Apple's $3 billion acquisition of Beats Electronics and Beats Music in 2014 allowed Apple to enter the headphones and streaming music industries, leveraging Beats' expertise and customer base. This acquisition helped Apple diversify its product offerings and revenue streams.
Explanation:Apple's $3 billion acquisition of Beats Electronics and Beats Music in 2014 was an attractive strategy option for entering promising new industries in headphones and streaming music services because it allowed Apple to leverage the expertise and existing customer base of Beats to expand its presence in these markets.
By acquiring Beats, Apple gained access to a popular brand known for its high-quality headphones and a streaming music service with a substantial user base. This acquisition provided Apple with an immediate and significant presence in the headphones and streaming music industries, which were both growing rapidly at the time.
Furthermore, Apple's acquisition of Beats helped the company diversify its product offerings and revenue streams. Prior to the acquisition, Apple primarily focused on hardware products like iPhones and Mac computers. By entering the headphones and streaming music markets, Apple was able to capture additional sources of revenue and potentially attract new customers who were interested in these types of products and services.
Sheila has just finished writing a press release regarding a new product developed by her firm. She intends to email the release to local radio stations and newspapers, and certain national magazines, in hopes that they will find the information newsworthy and decide run a story about the new product. This activity is part of her firm's __________ efforts.
A.public relations.
B. institutional advertising.
C. secondary advertising
D. interactive marketing
Answer:
Letter A is correct. Public relations.
Explanation:
Public relations in an organization is characterized as a communication strategy between the organization and its potential audience in order to manage effective communication and build relationships that benefit the company and the consumer.
Public relations professionals focus their efforts on creating a positive reputation for the organization through paid or unpaid communication that can take place via newspapers, magazines, the internet, tv shows, social engagements, events, and the like. that is beneficial for the reputation of the company to be built in accordance with predetermined parameters required by stakeholders.
The yield to maturity on a coupon bond is _____.(A) always greater than the coupon rate.(B) the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the current yield.(C) the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity.(D) only equal to the internal rate of return of a bond when the bond is priced at par.(E) greater than both the current yield and coupon rate when the bond is priced at a premium to par.
The yield to maturity on a coupon bond is the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity. This takes into account both interest payments and any capital gain or loss.
Explanation:The yield to maturity on a coupon bond is (C) the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity. The yield to maturity (YTM) is the total return anticipated on a bond if it is held until its maturity date. It is comparable to the internal rate of return of a bond.
YTM takes into account both the interest payments received periodically, which can be assumed to be reinvested at the same rate, and any capital gain or loss. For example, if a bond with a face value of $1000 is purchased at a discount for $900 and gives a coupon payment of $100 yearly before maturing in 3 years, the YTM will factor in both the yearly coupon payments and the $100 gain upon maturity.
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The yield to maturity on a coupon bond is the C. rate an investor earns if they hold the bond to the maturity date and reinvest all coupons at the yield to maturity.
Explanation:The yield to maturity on a coupon bond is the rate an investor earns if they hold the bond to the maturity date and reinvest all coupons at the yield to maturity. This is option (C) from the given choices. The yield to maturity takes into account the bond's current price, coupon rate, and time to maturity, and reflects the total return an investor can expect to receive.
YTM considers interest payments received periodically, which can be assumed to be reinvested at the same rate, and any capital gain or loss. For example, if a bond with a face value of $1000 is purchased at a discount for $900 and gives a coupon payment of $100 yearly before maturing in 3 years, the YTM will factor in both the yearly coupon payments and the $100 gain upon maturity.
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On December 31, Sulfur Corporation has the following data available: Net Income $ 140 comma 000 Market price of one share of common stock $ 6 Preferred dividends 40 comma 000 Weightedminusaverage number of shares of common stock outstanding 20 comma 000 shares Total common stockholders' equity at the beginning of the year 370 comma 000 Total common stockholders' equity at the end of the year 300 comma 000 What is the priceminusearnings ratio?
Answer:
Earnings per share
= Net income - Preferred dividend
No of common stocks outstanding
= $140,000 - $40,000
300,000 shares
= $0.33 per share
Price-earnings ratio
= Market price per share
Earnings per share
= $6.00
$0.33
= 18
Explanation:
There is need to calculate earnings per share, which is net income minus preferred dividend divided by number of common stocks outstanding at the end of the year. Finally, we will calculate price-earnings ratio, which is the ratio of market price per share to earnings per share.
Through which of the following strategies has the Navy adopted, which advanced the concept of combat operations in littoral waters
Answer:
The correct answer is letter "C": "From the Sea" and later "Forward from the Sea".
Explanation:
The U.S. Navy published in 1992 "...From the Sea" where they stated their vision on the naval service for the 21st century. Later on, in 1994, the Navy reshaped their initial guidelines with "Forward ... From the Sea" keeping core values like operational primacy, leadership, teamwork, and pride to ensure national security.
d) Forward...From the Sea; The strategy that advanced the concept of combat operations in littoral waters for the Navy is Forward...From the Sea. This approach enhances power projection, adaptability, and capability in near-shore environments. It is crucial for addressing threats in congested and contested maritime regions.
Combat Operations in Littoral Waters:
The strategy that advanced the concept of combat operations in littoral waters for the Navy is Forward...From the Sea. This strategic concept was developed to enhance the Navy's ability to project power and conduct operations in coastal regions, maximizing the effectiveness of naval and Marine Corps forces in littoral, or near-shore, environments.
The Forward...From the Sea strategy emphasizes the importance of power projection from the sea, adaptability in volatile coastal regions, and the ability to conduct a wide range of military operations. This approach is crucial for addressing threats and maintaining security in littoral waters, which are often characterized by congested and contested maritime domains.
Examples of Littoral Warfare:
Island hopping in the Pacific during World War II, where the U.S. Navy and Marine Corps captured strategically located islands to push towards Japan.Modern operations that involve amphibious assaults, naval gunfire support, and joint operations with allied navies in coastal regions.Complete Question:
Through which of the following strategies has the Navy adopted, which advanced the concept of combat operations in littoral waters?
a) Joint Vision 2020
b) Air-Sea Battle
c) From the Sea
d) Forward...From the Sea
Which method of analysis does not classify variables as dependent or independent?
A) regression analysis
B) discriminant analysis
C) cluster analysis
D) analysis of variance
Answer:
C) cluster analysis
Explanation:
Regression analysis. The regression analysis determines the relationship between the two variables. Thus, one of these quantities (X) is given in advance(dependent) and is not random. The second value (U) is the independent and random number. The randomness of the second quantity can be explained for two reasons. First: Measuring the random number U, which depends on the number X, is associated with certain errors; second: The value of U may depend on other uncontrollable factors, in addition to being dependent on the value of the corresponding X value. In this case, we need to talk about the distribution of the random variable U against each value of the X variable. The main purpose of the regression analysis is to build a mathematical model that takes into account the factors affecting the physical process using experimental data and evaluating its accuracy. The least squares method is used for statistical estimation of the mathematical model's suitability to experimental data.
Discriminant analysis is a method used in statistics, pattern recognition, and machine learning to find a linear combination of attributes that define or distinguish two or more classes or events. The resulting combination can be used as a linear classifier or more often to reduce the size before classifying. LDA is closely related to variance analysis (ANOVA) and regression analysis, which try to express a dependent variable as a linear combination of other properties or dimensions. However, while variance analysis uses qualitative independent variables and a continuous dependent variable, discriminant analysis has continuous independent variables and a qualitative dependent variable.
Cluster analysis or clustering is a problem of grouping a number of objects. In this problem, objects must be in some way more similar to those in other groups to accommodate the same clusters (clusters). One of the main problems with data transmission is a common technique used in statistical data analysis. It is also used in machine learning, pattern recognition, image analysis, data retrieval, bioinformatics, data compression and computer graphics.
One-way analysis of variance (ANOVA) is used to calculate the significance of the difference between three and more independent means in a normally distributed series. ANOVA compares the arithmetic means of three or more groups alone; ANOVA result is also significant when at least one of these comparisons is significant. To measure the significance it will have the relation to the regression analysis that's why there will be dependent and independent variables as well.
Answer:
Cluster analysis does not require the use of dependent and independent variable.
The correct answer is C
Explanation:
Regression measures the relationship between two or more variables. It examines the relationship between dependent and independent variable.
Discriminant analysis is a technique used by researchers to measure the relationship between the dependent variable and one or more in dependent variables.
Cluster analysis is a technique that is used for exploratory research. It does not involve the use of dependent and independent variable.
Analysis of variance is used for measuring the influence that independent variable has on the dependent variable in regression analysis.
Imagine you are a Starbucks executive traveling to China from the company’s U.S. headquarters. You are going to Beijing to negotiate a commercial real estate deal. Based on what you know about high and low context differences between the United States and China, what should you avoid doing?
Multiple Choice:A. discussing non-business-related topicsB. relying on situational cuesC. quickly getting down to businessD. shaking hands after the negotiations are completeE. dressing in formal attire
In China, a high-context culture, it's important to avoid quickly getting down to business, instead focusing on building relationships and trust.
Explanation:When traveling to China from the United States to negotiate a commercial real estate deal, it is important to be aware of the cultural differences between high and low context cultures. In this scenario, the answer is C. quickly getting down to business. High-context cultures, like China, value relationships and trust-building, which often involve non-business related interactions and a slower approach to business dealings. Therefore, as a Starbucks executive, you should avoid the tendency of low-context cultures like the U.S., which is to quickly get down to business without adequate relationship-building. Other professional behaviors such as dressing in formal attire and shaking hands after negotiations could be appropriate depending on the specific circumstances and the preferences of the Chinese counterparts.
Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital is 15%. The risk-free interest rate is 5%.Suppose that you borrow $60,000 in financing the project. According to MM proposition II, the firm's equity cost of capital will be closest to:A) 45%B) 30%C) 25%D) 35%
Answer:
Option (D) is correct.
Explanation:
Expected cash flow in year 1 : C1 = (0.5 × 90,000) + (0.5 × 117,000)
= 103,500
Discount rate, r = Project's WACC = 15%
Hence, Value of the project today = Vp = C1 ÷ (1 + r)
= 103,500 ÷ (1 + 15%)
= $90,000
Value of equity today : Ve0 = Vp - Debt
= 90,000 - 60,000
= 30,000
Value of equity in year 1 = Project cash flows - Debt × (1 + interest rate)
Weak economy = 90,000 - 60,000 × (1 + 5%)
= 27,000
Strong economy = 117,000 - 60,000 × (1 + 5%)
= 54,000
Expected value of equity in year 1 : Ve1 = (0.5 × 27,000) + (0.5 × 54,000)
= 40,500
Hence, Levered cost of equity, Ke = (Ve1 ÷ Ve0) - 1
= (40,500 ÷ 30,000 ) - 1
= 35%
Final answer:
According to MM proposition II, the firm's equity cost of capital is calculated using the initial investment, the amount of debt financing, the project's cost of capital, and the risk-free rate. In this case, the correct equity cost of capital is closest to 45%.
Explanation:
To determine the firm's equity cost of capital according to Modigliani and Miller's proposition II, with corporate taxes ignored, we utilize the formula: equity cost of capital = risk-free rate + (project cost of capital - risk-free rate) * (total value / equity value).
In this scenario, the initial investment is $80,000, of which $60,000 is financed with debt. Therefore, the equity value is $80,000 - $60,000 = $20,000. Given the project's cost of capital is 15% and the risk-free rate is 5%, we can calculate the equity cost of capital as follows:
Equity cost of capital = 5% + (15% - 5%) * ($80,000 / $20,000) = 5% + 10% * 4 = 5% + 40% = 45%
Therefore, the equity cost of capital is closest to 45%, making answer choice A correct.
Assume the following information:Selling price per unit $200Contribution margin ratio 50%Total fixed costs $275,000How many units must be sold to generate a profit of $50,000?
a. 3,250 unitsb. 2,500 unitsc. 2,750 unitsd. 4,000 units
Answer:
Level of sales (dollars) to earn profit of $50,000
= Fixed cost + desired profit
Contribution margin ratio
= $275,000 + $50,000
0.5
= $650,000
Number of units to earn profit of $50,000
= Level of sales
Selling price
= $650,000
$200
= 3,250 units
The correct answer is A
Explanation:
First and foremost, the level of sales (dollars) to earn $50,000 profit is calculated, which is the ratio of fixed cost and desired profit to contribution margin ratio. Then, we will calculate the number of units to be sold in order to earn $50,000 profit by dividing the level of sales by selling price.
Final answer:
To generate a profit of $50,000 with a selling price of $200, a contribution margin ratio of 50%, and total fixed costs of $275,000, 3,250 units must be sold. This is calculated using the profit equation with the contribution margin per unit, which comes out to $100 per unit in this case.
Explanation:
To determine how many units need to be sold to generate a profit of $50,000 given a selling price per unit of $200, a contribution margin ratio of 50%, and total fixed costs of $275,000, we must first calculate the contribution margin per unit and then use the profit equation to find the required quantity of units. The contribution margin per unit can be found by multiplying the selling price per unit by the contribution margin ratio: $200 × 50% = $100 per unit.
The profit equation is given by: Profit = (Contribution margin per unit × Quantity of units sold) - Fixed costs. To achieve the desired profit of $50,000, we rearrange this equation to solve for the quantity of units sold: Quantity of units sold = (Profit + Fixed costs) / Contribution margin per unit. Plugging in the values, we get Quantity of units sold = ($50,000 + $275,000) / $100 = 3,250 units. Therefore, the correct answer is option (a) 3,250 units.
Which statements are true regarding the sate administrators authoity to estabish recordkeeping rules for broker-dealers?
Answer:
The correct answer is letter "A": The Administrator can only establish recordkeeping rules that are the same as those set by the SEC.
Explanation:
The Securities and Exchange Commission or SEC is an independent agency of the United States government. The mission of the SEC is to enforce securities laws passed by Congress. These laws aim to promote fair, orderly and efficient securities markets, protect investors from abuses, and help maintain a well-functioning economy. In the case States' administrators want to establish recordkeeping rules for broker-dealers in their region, they must follow those already set by the SEC.
Information related to Harwick Co. is presented below. 1. On April 5, purchased merchandise on account from Botham Company for $23,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Botham. 3. On April 7, purchased equipment on account for $26,000. 4. On April 8, returned damaged merchandise to Botham Company and was granted a $3,000 credit for returned merchandise. 5. On April 15, paid the amount due to Botham Company in full.
Answer:
Explanation:
The journal entries are shown below:
On April 5
Inventory A/c Dr $23,000
To Account payable A/c $23,000
(Being the inventory purchased is recorded)
On April 6
Inventory A/c Dr $900
To Cash A/c $900
(Being the freight cost is paid)
On April 7
Equipment A/c Dr $26,000
To Account payable A/c $26,000
(Being the equipment is purchased on credit)
On April 8
Account payable A/c Dr $3,000
To Inventory A/c $3,000
(Being the returned inventory is recorded)
On April 15
Account payable A/c Dr $20,000 ($23,000 - $3,000)
To Inventory A/c $400 ($20,000 × 2%)
To Cash A/c $19,600
(Being the amount due is paid)
Manufacturing is considering three capital investment proposals. At this time, Britton only has funds available to pursue one of the three investments. LOADING...(Click the icon to review the proposals.) Which investment should Britton pursue at this time? Why?
Answer:
The right project will be sorted by the use of the Profitability Index.
Explanation:
Since all three capital investment proposals have a positive Net Present Value, we have to use profitability index to ascertain which project is most profitable by following the steps below.
1. Divide the N.P.V of each project by the initial investment of the project
2. Rank the answer from the highest ratio to the least.
3. The project with the highest Profitability Index is to be selected for the investment.
In recent years, the Federal government’s top three uses of funds were approximately _____ % for income security and pensions, ______ % for health, and _____ % for national defense.
Answer:
The correct numbers for the blank spaces are: 23; 21,7; 18,8.
Explanation:
According to the Congressional Budget Office, in 2009 the United States Government destined 18,8% of the national budget to national defense, 23% for social security (retirement benefits), 21,7% in health care (Medicaid and Medicare), 5,3% in Interest of Federal Debt, and 33,8% in other spending such as education, public transportation, and housing.
Williamson Distributors separates its accounts receivable into three age groups for purposes of estimating the percentage of uncollectible accounts. Accounts not yet due = $35,000; estimated uncollectible = 5%. Accounts 1–30 days past due = $10,500; estimated uncollectible = 15%. Accounts more than 30 days past due = $4,500; estimated uncollectible = 25%. Compute the total estimated uncollectible accounts.
Answer:
$4,450
Explanation:
The computation of the total estimated uncollectible accounts is shown below:
= Accounts not yet due × uncollectible percentage + Accounts 1–30 days past due × uncollectible percentage + Accounts more than 30 days past due × uncollectible percentage
= $35,000 × 5% + $10,500 × 15% + $4,500 × 25%
= $1,750 + $1,575 + $1,125
= $4,450
The total estimated uncollectible accounts is calculated by multiplying the total amount of accounts receivable in each age group by the estimated uncollectible percentage for that age group. These calculated amounts are then added together, resulting in the total estimated uncollectible accounts, which in this case, is $4,450.
Explanation:The question asks about the estimation of uncollectible accounts based on the age of the accounts receivable and the respective percentages of expected uncollectibility. This falls under the subject of accounting.
You can compute the total estimated uncollectible accounts by multiplying the total amount of accounts receivable in each age group by the estimated uncollectible percentage corresponding to that age group. For example, for not yet due accounts of $35,000, the estimated uncollectible amount would be $35,000 * 5% = $1,750. Repeat this for the other age groups, and then add these amounts together to get the total estimated uncollectible accounts.
So, the calculation will be as follows:
Not yet due: $35,000 * 5% = $1,7501–30 days past due: $10,500 * 15% = $1,575More than 30 days past due: $4,500 * 25% = $1,125Add these amounts together to find the total estimated uncollectible accounts:
$1,750 + $1,575 + $1,125 = $4,450
Therefore, the total estimated uncollectible accounts amount to $4,450.
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Sales revenue $900,000 Cost of goods sold 625,000 Sales discounts 30,000 Sales returns and allowances 15,000 Operating expenses 99,000 Interest revenue 6,500 What is the gross profit?
A. $130,000
B. $120,000
C. $230,000
D. $300,000
Answer:
Correct answer is C, $230,000
Explanation:
Gross profit is the amount we derived after we deduct cost of goods sold to the net sales revenue.
First, we must compute the Net sales revenue.
Sales Revenue $900,000
Less:
Sales discounts $30,000
Sales returns and allowances $15,000
Net Sales $855,000
Next, We deduct cost of goods sold to net sales revenue in order for us to arrive the gross profit of the period.
Net sales $855,000
Less
Cost of goods sold $625,000
GROSS PROFIT MARGIN $230,000
Answer:
The gross profit is: C.$230,000.
Explanation:
The gross profit is determined by deducting Cost of good sold from Net sales.
Net Sales is net amount of sales in the period, that is, after taken away Sales Discounts, Sales returns and allowances from Gross Sales. So, we have Net Sales calculated as $900,000 - $30,000 - $15,000 = $855,000.
As a result, Gross profit = Net Sales - Cost of good sold = $855,000 - $625,000 = $230,000.
Operating expenses and Interest revenue is irrelevant in Gross profit determination. These expense item and income item will be taken into account when calculating Net Profit.
Thus, the answer is C.$230,000.
Which of the following fringe benefits are nontaxable fringe benefits for the recipient?aEmployer-paid health insurancebEmployer-paid premiums on a $25,000 group-term life insurance policycA below-market loan provided to an employee who needed an advance on his paydSeason tickets for the local NFL teameThe cost of meals and lodging that is for the convenience of the employer
Answer:
(a) Employer-paid health insurance
Explanation:
Employer paid health insurance premiums are non taxable. According to standard practices, health insurance are not taxed.
The unemployment rate:A. shows the percentage of the labor force that is considered unemployed.B. is the amount of people in the population that are not working.C. shows the percentage of the population that is considered unemployed.D. is the amount of the labor force that is not working.Suppose an economy is given by the following: Population = 293 million Labor force = 123 million The number of people employed = 116.2 million The number of people unemployed = 6.8 millionGiven the information above, the unemployment rate is ______%.(Enter your response rounded to one decimal place.)
The unemployment rate measures the percentage of the labor force that is unemployed. In this case, the rate is 5.5%.
Explanation:The unemployment rate is a measure that shows the percentage of the labor force that is considered unemployed. In this case, the labor force consists of 123 million people and the number of unemployed individuals is 6.8 million. To calculate the unemployment rate, divide the number of unemployed people by the labor force and multiply by 100. The unemployment rate in this scenario is 5.5%.
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The unemployment rate is the percentage of people in the labor force who do not have a job. In this case, the unemployment rate is 5.5%.
Explanation:The unemployment rate is a key economic indicator that measures the percentage of the labor force without a job and actively seeking employment. It reflects the health of the job market and overall economy. The rate is calculated by dividing the number of unemployed individuals by the total labor force and is often reported monthly by government agencies.
Thus, this rate is defined as the percentage of people in the labor force who do not have a job. In this case, the labor force is 123 million and the number of unemployed people is 6.8 million. To calculate the unemployment rate, we divide the number of unemployed by the labor force and multiply by 100. So the unemployment rate is (6.8 million / 123 million) * 100 = 5.5%.
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The amount you pay for gasoline for your car is an example of a(n):public-good cost.internal cost.external cost.social cost.third-party cost.
Answer:
Internal cost.
Explanation:
The gasoline that a person used for his car is an example of an internal cost.
Internal costs are considered as a private costs which were incurred by the firms for the production of goods. It includes labor, depreciation, rents and inputs. These are the costs which is directly borne by a firm or an individual.
It is the direct cost associated with the firms for the production of goods and services.
When selecting a software developer, which of the following should contractors possess (Select all that apply)?
A. Domain experience in developing comparable software systems
B. Maturity level four
C. Successful past performance record
D. Demonstrable mature software development capability and processes
When selecting a software developer, contractors should look for domain experience in developing similar software, a successful past performance record, and evidence of mature software development capability and processes. Maturity level four might not be a universally applicable requirement.
When selecting a software developer, contractors should ideally look for certain qualities. Option 'A' is vital because domain experience in developing comparable software systems can provide an indicator of the developer's ability to deliver similar projects successfully. Option 'C', a successful past performance record, is an evidence of the developer's competence. And option 'D', which is a demonstrable mature software development capability and processes, shows the developer's consistency and professionalism in the software development field. However, Option 'B', Maturity level four, may not always be a necessary requirement as it is a specific process maturity measurement in certain methodologies like CMMI, it may not apply in all situations.
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BSU Inc. wants to purchase a new machine for $35,500, excluding $1,400 of installation costs. The old machine was bought five years ago and had an expected economic life of 10 years without salvage value. This old machine now has a book value of $2,200, and BSU Inc. expects to sell it for that amount. The new machine would decrease operating costs by $7,500 each year of its economic life. The straight-line depreciation method would be used for the new machine, for a six-year period with no salvage value.
(a) Determine the cash payback period. (Round cash payback period to 1 decimal place, e.g. 10.5.)
(b) Determine the approximate internal rate of return. (Round answer to 0 decimal places, e.g. 10. For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
(c) Assuming the company has a required rate of return of 6%, determine whether the new machine should be purchased.
The cash payback period for the new machine is 4.6 years. The exact internal rate of return (IRR) may require additional data to calculate. However, the new machine should be purchased if the IRR exceeds the firm's required rate of return of 6%.
Explanation:The subject of this question is related to the basic principles of financial management, specifically concepts of capital budgeting. Let's address each question individually:
a. The cash payback period refers to the time it takes for a company to recover its initial investment. In this case, the cash outflow is the cost of the new machine plus installation costs minus the resale value of the old machine, which amounts to $35,500 + $1,400 - $2,200 = $34,700. We decrease the operating costs by $7,500 each year. Thus the cash payback period is $34,700 / $7,500 = 4.6 years.
b. Internal Rate of Return, or IRR, refers to the discount rate at which the net present value of the cash flows equals zero. It is often computed iteratively or using computer algorithms. Without a factor table or other direct means of calculating, accurate determination might not be feasible without additional data. However, note that the IRR is generally used to compare returns with other investment alternatives on a per year basis.
c. The company will purchase the new machine if the IRR exceeds the required rate of return (6%) because it shows that the machine is expected to generate a return greater than the minimum required return by the firm. As long as the IRR is higher than 6%, purchasing the machine is financially justifiable.
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A property is sold for $150,000 with the buyer agrees to assume an existing loan of $98,000 and executing a second note and deed of trust to the seller for $30,000. The purchase contract states that the unpaid balance of any existing loan is approximate and at closing any differences shall be reflected in cash. If the buyers closing costs are $2,500 and the remaining balance of the first loan is $89,800, what is the total cash due from the buyer at closing?
Final answer:
To calculate the total cash due from the buyer at closing, subtract the existing loan amount and second note and deed of trust from the purchase price, subtract the remaining balance of the first loan, and add the buyer's closing costs.
Explanation:
To calculate the total cash due from the buyer at closing, we need to consider the purchase price, the existing loan amount, the second note and deed of trust, and the buyer's closing costs. First, we subtract the existing loan amount of $98,000 and the second note and deed of trust of $30,000 from the purchase price of $150,000. This leaves us with $22,000. Then, we subtract the remaining balance of the first loan, which is $89,800. Finally, we add the buyer's closing costs of $2,500 to get the total cash due from the buyer at closing, which is $35,500.
Which statement most accurately describes the FDIC's auditor independence requirements? a.FDIC independence requirements incorporate requirements for attorneys and actuaries.b.FDIC independence requirements mirror the AICPA and DOL independence rules.c. Certain FDIC policy statements address auditor independence.d.The FDIC has not adopted regulations that incorporate SEC independence rules.
Answer:
c. Certain FDIC policy statements address auditor independence.
Explanation:
Options A and B are wrong because option A suggests that the requirements are for attorneys and actuaries, while option B tells the FDIC rules are copying from AICPA and DOL independence rules. In both cases, it contradicts from FDIC's auditor independence. Option "D" is wrong because FDIC has originally adopted regulations that incorporate SEC rules.
Since all the options are wrong, the option "C" is correct because some of the FDIC policies are addressing the auditors' independence.
The statement that most accurately describes the FDIC's auditor independence requirements is that the certain FDIC policy statements address auditor independence.
What makes an audits effective?In order for an audits to be effective, the external auditors appointed must be independent in both fact and appearance.
The external auditors must perform all necessary procedures to comply with auditing and attestation standards.
Therefore, the Option C is correct.
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Assume a factory that currently employs 25 workers is considering adding another 5 workers to its payroll. Economists would classify this as:A) a long run decisionB) a short run decisionC) neither a short run or long run decisionD) both a short run and long run decision
D: It is both a short run and long run decision.
Explanation:
Whether its a short run or long run decision, it is determined by when the benefit will accrue to the entity.
Thus employing 5 more workers in the short run is going to help the entity whiles in the long run also they are going to be a developed staff which will benefit the entity in the long run.
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Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,800 helmets, using 2,774 kilograms of plastic. The plastic cost the company $18,308. According to the standard cost card, each helmet should require 0.67 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,800 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,800 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer:
1. Standard quantity of kilograms
= 0.67 kg x 3,800
= 2,546 kg
2. Standard material cost allowed to make 3,800 helmets
= 0.67 x $7 x 3,800
= $17,822
3. Material spending variance $
Standard material cost 17,822
Less: Actual material cost 18,308
486(U)
4. Material price variance
= (Standard price - Actual price) x Actual quantity purchased
= ($7 - $6.599855804) x 2774 kg
= $1,110(F)
Actual price
= Actual material cost
Actual quantity purchased
= $18,308
2,774 kg
= $6.599855804
Material usage variance
= (Standard quantity - Actual quantity used) x Standard price
= (2,546 - 2,774) x $7
= $1,596(U)
Explanation:
Material spending variance is the difference between standard material cost and actual material cost. Material price variance is the difference between standard price and actual price multiplied by actual quantity purchased. Material usage variance is the difference between standard quantity and actual quantity used multiplied by standard price. Actual price is actual material cost divided by actual quantity purchased. Standard quantity is calculated as standard quantity per unit multiplied by actual output.
An owner withdrawal of $20,000 would_______.
A. decrease owner’s equity and increase assets by $20,000
B. increase owner’s equity and decrease liabilities by $20,000
C .increase liabilities and assets by $20,000
D. decrease assets and owner's equity by $20,000
An owner who withdraws an amount of $20000 would lead to decrease in the assets and the owner's equity by $20000.
Answer: Option D.
Explanation:
Assets are the things which are owned by the owner of the organisation and provide economic benefits. Liabilities are things which are the obligation on the owner of the company that he has to pay off. Equity is the share of the share holder of the company.
If an owner with draws or takes out money from the business for the personal use, it would lead to the decrease in the amount of the assets of the owner. It would also lead to the decrease in the amount of equity of the owner because he has taken out his share from the business for his personal use and not for the business.
A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead):
Plus Max
Units produced 200 16,000
Batch size (units) 10 400
Number of setups 20 40
Direct labor hours per unit 5 5
Total direct labor hours 1,000 80,000
Cost per setup $1,080
Total setup cost $64,800
With traditional two-stage allocation of overhead costs, using direct labor hours as the allocation base, the setup cost portion of overhead that is allocated to each unit of product for Plus and Max, respectively is:
Final answer:
The setup cost allocated to each unit of Plus and Max products is $3.60, calculated by dividing total setup cost by total direct labor hours and then multiplying by the direct labor hours per unit.
Explanation:
The student's question pertains to the allocation of setup costs to products in a traditional two-stage cost allocation system using direct labor hours as the basis. To find the setup cost allocated to each unit of product Plus and Max, we need to divide the total setup cost by the total direct labor hours and then allocate that cost per labor hour to each product based on the number of direct labor hours per unit.
First, calculate the setup cost per labor hour: $64,800 / (1,000 Plus hours + 80,000 Max hours) equals $0.72 per labor hour. Now, allocate this per hour cost to each unit of product by multiplying by the amount of direct labor hours per unit, which in both cases is 5. Thus, the setup cost allocated to each unit of Plus and Max is $0.72 x 5, which equals $3.60.
This simple numerical example is similar to the provided reference information, which discusses how total costs consist of fixed plus variable costs and how the average total cost (ATC) is affected by different production scales and methods, similar to the setup costs associated with Plus and Max.
Final answer:
The setup cost portion of overhead allocated to each unit of product for both Plus and Max is $4.00, calculated by using direct labor hours as the allocation base for traditional two-stage overhead costing.
Explanation:
In order to calculate the setup cost portion of factory overhead that is allocated to each unit of product for Plus and Max using a traditional two-stage allocation method with direct labor hours as the allocation base, we first need to determine the total direct labor hours and the overhead allocation rate per labor hour.
The total direct labor hours are given as 1,000 for Plus and 80,000 for Max, which sums up to 81,000 hours. The overhead allocation rate per labor hour is calculated by dividing the total setup cost ($64,800) by the total direct labor hours (81,000 hours), resulting in an allocation rate of $0.80 per direct labor hour.
To find the setup cost allocated to each unit of Plus and Max, we multiply the allocation rate by the direct labor hours per unit, which is 5 hours for both products. Hence, the setup cost allocated to each unit is $4.00 for Plus (5 hours × $0.80) and $4.00 for Max (5 hours × $0.80).
Thus, the setup cost portion of overhead allocated to each unit of product for Plus and Max is $4.00 respectively, based on direct labor hours.
Positive externalities exist because ________ benefits are ________ than ________ benefits.a. internal; greater ; external b. internal; greater ; social c. internal; less; external d. external; greater ;social e. internal ; less; social
Answer:
c. Internal benefits are less than external benefits
Explanation:
Lets first understand what a positive externality is. Positive externality is the effects of an activity that has greater and/or additional benefits to the society as a whole as compared to the benefits enjoyed by the individual responsible for creating such a positive impact. One of the common examples of positive externality is getting education, when we get education that provides us benefits on a personal level but it also helps you reach to a position where you can educate others and/or the society in general. This means that educating yourself not only benefits you but also has a positive influence in the society.
Similarly, if you walk to work every day, this will make you more healthy and will reduce congestion in the city and benefit every body else as well.
Otto Enterprises has a bond issue outstanding with a coupon of 8 percent that matures in 15 years. The bond is currently priced at $923.60 and has a par value of $1,000. Interest is paid semiannually. What is the yield to maturity?a. 8.67%b. 9.93%c. 9.16%d. 8.93%e. 8.45%
Answer:
Year Cashflow DF@7% PV DF@9% PV
$ $ $
0 (923.60) 1 (923.60) 1 (923.60)
1-15 80 9.1079 728.63 8.0607 644.86
15 1,000 0.3624 362.40 0.2745 274.50
NPV 167.43 NPV (4.24)
Kd = LR + NPV1/NPV1+NPV2 x (HR – LR)
Kd = 7 + 167.43/167.43 + 4.24 x (9 – 7)
Kd = 7 + 167.43/171.67 x 2
Kd = 8.95%
The yield to maturity is approximately 8.95%
The correct answer is D
Explanation:
The yield to maturity of the bond is calculated by applying internal rate of return formula. The current market price of the bond is the cashflow for year 0. The coupon on the bond (R = 8% x $1,000) is the cashflow for year 1 to 15 and the cashflow for year 15 is the face value.
All cashflows are discounted at 7% and 9% discount rates. The net present values were obtained by deducting the present value in year 0 from the present value of year 1 to 15.
Finally, the yield to maturity is calculated by applying the interpolation formula stated above, where LR denotes the lower discount rate, HR represents the higher discount rate, NPV1 refers to the positive NPV and NPV2 refers to the negative NPV.
SIROM Scientific Solutions has $12 million of outstanding equity and $4 million of bank debt. The bank debt costs 4% per year. The estimated equity beta is 1. If the market risk premium is 8% and the risk-free rate is 4%, compute the weighted average cost of capital if the firm's tax rate is 30%.
A) 9.70 %
B) 8.73 %
C) 10.67%
D) 9.22%
Answer:
WACC = 9.7%
Explanation:
First lets calculate CAPM to identify the return on equity.
CAPM = Risk free rate + Beta(Market Premium)
CAPM = 4 + 1(8) = 12%
WACC
= weight of equity * return on equity + weight of debt * return on debt * (1 - tax)
This gives,
=(12/12+4) * 0.12 + [(4/12+4) * 0.04 * (1 - 0.30)]
WACC = 0.09 + 0.007 = 9.7%
Hope that helps.
Answer: A) 9.7%
Explanation:
Bank debt cost= bank rate debt
Cost equity = free risk rate + equity beta × market risk premium.
Weight in equity = outstanding equity / (outstanding equity + debt)
Weight in debt = 1 - weight in equity.
WACC = weight in equity × cost of equity + weight in debt × cost of debt × (1 - tax rate)
Cost of equity = 0.04 + 1 × 0.08= 0.12
weight in equity= 12 / (4 + 12) = 0.75 weight in debt = 1 - 0.75 = 0.25
WACC= 0.75 × 0.12 + 0.25 × 0.04 × (1 - 0.30) = 0.097 * 100 = 9.7%
Suppose a study finds that college students who received financial aid have a greater tendency to graduate than do college students who do not receive financial aid. What is the identification problem that the authors must solve? If the authors conclude on the basis of the data that receiving financial aid increases the ability of college students to graduate, are they correct? What would be the best solution to the identification problem? Explain.
Answer:
Consider the following explanation
Explanation:
1 First he has,reasonably detailed knowledge of the market in question
2.The second general approach is to use advanced statistical analysis to identify the data
3.Author must collect data not only related to financial aid and college graduates but also on the many variables that can effect these variables .
4.Once the data are collected (which is often much more difficult than it sounds!), the author can then use some advanced statistical techniques to estimate the parameters, including one technique called multiple regression analysis.
If the author has done all these above things on the data ,then i think that his conclusion will be correct.
The best solution to the identification problem is it requires knowledge of the various variables that effect both the financial aid and college graduates so that advanced statistical estimation can be undertaken, In either case, however, knowledge of financial aid and college graduates alone is not sufficient to identify the data and drawing conclusions on the basis of it.
The authors must solve the identification problem of selection bias. They may not be correct in concluding that financial aid increases graduation rates based on the data alone. The best solution to the identification problem is a randomized controlled experiment.
Explanation:The identification problem that the authors must solve in this study is the issue of selection bias. In other words, they need to determine whether the difference in graduation rates between college students who received financial aid and those who did not is solely due to the financial aid or if there are other factors at play.
If the authors conclude that receiving financial aid increases the ability of college students to graduate based on the data alone, they may not be correct. The data may be confounded by other variables, such as the students' socioeconomic background or academic abilities, which could be influencing both the likelihood of receiving financial aid and the graduation rate.
The best solution to the identification problem would be to use a randomized controlled experiment. This would involve randomly assigning some eligible students to receive financial aid and others not to receive financial aid. By comparing the graduation rates between the two groups, the authors can more confidently attribute any differences to the impact of financial aid.
Bam's product manager continues to perform well in the market. However, a competing product is coming on strong and is looking to take over as the market share leader in the segment. Without sacrificing contribution margin, what can the Bam product manager do in order to improve upon the buying criteria, and thus potentially increase demand? Select: 1 Increase MTBF by 2000 Increase the promotion budget to gain greater awareness Lower the selling price since it is the second most important buying criteria Reposition Bam to make it even smaller and higher performing
Selling price cannot be lowered as contribution margin cannot be sacrificed.
Explanation:
Sales prices can not be reduced because there can not be lost investment margins.
Promotions may not strengthen the criteria for purchases. Criteria for the purchase are usually related to brand performance and reliability.
Re-positioning it in order to make it smaller and better. MTBF is already a reliability factor and a purchasing criterion.
Therefore 1 and 4 solutions are likely to be true.
But let us take the 4th option, which is important to increase market share. It also speaks about re-positioning.