040
Absorption costing income
Particulars Year 1 Year 2 Year 3
Variable costing income $140,000 $146,400 $143,950
Fixed Overhead in ending inventory $2,640 $2,040 $2,160
Fixed overhead in beginning inventory $0 ($2,640) ($2,040)
Absorption costing income $142,640 $145,800 $144,070
what is least likely to get managers to act in best interest of the owner threat of a prozy fight stock option plans
Answer:
The least likely to get managers to act in the best interest of the owner is:
stock option plans.
Explanation:
But with the threat of a proxy fight, managers get up to speed, acting in the best interest of the owners of the firm because their jobs are at stake. The main purpose of a proxy fight is the removal of the current management of the firm. During a proxy fight, contest, or battle, some shareholders in a company attempt to oppose and vote out the current management or board of directors. On the other hand, stock option plans reward managers with employee ownership rights at discounted prices.
Determine: SHOW ALL WORK a. Predetermined factory overhead rate. $ b. Determine the factory overhead applied assume the actual direct labor hours for Job 50 was. 20000 and for J0b 51 was 24000 . $ c. Determine the balance in the factory overhead account assuming that the actual cost
Answer:
Note See complete question as attached as picture below
a. Predetermined factory overhead rate = Estimated factory overhead cost / Direct labr hours
Predetermined factory overhead rate = $1,750,000 / 500,000 hours
Predetermined factory overhead rate = $3.50 per direct labor hours
b. Particulars Amount
Job 50 (20,000*3.50) $70,000
Job 51 (24,000*3.50) $84,000
Factory overhead applied $154,000
c. Balance in factory overhead = $154,000 - $153,000
Balance in factory overhead = $1,000
d. Over-applied factory overhead = $1,000
Division of labor and specialization
Answer:
Division of Labour vs Specialization. Basically, both these concepts involve dividing the main process into different tasks, assigning each task to individual workers or group of workers. Thus, there is no significant difference between division of labour and specialization.
Explanation:
Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item were available for sale during the calendar year:
Jan. 1 Inventory 4,000 units at $40
Apr. 19 Sale 2,500 units
June 30 Purchase 4,500 units at $44
Sept. 2 Sale 5,000 units
Nov. 15 Purchase 2,000 units at $46
Required:
The firm uses the weighted average cost method with a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale.
Answer:
Cost of goods sold:
Apr. 19 = $100,000
Sept. 2 = $215,000
Inventory Balance on:
Apr. 19 = $60,000
Sept. 2 = $43,000
Explanation:
a) Data and Calculations:
Date Description Units Unit Price Inventory Cost of Sales
Jan. 1 Inventory 4,000 $40 $160,000
Apr. 19 Sale 2,500 $40 $60,000 $100,000
June 30 Purchase 4,500 $44 $258,000 ($44 * 4,500 + $60,000)
Sept. 2 Sale 5,000 $43 $43,000 $215,000
Nov. 15 Purchase 2,000 $46 $135,000 ($46 * 2,000 + $43,000)
On July 15, 2021, M.W. Morgan Distribution sold land for $41.0 million that it had purchased in 2016 for $26.0 million.
Required:
What would be the amount(s) related to the sale that Morgan would report in its statement of cash flows for the year ended December 31, 2021, using the direct method?
Answer:
$41.0 million
Explanation:
Calculation to determine the amount(s) related to the sale that Morgan would report in its statement of cash flows for the year ended December 31, 2021, using the direct method
DIRECT METHOD:
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash proceeds received from sale of land $41.0 million
Therefore the amount(s) related to the sale that Morgan would report in its statement of cash flows for the year ended December 31, 2021, using the direct method is $41.0 million
If the best surgeon in town is also the best at cleaning swimming pools, then according to economic reasoning, this person should
Answer:
specialize in being a surgeon because its opportunity cost is lower.
Explanation:
Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.
Assuming the best surgeon in town is considered to be the best at cleaning swimming pools, then from an economic perspective and reasoning, this person should specialize in being a surgeon because its opportunity cost is lower.
This ultimately implies that, the benefits, profits or value associated with cleaning swimming pools i(alternative forgone) is lower compared to what is obtainable from being a surgeon.
If nominal GDP is $1,200 billion and, on average, each dollar is spent five times in the economy over a year, then the quantity of money demanded for transactions purposes will be?
Choices
1,200
6,000
600
240
960
Out of the choices provided above, it can be concluded to state that the quantity of money demanded for transactions will be $6,000 if the conditions given above with respect to the nominal GDP are satisfied in an economic situation. Therefore, the option B holds true.
What is the significance of nominal GDP?The nominal GDP of an economy can be referred to or considered as the unit of measurement that is used to represent the final value of finished goods and services, where no adjustments for the prevailing inflation rates are taken into consideration.
The quantity of money demanded can be computed using the given nominal GDP's information as under,
Quantity of Money Demanded = Nominal GDP x Dollar Spending
Quantity of Money Demanded = 1200 × 5
Quantity of Money Demanded = $6,000
Therefore, the option B holds true and states regarding the significance of nominal GDP.
Learn more about nominal GDP here:
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For each transaction:
a. analyze the transaction using the accounting equation
b. record the transaction in journal entry form
c. post the entry using T-accounts to represent ledger accounts.
1. On May 15, DeShawn Tyler opens a landscaping company called Elegant Lawns by investing $7,000 in cash along with equipment having a $3,000 value in exchange for common stock.
2. On May 21, Elegant Lawns purchases office supplies on credit for $500.
3. On May 25, Elegant Lawns receives $4,000 cash for performing landscaping services.
4. On May 30, Elegant Lawns receives $1,000 cash in advance of providing landscaping services to a customer.
Answer:
Elegant Lawns
a. Analysis of transactions using the accounting equation:
1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000
2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000
b. Journal Entries:
Date Account Titles Debit Credit
1. May 15, Assets: Cash $7,000
Assets: Equipment $3,000
Equity: Common stock $10,000
2.
May 21, Assets: Office supplies $500
Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000
Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000
Equity: Service Revenue $1,000
c. T-accounts:
Cash
Date Account Titles Debit Credit
1. May 15 Common stock $7,000
3. May 25, Service revenue 4,000
4. May 30, Service revenue 1,000
Equipment
Date Account Titles Debit Credit
1. May 15 Common stock $3,000
Office Supplies
Date Account Titles Debit Credit
2. May 21, Accounts Payable $500
Common Stock
Date Account Titles Debit Credit
1. May 15 Cash $7,000
1. May 15 Equipment 3,000
Accounts Payable
Date Account Titles Debit Credit
2. May 21, Office supplies $500
Service Revenue
Date Account Titles Debit Credit
3. May 25, Cash $4,000
4. May 30, Cash 1,000
Explanation:
a) Data and Analysis with Accounting Equation:
1. May 15, Assets Cash $7,000 Equipment $3,000 Equity: Common stock $10,000
2. May 21, Assets: Office supplies $500 Liabilities: Accounts Payable $500
3. May 25, Assets: Cash $4,000 Equity: Service Revenue $4,000
4. May 30, Assets: Cash $1,000 Equity: Service Revenue $1,000
Suppose banks increase excess reserves by $ 471845 . If the reserve ratio is 12 percent, what is the maximum increase in the money supply
Answer:
$3,932,025.94
Explanation:
Multiplier = 1 / rr
Multiplier = 1 / Reserve ratio
Multiplier = 1 / 0.12
Multiplier = 8.3333
Increase in money supply = Multiplier * Increase in excess reserves
Increase in money supply = 8.3333 * $471,845
Increase in money supply = $3,932,025.94
So, the maximum increase in the money supply is $3,932,025.94.
Your sister just deposited $5,500 into an investment account. She believes that she will earn an annual return of 8.8 percent for the next 6 years. You believe that you will only be able to earn an annual return of 8 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 6 years
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
Irwin Company has budgeted direct labor hours for the coming three months as follows: July, 6,500 hours; August, 8,100 hours; and September, 8,300 hours. Manufacturing overhead is budgeted at $13,300 per month plus $3.30 per direct labor hour. What is the budgeted manufacturing overhead for August
Answer:
the budgeted manufacturing overhead for August is $40,030
Explanation:
The computation of the budgeted manufacturing overhead for August is shown below:
= Budgeted manufacturing overhead + direct labor hour rate × direct labor hours for august
= $13,300 + $3.30 × 8,100 hours
= $13,300 + $26,730
= $40,030
Hence, the budgeted manufacturing overhead for August is $40,030
Sheridan Corporation had 2020 net income of $798,000. During 2020, Sheridan paid a dividend of $2 per share on 33,200 shares of preferred stock. During 2020, Sheridan had outstanding 236,000 shares of common stock.
Required:
Compute Sheridan's 2020 earnings per share.
Answer:
$3.10 per share
Explanation:
Total preferred dividend = 33,200 shares * $2
Total preferred dividend = $66,400
Earning per share = (Net income - Preferred dividend) / Number of common stock outstanding
Earning per share = ($798,000 - $66,400) / 236,000 shares
Earning per share = $731,600 / 236,000 shares
Earning per share = $3.10 per share
Why are Americans dependent of what is produced in other countries
Answer:
Climate, resources, cheap labor and outsourcing of manufacturing jobs.
Explanation:
As a developed country, labor cost are higher in the US in comparison to most of world. US consumers expect best price for their money. So many manufacturers have moved overseas to keep labor cost low and make a better profit while satisfying their consumers. Then mass ship items to keep cost low. Also some produced can only be grown in climates that the US doesn't have. There are some resources the US have that others countries. The mineral gold is much more plentiful in Africa but is widely used in electronics. The US is a prime buyer of electronics.
The IPO process involves several entities, such as the issuing company, institutional investors, brokers, lawyers, regulators, retail investors, and an intermediary company. Consider the following IPO deal:
In 1999, Goldman Sachs Group and its partners, Sumitomo Bank Capital Markets Inc. and Kamehameha Activities Association, raised $3.6 billion its initial public offering in the United States and Canada. Goldman Sachs & Co., Bear Stearns & Co. Inc., Credit Suisse First Corporation, Lehman Brothers Inc., and J.P. Morgan Securities Inc. became some of the U.S. representatives the deal by entering into an agreement to sell a certain number Of shares to potential investors at a predetermined.
Identify one of the underwriters in the IPO deal described above.
a. J.P. Morgan Securities Inc.
b. Kamehameha Activities Association
Answer:
The IPO Process
One of the underwriters in the IPO deal described above is.
a. J.P. Morgan Securities Inc.
Explanation:
J.P. Morgan Securities Inc. and the following underwriters, Goldman Sachs & Co., Bear Stearns & Co. Inc., Credit Suisse First Corporation, and Lehman Brothers Inc. was involved in the Initial Public Offering (IPO) in 1999, where $3.6 billion was raised in the United States and Canada. An underwriter is a financial specialist, working closely with the issuing houses to determine the initial offering price of the securities. The underwriters usually buy the securities from the issuer and then sell them to investors using its distribution network.
A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.)
Required:
a. What is the bond's yield to maturity?
b. What is the bond's current yield?
c. What is the bond's capital gain or loss yield?
d. What is the bond's yield to call?
Answer:
A. 3.57%
B. 7.27%
C. 5.45%
Explanation:
a. Calculation to determine What is the bond's yield to maturity
Using this formula
SemiannualYTM=PMT+Par−Price÷N÷Par+Price/22
Where,
Par = $1,000
Annual payment = $1,000 x 8% = $80
Semiannual payment = $80 x 0.5 = $40
Price = $1,100
Call price = $1,040
Time to call = 5 years
Time to maturity = 20 years
Let plug in the formula
SemiannualYTM=$40+$1,000−$1,100÷20×2÷$
1,000+$1,100/2
SemiannualYTM=3.57%
b. Calculation to determine What is the bond's current yield
Using this formula
Current yield=Annual payment/price
Let plug in the formula
Current yield=80/1100
Current yield=7.27%
c. Calculation to determine What is the bond's capital gain or loss yield
Using this formula
Capital loss=Call price-Current price/Current price
Let plug in the formula
Capital loss=1040-1100/1100
Capital loss=5.45%
Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. Right after he achieves the utility-maximizing level of consumption of the two goods, the price of peanut butter falls. After he adjusts to this event, the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
Answer:
The marginal utility of peanut butter goes down and that of ice cream goes up.
Explanation:
The substitution effect states that when the price of a product falls, it will lead to a rise in the quantity demanded of the product as buyers will buy more of the product that is now relatively cheaper.
And as more of a good is bought, its marginal utility falls. And as less of a product is bought, its marginal utility increases.
Based on the above explanation therefore, the marginal utility of peanut butter goes down and that of ice cream goes up after Kawamura adjusts to the event.
This is because as more of peanut butter is bought due to the fall in its price, its marginal utility falls. And as less of ice cream is bought as it is now relatively more expensive, its marginal utility increases.
____________- allows more than one variable at a time to be changed, and it takes into account the probabilities of changes in the key variables.
Answer:
scenario analysis
Explanation:
scenario analysis estimates changes that would result from a hypothetical change in the market or a reoccurrence of an historical event.
types of scenario analysis
1. historical scenarios : scenarios measure an hypothetical change that would result from a repeat of a particular period of financial history.
2. Hypothetical scenarios : scenarios have never occurred and are just conjured for the sake of analysis.
Sensitivity measures the impact of the change of one variable.
While on a trip to South Africa, Madison was impressed with the colorful woven outdoor placemats, floor mats, chair cushions, and umbrellas that local artisans were weaving. Upon returning to the United States, she was confident that U.S. consumers would be as intrigued by these accessories as she was. Madison decided to explore the possibility of starting an import business to bring these products to the United States. Which statement seems to be good advice for Madison?
Answer: A) Learn from others who import goods from abroad, and particular from Africa.
Explanation:
Nothing beats experience when it comes to acquiring knowledge so if Madison wants to acquire the knowledge necessary to bring the goods she saw in South Africa to the U.S., she should go to people who have experience in the matter and find out what they know.
This will giver her insight on the amount of money she needs to startup with as well as what business status she should have. They will also give her insight into cost cutting measures to enable her import with more efficiency and make more profit.
Kentucky Corporation uses a process-cost accounting system. The company adds direct materials at the start of its production process; conversion cost, on the other hand, is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?
A. Materials, 40%; conversion cost, 40%.
B. Materials, 40%; conversion cost, 100%.
C. Materials, 100%; conversion cost, 40%.
D. Materials, 100%; conversion cost, 60%.
E. Materials, 100%; conversion cost, 100%.
Answer:
The following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory:
D. Materials, 100%; conversion cost, 60%.
Explanation:
The above is actually the best option which would be used to calculate the correct number of equivalent units in the ending work-in-process inventory.
On June 1, 2018, Crane Company and Cheyenne Company merged to form Ayayai Inc. A total of 876,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 637,000 shares of stock for cash. All 1,513,000 shares were outstanding on December 31, 2020. Ayayai Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 44 shares of common at any interest date. None of the bonds have been converted to date. Ayayai Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,491,000. (The tax rate is 20%.)
Determine the following for 2020.
(a) The number of shares to be used for calculating:
(1) Basic earnings per share
(2) Diluted earnings per share
(b) The earnings figures to be used for calculating:
(1) Basic earnings per share
(2) Diluted earnings per share
Answer:
A-1 Basic earnings per share=$1,353,750
A-2 Diluted earnings per share = 2,136,650
B-1 Basic earnings per share $1,491,000
B-2 Diluted earnings per share= $1,510,200
Explanation:
(a)Calculation of number of shares to be used for calculating
(1) Basic earnings per share = (876,000*3/12) + (1,513,000*9/12)
Basic earnings per share=$219,000+$1,134,750
Basic earnings per share=$1,353,750
Therefore Basic earnings per share is $1,353,750
(2) Diluted earnings per share = (876 000*3/12) (1,513,000*3/12) + (1,513,000 + ($600000/$1000 * 44)
Diluted earnings per share =219,000+378,250+(1,513,000+26,400)
Diluted earnings per share =219,000+378,250+1,539,400
Diluted earnings per share = 2,136,650
Therefore Diluted earnings per share is 2,136,650
(b) Calculation of earnings figures to be used for
(1) Calculation to determine the Basic earnings per share
Using this formula
Basic earnings per share = Net income after tax
Let plug in the formula
Basic earnings per share= $1,491,000
Therefore Basic earnings per share is $1,491,000
(2) Calculation to determine Diluted earnings per share
First step is to calculate the interest expense after tax adjustment
Interest Savings ($600000 * 8% * ½) $24000
Additional Tax ($24000 * 20%) $4800
Interest expense after tax adjustment $19,200
Now let calculate the Diluted earnings per share
Using this formula
Diluted earnings per share = Net income + interest expense after tax adjustment
Let plug in the formula
Diluted earnings per share= $1,491,000 +$19,200
Diluted earnings per share= $1,510,200
Therefore Diluted earnings per share is $1,510,200
Eric, a ghost writer, conducted market research and discovered a niche market in writing scripts for corporate online videos. He also knows now the market will bear $250 per script. What question should he ask next about placement of his marketing mix
Answer: What is the best way to get his service to his target customers
Explanation:
Market research is the process of determining how viable a product will be after research has been conducted in the market. This is vital in getting opinions of customers.
Marketing mix are the marketing tools which an organization can use in order to pursue its marketing objectives.
The question that should be asked about the marketing mix placement is "What is the best way to get his service to his target customers". This is vital in knowing the best method to use in making the product available to the customers.
You own a golf course in Florida and you need to determine how many golf carts you need to buy to maximize profits. Please answer the following questions given the information below.
A brand new golf cart costs 2000 rounds of golf and the rate of depreciation is 5%.
The real interest rate is 8%
The expected marginal product of capital is given by MPKf = 1000 – 10K.
a) What is the user cost of capital and what is it expressed in?
b) How many golf carts should you buy to maximize profits (i.e., what is K*)?
c) Draw a graph (the uc / MPK graph) depicting the state of affairs and label this initial profit maximizing point as point A.
Now suppose the (local) government with all their financial shortfalls embarks on a campaign to raise revenue to fund the fire department by imposing a so-called "luxury tax" (we know it as τ) equal to 15% of gross revenue. What happens to the profit maximizing number of golf carts? Please show all work and round to two decimal places.
Answer:
a) 260 rounds of golf
b) 74
c) attached below
d) 70 golf carts
Explanation:
a) Calculate the user cost of capital and what is it expressed in
user cost of capital = total depreciation + total interest
= ( rate of depreciation * Golf cart cost ) + ( real interest rate * Golf cart cost )
= ( d + r ) Golf cart cost
= ( 0.05 + 0.08 ) 2000 = 260 rounds of golf
b) determine the number of carts that should be bought to maximize profits
Profits are maximized when User Cost of capital = MPKF
(d +r) Golf cart cost = MP Kf = 1000 – 10K
( 0.05 + 0.08 ) 2000 = 1000 – 10K
260 = 1000 – 10K ∴ K = ( 1000 - 260 ) / 10 = 74
c) attached below is the required graph
d) Determine what happens to the profit maximizing number of golf carts
User cost of capital ( 1 - t ) = MPK^f
∴ User cost of capital ( 1 - t ) = 1000 – 10K
260 ( 1 - 0.15 ) = 1000 – 10K
305.88 = 1000 – 10K
K=69.41
that is approximately 70 golf carts is been bought to maximize profit
Heavy use of long-term debt can be of benefit to a firm to help expand, although it adds to the firm's overall level of risk.
A. True
B. False.
Answer:
A
Explanation:
Long term debt is debt that has a maturity that is longer than a year.
The higher the use of debt, the higher the risk a firm takes on. This is because the greater the use of debt, the higher the chances of the firm defaulting on debt.
firms that use a high amount of debt, have an higher beta. As a result of the higher beta, the required return is also higher.
use of long-term debt provides firms with the necessary cash flows that would be needed to carry out necessary projects. Thus, it benefits a firm by helping it expand
) For humanitarian reasons, Taco Loco decides they would rather make product X than product Y. The dollar amount that they can both increase the price of Y and reduce the price of X by to accomplish this reversal of demand is
Answer:
81.80 cents.
Explanation:
Taco Laco should produce Y but should not produce X. The product X is not beneficial for Taco Laco. If the company decides to reduce the price of product X by 0.82 cents then its optimal product mix will contain zero units of X.
Vertical analysis can best be described as a technique for analyzing the percentage change in individual financial statement line items from one accounting period to the next.
a. True
b. False
Answer:
False
Explanation:
Vertical analysis can be regarded as accounting tool which gives room for
proportional analysis of some documents. This document is usually
financial statements.In carrying out vertical analysis, all the item line that is on the financial statement is been recorded as percentage of another item. Instance of this is an income statement.