Answer:
False
Explanation:
Marginal cost of capital is the total cost of debt and equity which is used to fund business operations. This denotes any additional capital raised to fund the business. If the capital structure has retained earnings of 70% and marginal cost of capital is $50,000. This means the additional cost to raise the fund will be $50,000.
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.27 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio
Answer:
the beta be for the other stock in your portfolio is 1.73
Explanation:
The computation of the beta be for the other stock in your portfolio is shown below:
Given that
risk free asset contains the beta of 0
And,
market beta = 1
Now
1 = 1 ÷ 3 × 0 + 1 ÷ 3 × 1.27 + 1 ÷ 3 × beta
The beta of other stock = 1.73
hence, the beta be for the other stock in your portfolio is 1.73
Here we assume that one-third should be invested in all 3 things each
The cash account for Feldman Company contains the following information for April:
Cash balance, 3/31 $14,685
Cash received during April 55,680
70,365
Cash disbursements during April:
Cheque 7164 $33,500
Cheque 7165 11,250
Cheque 7166 18,750
Cheque 7167 900 64,400
Cash balance, 4/30 $5,965
The bank statement for April contains the following information:
Bank balance, 3/31 $25,285
Add: Deposits during April 55,680
80,965
Less: Cheques paid during April:
Cheque 7162 $8,900
Cheque 7163 1,700
Cheque 7164 33,500
Cheque 7165 11,250 55,350
Bank balance, 4/30 $25,615
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The ending retained earnings balance of Juan's Mexican Restaurant chain increased by $6.9 million from the beginning of the year. The company declared a dividend of $2.4 million during the year. What was the amount of net income during the year
Answer:
the amount of net income during the year is $9.3 million
Explanation:
The computation of the net income is shown below:
= Increased in the retained earnings + dividend declared
= $6.9 million + $2.4 million
= $9.3 million
Hence, the amount of net income during the year is $9.3 million
The same should be considered and relevant
The primary purpose of finance is to __________. a.) pay off debt as quickly as possible b.) keep track of a business's cash flow c.) study the effects of the economy on businesses d.) manage assets in a way that maximizes returns
Answer: d.) manage assets in a way that maximizes returns
Explanation:
Finance refers to the activities which are associated with debt, credit, investment, banking, capital markets, etc.
Finance has to do with the management of money and the acquisition of needed funds. The primary purpose of finance is to manage assets in a way that maximizes returns.
s). Marty has been offered an injury settlement of $15 comma 000 payable in 5 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 3.5 %. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 7.5 %? What if it is 11.5 %?
Answer and Explanation:
The computation of the present value in each situation is as follows:
As we know that
Present value = Future value ÷ (1 + rate of interest)^time period
When the rate is 3.5%, the present value is
= $15,000 ÷ (1 + 3.5%)^5
= $12,630
When the rate is 7.5%, the present value is
= $15,000 ÷ (1 + 7.5%)^5
= $10,448.38
And, When the rate is 11.5%, the present value is
= $15,000 ÷ (1 + 11.5%)^5
= $8,703.96
Recording the adopted budget Following is a summary of the operating budget adopted by Westchester County, New York for the calendar year 2017. The actual budget document is almost 750 pages, so the summary is highly condensed.
Prepare the journal entry to record the budget, assuming that the detail will be separately recorded. Estimated revenues and other sources:
Real property taxes $ 548,423,468
Sales tax 517,559,000
Federal and state aid 433,229,570
Departmental income 151,405,650
Other revenues 159,394,093
Total estimated revenues 1,810,011,781
Appropriated previously accumulated fund balance 15,000,000
Total estimated revenues and other sources $1,825,011,781
Appropriations: General government and support $ 49,275,122
Home and community services 614,816,681
Health services 149,224,687
Education 29,833,371
Public safety, corrections, courts 223,582,214
Roads, transportation, parks facilities 217,729,956
Miscellaneous and fixed 540,549,750
Total appropriations $1,825,011,781
Prepare the journal entry to record the budget, assuming that the detail will be separately recorded.
Answer:
Dr Real property taxes $548,423,468
Dr Sales tax $517,559,000
Dr Federal and state aid $433,229,570
Dr Departmental income $151,405,650
Dr Other revenues $159,394,093
Dr Budgetary fund balance $15,000,000
Cr General government and support $49,275,122
Cr Home and community services $614,816,681
Cr Health services $149,224,687
Cr Education $29,833,371
Cr Public safety, corrections, courts $223,582,214
Cr Roads, transportation, parks facilities $217,729,956
Cr Miscellaneous and fixed $540,549,750
Explanation:
Preparation of the journal entry to record the budget
Dr Real property taxes $548,423,468
Dr Sales tax $517,559,000
Dr Federal and state aid $433,229,570
Dr Departmental income $151,405,650
Dr Other revenues $159,394,093
Dr Budgetary fund balance $15,000,000
Cr General government and support $49,275,122
Cr Home and community services $614,816,681
Cr Health services $149,224,687
Cr Education $29,833,371
Cr Public safety, corrections, courts $223,582,214
Cr Roads, transportation, parks facilities $217,729,956
Cr Miscellaneous and fixed $540,549,750
(To record budget)
Kathy plans to move to Maryland and take a job at McCormick as the Assistant Director of HR. She and her husband Stan plan to buy a house in Garrison, MD and their budget is $500,000. They have $100,000 for the down payment and McCormick will pay for closing costs. They are considering either a 30-year mortgage at 4.5 percent annual rate or a 15 year mortgage at 4 percent.
Required:
Calculate the monthly payment for each using the PMT function.
Answer:
Total budget = $500,000
Down payment = $100,000
Loan amount = $400,000
Case 1
Annual rate = 4.5%
Number of payment = (30*12 month) 360
Loan amount = $400,000
Monthly payment = PMT(Rate, Nper, Value of loan)
Monthly payment = PMT(4.5%, 360, 400,000)
Monthly payment = $2,026.74
Case 2
Annual rate = 4%
Number of payment = (15*12 month)180
Loan amount = $400,000
Monthly payment = PMT(Rate, Nper, Value of loan)
Monthly payment = PMT(4%, 180, 400,000)
Monthly payment = $2,958.75
You are bullish on Telecom stock. The current market price is $62 per share, and you have $6,200 of your own to invest. You borrow an additional $6,200 from your broker at an interest rate of 7.6% per year and invest $12,400 in the stock. a. What will be your rate of return if the price of Telecom stock goes up by 9% during the next year? (Ignore the expected dividend.) (Round your answer to 2 decimal places.)
Answer:
Telecom Stock
If the price of the Telecom stock goes up by 9% during the next year, your rate of return will be:
= 10.4%
Explanation:
a) Data and Calculations:
Current market price = $62 per share
Investment in stock = $12,400
Margin account = $6,200
Loan = $6,200 ($12,400 - $6,200)
Units of stock bought on margin = 200 ($12,400/$62)
Margin account interest rate = 7.6%
Growth rate of stock price = 9%
Expected market price of the stock = $67.58 ($62 * 1.09)
Expected value of stock = $13,516 (200 * $67.58)
Interest on loan = $471.20 ($6,200 * 7.6%)
Principal & loan amount $12,400
Return on the stock = $644.80
Rate of return = 10.4% ($644.80/$6,200 * 100)
Which strategies is suggested to help build strong interpersonal business relationships?
Answer and Explanation:
Gain trust: Business relationship is sealed with trust. If you are able to make a business partner trust you, you are sure to keep doing business with them. Do not try to take advantage of them and be sure they ate not thinking in that direction.
Show interest in people: keeping up with people and always showing that you actually care, and want to assist in any way you can is a sure way to seal a client for life. Be family.
Work hard: you can not build business relationships if you are not a person that delivers. It doesn't matter if you are a nice person that always cares, if you cannot bring results and be trusted to deliver you cannot have any useful business relationship. This is the most important strategy.
Networking: networking is a popular form of building business relationships. Formal occasions, conferences, informal hangout spots, the gym are all places where you can meet new people and start a business relationship.
1.8 Advise businesses on FIVE ways in which professional, responsible, ethical and
effective business practice should be conducted.
Answer:
Explanation:
There are various ways in which professional, responsible, ethical and
effective business practice should be conducted. Five of them are:
1. Payment of fair wages and salaries to employees
2. Equal treatment among workers
3. Accountability and responsibility on business decisions made from top to bottom or managers to workers
4. Provision of quality goods and services to the masses
5. Transparency, including adequate internal controls, monitoring, and evaluation.
Telecommuters are not key to a business continuity plan (BCP) because they work from remote locations. Therefore, any disruptions would not affect them. True
Answer:
This false
Explanation:
A telecommuter is a remote worker that does his or her job from home and when it is time to have communications with their office, they do so through emails, fax, phone or the internet. the BCP is the ability of the organization to continue with its services and production even after a disruption occurred in the business.
A disruption in the business is capable of affecting the telecommuter too. Working remotely does not make their job less important
In 20X4, Bosh Corporation had income of $60,000 using absorption costing. Beginning and ending inventories were 13,000 and 8,000 units, respectively. The fixed manufacturing overhead cost was $4.00 per unit. What was the net income using direct/variable costing
Answer:
Net income under variable costing $80,000
Explanation:
The computation of the net income using direct/variable costing is shown below:
Net income under absorption costing $60,000
Add fixed cost under applied $20,000
Net income under variable costing $80,000
Working
Beginning inventory 13000
Less ending inventory -8000
Decrease in inventory 5000
Now under applied inventory $20,000
Sunland Company reported a net profit of $8.15 per share and a dividend of $3.50 per share. If you buy shares of the stock at $94.85 per share, what is your dividend yield
Answer:
The answer is "[tex]3.69\%[/tex]"
Explanation:
Dividend Share [tex]= \$3.50[/tex]
stock purchasing Price[tex]= 94.85[/tex]
[tex]\text{Dividend yield} = \frac{Dividend}{Purchase price}\\\\[/tex]
[tex]=\frac{3.50}{94.85}\\\\=0.036900369 \approx 3.69\%[/tex]
Steve borrowed $750 for a new dresser. He made 9 monthly payments to repay the loan. He paid $45 interest. What is his simple interest rate?
Answer:
222
Explanation:
Since its formation, Roof Corporation has incurred the following net Section 1231 gains and losses. Year 1$(12,000)Net Section 1231 loss Year 2 10,500 Net Section 1231 gain Year 3 (14,000)Net Section 1231 loss In year 5, Roof sold one asset and recognized a $9,000 net Section 1231 gain. How much of this gain is treated as capital, and how much is ordinary
Answer:
a. $0 will be reported as capital gain, while $7,500 will be reported as ordinary gain.
b. $1,000 will be reported as capital gain, while $8,000 will be reported as ordinary gain.
Explanation:
Note: This question is not complete as part 'a' of the requirement is omitted. The complete question with the part 'a' of the requirement is therefore provided before answering the question as follows:
Since its formation, Roof Corporation has incurred the following net Section 1231 gains and losses.
Year 1 $ (12,000) Net Section 1231 loss
Year 2 10,500 Net Section 1231 gain
Year 3 (14,000) Net Section 1231 loss
a. In year 4, Roof sold one asset and recognized a $7,500 net Section 1231 gain. How much of this gain is treated as capital, and how much is ordinary?
b. In year 5, Roof sold one asset and recognized a $9,000 net Section 1231 gain. How much of this gain is treated as capital, and how much is ordinary?
Explanation of the answer is now provided as follows:
When section 1231 losses exceed section 1231 profits in the prior five years, the excess loss (unapplied loss) is applied against the current year's section 1231 gain.
The amount that is reported as ordinary income is the amount of the loss that is applied against the current year's section 1231 gain.
Long-term capital gain is the excess of the current year's section 1231 gain over the the recaptured section 1231 loss from the prior five years.
You have to start with the earliest year to apply section 1231 losses from the previous five years to the current year's section 1231 gain.
Therefore, we have:
a. In year 4, Roof sold one asset and recognized a $7,500 net Section 1231 gain. How much of this gain is treated as capital, and how much is ordinary?
As a result of the loss from the previous year that is applied to the extent of $7,500, the whole of the $7,500 net Section 1231 gain will be recorded as ordinary gain.
Therefore, $0 will be reported as capital gain, while $7,500 will be reported as ordinary gain.
b. In year 5, Roof sold one asset and recognized a $9,000 net Section 1231 gain. How much of this gain is treated as capital, and how much is ordinary?
Unapplied losses in previous years can be calculated as follows:
Details Amount ($)
Net Section 1231 loss in Year 3 (14,000)
Net Section 1231 gain in Year 4 7,500
Net Section 1231 loss in Year 1 (12,000)
Net Section 1231 gain in Year 2 10,500
Unapplied losses in previous years (8,000)
Because there are unapplied losses of $8,000 from previous years, $8,000 will be reported as ordinary gain.
Therefore, the amount to be reported as capital gain can be calculated as follows:
Amount to be reported as capital gain = Gain in Year 5 – Amount to be reported as ordinary gain = $9,000 - $8,000 = $1,000
Therefore, $1,000 will be reported as capital gain, while $8,000 will be reported as ordinary gain.
A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: __________
a. shift to the right, increasing the price of the drug.
b. shift to the left, increasing the price of the drug.
c. shift to the right, decreasing the price of the drug
d. shift to the left, decreasing the price of the drug.
Answer:
c
Explanation:
As a result of an increase in efficiency in production, there would be an increase in supply. As a result, there would be an outward shift of the supply curve. When the supply curve shifts outward, supply increases and prices of drugs fall.
On the other hand, if there is an inward shift of the supply curve, the supply of drugs would fall and the price of drugs would increase
Please check the attached image showing a graph of a decrease in supply
Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facility or investment.
a. True
b. False
Answer:
a. True
Explanation:
A manager can be defined as an individual who is saddled with the responsibility of providing guidance, support, supervision, administrative control, as well as acting as a role model or example to the employees working in an organization by being morally upright. Thus, he or she supervises and ensures his subordinates (employees) are working effectively and efficiently with the organization's goals and objectives.
Generally, managers working in international businesses are expected to evaluate the attractiveness of a country as a market or location for a facility or investment before going ahead to the endorse and approve it for any business having long-term plan, goals and objectives in mind.
Some examples of the factors a manager should look out for in determining the attractiveness of a country includes freedom of expression, government policies, power supply, taxation, ease of doing business, climate, etc.
When using process costing, nonmanufacturing costs are ______.
a) included as part of the cost of the product
b) expensed during the period
c) incurred ignored treated as part of conversion costs
Answer:
b) expensed during the period
Explanation:
Process costing can be defined as a cost accounting method used for assigning manufacturing or production costs to the units of goods produced by a business firm over a specific period of time. It is mostly used by firms that produce a large quantity of homogeneous or similar products on a continuous basis.
Typically, process costing uses more than one Work in Process Inventory account because costing is done at each stage of the production or manufacturing process.
Generally Accepted Accounting Principles (GAAP) can be defined as the set of commonly used accounting standards in the U.S.
This ultimately implies that, the United States of America, Generally Accepted Accounting Principles (GAAP) is the accounting principles, procedures and standard issued by the Financial Accounting Standards Board (FASB) and adopted by the United States of America, Securities and Exchange Commission (SEC).
Under U.S Generally Accepted Accounting Principles (GAAP), when using process costing, non-manufacturing (administrative and selling) costs are expensed on the income statement of the company during the accounting period they were incurred.
Answer:
b) expensed during the period
Explanation:
When using process costing, nonmanufacturing costs are expensed during the period.
The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 21 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid its annual dividend in the amount of $2.80 per share. What is the current value of one share of this stock if the required rate of return is 8.30 percent?a. $153.71b. $138.82c. $193.77d. $156.51e. $190.97
Answer:
a. $153.71
Explanation:
First, calculate the yearly dividend
First-year dividend = $2.80 x ( 1 + 21% ) = $3.388
Second-year dividend = $3.388 x ( 1 + 21% ) = $4.099
Third-year dividend = $4.099 x ( 1 + 21% ) = $4.960
Fourth-year dividend = $4.960 x ( 1 + 21% ) = $6.002
Now calculate hte terminal value of the dividend payment after 4 years
Terminal value = Fourth year dividend x ( 1 + Growth rate after year 4 ) / ( Required rate of return - Growth rate after year 4 ) = $6.002 x ( 1 + 5% ) / ( 8.30% - 5% ) = $190.97
Now use the following fromula to calcula the value of the bond
Value of the bond = ( First-year dividend / ( 1 + Required rate of return )^1 ) + ( Second-year dividend / ( 1 + Required rate of return )^2 ) + ( Third-year dividend / ( 1 + Required rate of return )^3 ) + ( Fourth-year dividend / ( 1 + Required rate of return )^4 ) + ( Terminal Value / ( 1 + Required rate of return )^4 )
Value of the bond = ( $3.388 / ( 1 + 8.3% )^1 ) + ( $4.099 / ( 1 + 8.3% )^2 ) + ( $4.960 / ( 1 + 8.3% )^3 ) + ( $6.002 / ( 1 + 8.3% )^4 ) + ( $190.97 / ( 1 + 8.3% )^4 )
Value of the bond = $3.128 + $3.495 + $3.905 + $4.363 + $138.820
Value of the bond = $153.711
Value of the bond = $153.71
Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Liabilities of $102.335 million Cash of $8.040 million Total Assets of $165.097 million Retained Earnings of $35.132 million. What was the Digby Corporation's common stock
Answer:
$27.63 million
Explanation:
Total equity = Common stock + Retained earnings
Common stock = Total equity - Retained earnings
Common stock = (Total assets - Total liabilities) - Retained earnings
Common stock = ($165.097 million - $102.335 million) - $35.132 million
Common stock = $62.762 million - $35.132 million
Common stock = $27.63 million
Establishing ________ pertaining to apprenticeship standards, union member tasks, and which job duties union members would be required to do was one of the most important activities of the AFL.
Answer:
work rules.
Explanation:
In the United States of America, the American Federation of Labor (AFL) was established by union members as an association or umbrella body for trade unions on the 8th of December, 1886 in Columbus, Ohio. It was formed due to the dispute that arose with craft unions while they were still part of the Knights of labour.
Establishing work rules pertaining to apprenticeship standards, union member tasks, and which job duties union members would be required to do was one of the most important activities of the AFL.
A production process consists of a three step operation. The scrap rate is 10% for the first step and 6 percent for each of the other two steps.
a. If the desired daily output is 450 units, how many units must be started to allow for loss due to scrap?
b. If the scrap rate for each step could be cut in half, how many units would this save in terms of the scrap allowance?c. If the scrap represents a cost of $10 per unit, how much is it costing the company per day for the original scrap rate?
Answer:
a. The number of units that must be started to allow for loss due to scrap is 566 units.
b. The number of units that this would save in terms of the scrap allowance is 63 units.
c. The scrap is costing the company $1,160 per day.
Explanation:
a. If the desired daily output is 450 units, how many units must be started to allow for loss due to scrap?
Let x represent the original quantity.
Therefore, we have:
Scrap from the first step operation = 0.10x
Remaining quantity after the first step operation = Original quantity - Scrap of the first step operation = x – 0.10x = (1 – 0.10)x = 0.90x
Scrap from the second step operation = Remaining quantity after the first step operation * 0.06 = 0.90x * 0.06 = 0.054x
Remaining quantity after the second step operation = Remaining quantity after the first step operation - Scrap from the second step operation = 0.90x - 0.054x = (0.90 - 0.054)x = 0.846x
Scrap from the third step operation = Remaining quantity after the second step operation * 0.06 = 0.846x * 0.06 = 0.05076x
Remaining quantity after the third step operation = Remaining quantity after the second step operation - Scrap from the third step operation = 0.846x - 0.05076x = (0.846 - 0.05076)x = 0.79524x
Since the desired daily output is 450 units, we can solve for x as follows:
0.79524x = 450
x = 450 / 0.79524 = 565.866908103214, or 566 units
Therefore, the number of units that must be started to allow for loss due to scrap is 566 units.
b. If the scrap rate for each step could be cut in half, how many units would this save in terms of the scrap allowance?
Scrap rate of first operation is = 10%/2 = 5%, or 0.05
Scrap rate of second and third operations = 6%/2 = 3%, or 0.03 each
Let x also represent the original quantity.
Therefore, we have:
Scrap from the first step operation = 0.05x
Remaining quantity after the first step operation = Original quantity - Scrap of the first step operation = x - 0.05x = (1 – 0.05)x = 0.95x
Scrap from the second step operation = Remaining quantity after the first step operation * 0.03 = 0.95x * 0.03 = 0.0285x
Remaining quantity after the second step operation = Remaining quantity after the first step operation - Scrap from the second step operation = 0.95x - 0.0285x = (0.95 - 0.0285)x = 0.9215x
Scrap from the third step operation = Remaining quantity after the second step operation * 0.03 = 0.9215x * 0.03 = 0.027645x
Remaining quantity after the third step operation = Remaining quantity after the second step operation - Scrap from the third step operation = 0.9215x - 0.027645x = (0.9215 - 0.027645)x = 0.893855x
Since the desired daily output is 450 units, we can solve for x as follows:
0.893855x = 450
x = 450 / 0.893855 = 503.437358408243, or 503 units
Number units to save = Calculated x from part a above - Calculated x in part 2 here = 566 – 503 = 63
Therefore, the number of units that this would save in terms of the scrap allowance is 63 units.
c. If the scrap represents a cost of $10 per unit, how much is it costing the company per day for the original scrap rate?
Quantity to be introduced at the original scrap rate = Calculated x from part a above = 566
Remaining quantity after the third step operation = 450
Scrap = Quantity to be introduced at the original scrap rate - Remaining quantity after the third step operation = 566 – 450 = 166 units
Total cost of scrap = Scrap * Cost of each unit of scrap = 166 * $10 = $1,160
Therefore, the scrap is costing the company $1,160 per day.
Mendez Company is considering a capital project that costs $16,000. The project will deliver the following cash flows: Year 1 Year 2 Year 3 Year 4 Year 5 $8,000 $6,000 $5,000 $6,000 $5,000 Using the incremental approach, the payback period for the investment is:
Answer:
2.4 years
Explanation:
Years Cash Cumulative Cashflow
1 8000 8000
2 6000 14000
3 5000 19000
4 4000 25000
5 5000 30000
30000
Payback period = 2 years + (16,000 - 14,000) / 5,000
Payback period = 2 years + 0.4 years
Payback period = 2.4 years
Your Company is considering a new project that will require $100,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and will be depreciated to a book value of $5,000 using straight-line depreciation. The cost of capital is 14%, and the firm's tax rate is 30%. Estimate the present value of the tax benefits from depreciation.
Answer:
14865.93
Explanation:
Calculation to Estimate the present value of the tax benefits from depreciation.
First step is to calculate the Annual depreciation expense
Annual depreciation expense = [100000 - 5000]/10
Annual depreciation expense = 9500
Second step is to calculate the Tax benefit
Tax benefit = 9500(.30)
Tax benefit = 2850
Now let calculate the PV of tax benefit
Using financial calculator
PMT = 2850
FV = 0
N = 10
i = 14
PV=?
Hence
PV = 14865.93
Therefore the present value of the tax benefits from depreciation is 14865.93
An open-end fund has a net asset value of $12.70 per share. It is sold with a front-end load of 8%. What is the offering price? (Round your answer to 2 decimal places.)
Answer:
$13.80
Explanation:
Calculation to determine the offering price
Using this formula
Offering Price = NAV/1-load
Let plug in the formula
Offering Price = $12.70/1-0.08
Offering Price =$12.70/0.92
Offering Price = $13.80
Therefore the offering price is $13.80
A manager of a perfectly competitive firm observes that the marginal product of labor is 5 units per hour, the marginal product of capital is 40 units per machine, the wage is $20 per hour, the rental price of capital is $120 per machine, and the price of output is $5 per unit. Please complete the following statement.
To maximize profit, the manager should hire _________and __________
Answer:
The manager should hire more labor and rent less capital.
Explanation:
Given:
MPL = Marginal product of labor units per hour = 5
MPC = marginal product of capital units per machine = 40
PL = Wage per hour = $20, or 20
PC = Rental price of capital per machine = $120, or120
Po = Price of output per unit = $5
The condition for the profit maximization for a firm is as follows:
MPL / PL = MPC / PC ……………………………. (1)
From equation (1), we have:
MPL / PL = 5 / 20 = 0.25
MPC / PC = 40 / 120 = 0.33
Since 0.25 = MPL / PL < MPC / PC = 0.33, it implies that these conditions are NOT consistent with equation (1).
In order to maximize profit, more labor should be hired while less capital should be rented until these conditions are consistent with equation (1).
Therefore, we have:
To maximize profit, the manager should hire more labor and rent less capital.
list three steps you will take before granting credit to customers
Step 1: Ask the Customer to Submit a Credit Application.
Step 2: Check Business Credit Rating.
Step 3: Set Credit Limit and Repayment Terms.
Answer:
1. Credit Application from Your Customer. Your credit application doesn’t need to be complicated, but …
2. Bank and Trade References. Checking bank and trade references is a very common practice, and …
3. Check Business Credit Using Credit Bureaus. There are a number of commercial credit bureaus that …
Explanation:
The following information pertains to Trenton Glass Works for the year just ended.
Budgeted direct-labor cost: 70,000 hours (practical capacity) at $16 per hour
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing overhead: $997,500
Actual selling and administrative expenses: 439,000
Actual manufacturing overhead:
Depreciation $ 233,000
Property taxes 23,000
Indirect labor 80,000
Supervisory salaries 202,000
Utilities 58,000
Insurance 32,000
Rental of space 301,000
Indirect material (see data below) 79,000
Indirect material:
Beginning inventory, January 1 48,000
Purchases during the year 95,000
Ending inventory, December 31 64,000
Calculate the overapplied or underapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)
Answer:
Over-applied Overhead $134,000
Explanation:
The computation of the overhead applied or under applied overhead is given below:
Depreciation $233,000
Property tax $21,000
indirect labor $80,000
Supervisory salaries $202,000
utilities $58,000
Insurance $32,000
Rental of space $301,000
Indirect material $79,000
Total OH incurred $1,006,000
OH applied $1,140,000
(80000 hours at 14.25 per hour) ($997,500 ÷ 70,000)
Over-applied Overhead $134,000
define economic development
Answer:
developing the economy
Suppose that an investor buys a 100-share call option for $250. It has an exercise price of $60. The underlying price per share of the stock at expiration is $66. What then is the amount of profit or loss, ignoring brokerage fees
Answer:
$350
Explanation:
Call option is profitable when Stock price expires above the Strike price of the option.
Strike price of call = $60
Stock price at expiration = $66
Total profit = Size*(Stock price-Strike price) - Premium paid
Total profit = 100*($66-$60) - $250
Total profit = 100*$6 - $250
Total profit = $600 - $250
Total profit = $350
Thus, the amount of profit (ignoring brokerage fees) is $350.