Answer:
1. A radical innovation.
2. Subcultures
Explanation:
If you wanted your organizational unit to create a new product that is essentially an entirely new industry, you will encourage a radical innovation.
A radical innovation also known as the disruptive innovation is an innovative approach aimed at destroying or supplanting old business strategies and models with an invention to breakthrough and change the whole industries by creating new products.
Because workgroups develop their own subcultures, intranets build a common cultural foundation that can help unify employees in different units and locations around common company values.
Tyron manages with McGregor's Theory X in mind, and, as a result, his employee, Cassie, is losing interest in her job. If Tyron could abandon his current beliefs, he might instead acknowledge that there is "no one best way" to manage. He might consider Cassie's values, goals, skills, and attitudes, along with other factors, both internal and external to the firm, to improve performance. If so, he would be using the
Final answer:
Tyron should consider using Theory Y approach to improve performance and employee satisfaction.
Explanation:
The approach that Tyron should consider using is Theory Y. Theory Y managers assume that employees seek inner satisfaction and fulfillment from their work, and they function better under leadership that allows them to participate in setting their personal and work goals. In a Theory Y workplace, employees are given more autonomy and are encouraged to provide input on matters of efficiency and safety. By adopting this approach, Tyron can improve performance, employee satisfaction, and overall organizational output.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Units in beginning inventory 0 Units produced 2,900 Units sold 2,600 Units in ending inventory 300 Variable costs per unit: Direct materials $ 49 Direct labor $ 58 Variable manufacturing overhead $ 6 Variable selling and administrative expense $ 11 Fixed costs: Fixed manufacturing overhead $ 55,100 Fixed selling and administrative expense $ 18,200 What is the absorption costing unit product cost for the month
Answer:
$132
Explanation:
The computation of absorption costing unit product cost is given below:-
Absorption costing unit product cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed manufacturing overhead per unit
= $49 + $58 + $6 + ($55,100 ÷ 2,900)
= $49 + $58 + $6 + $19
= $132
So, for computing the Absorption costing unit product cost we simply applied the above formula.
You are an investor evaluating a project which is going to take 8 years. The project will pay $500,000 at the beginning of each year starting a year from now. These payments will grow at 2% for the first two years, then 3.5% for the following two years and then stay consistent at 4% until the end of the project. In the last year of the project you will receive a lump sum of $1 million while also paying a lump sum of $200,000. If your expected retrun on this project is 12.5%, what is the PV of the project?
Answer:
Present Value of the project is $3,295,932
Explanation:
Present value is the discounted value of all the cash inflows and outflows of the project. It can be calculated using a required rate of return.
All the cash flows first grew at the specified growth rate each year and then discounted using required rate of return.
Working for present value of the project is attached please find it.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
Units-beginning inventory................. 0
Units produced................................... 6,700
Units sold........................................... 6,500
Units-ending inventory..................... 200
Variable costs per unit
Direct materials................................ $47
Direct labor..................................... 44
Variable manufacturing OH........... 6
Variable selling and administrative expense $11
Fixed costs:
Fixed manufacturing overhead $52,500
Fixed selling and administrative expenses $3,800
What is the net operating income for the month under variable costing?
Answer:
Hi, your question is missing the selling price per unit, however important principles and calculations are explained below:
Variable Cost Product Costs = Only Variable Manufacturing Costs
Variable Cost Period Costs = Fixed Manufacturing Costs + All Non Manufacturing Costs.
Product Cost per unit = $47 + $44 + $ 6
= $97.00
Calculation of net operating income for the month under variable costing
Sales ($pp × 6,500) xxxxx
Less Costs of Sales
Opening Stock of Finished Goods 0 0
Add Cost of Goods Manufactured ($97.00×6,700) $649,900
Less Closing Stock of Finished Goods ($97.00×200) ($19,400) $630,500
Contribution xxxxx
Less Expenses
Fixed manufacturing overhead ($52,500 )
Fixed selling and administrative expenses ($3,800)
Variable selling and administrative expense ($11×6,700)
Net Income/(Loss) xxxxx
Explanation:
Ivanhoe Publications publishes a golf magazine for women. The magazine sells for $4 a copy on the newsstand. Yearly subscriptions to the magazine cost $45 per year (12 issues). During December 2019, Ivanhoe Publications sells 5,900 copies of the golf magazine at newsstands and receives payment for 7,500 subscriptions for 2020. Financial statements are prepared monthly. Prepare the December 2019 journal entries to record the newsstand sales and subscriptions received. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
Debit Cash with $361,100; credit Newsstand sales revenue with $23,600, and credit Subscription in advance with $337,500.
Explanation:
News stand sales revenue = $4 * 5,900 = $23,600
Subscription received for 2020 = $45 * 7,500 = $337,500
The December 2019 journal entries will be as follows:
Details Dr ($) Cr ($)
Cash 361,100
Newsstand sales revenue 23,600
Subscription in advance 337,500
To record cash received form newsstand and subscription for 2020
Jannet Company, currently pays its employees at the end of a week. The weekly payroll totals $400,000. If it were to extend the pay period so as to pay its employees 1 week later throughout an entire year, the employees would in effect be lending the firm ________ for a year.
Answer:
The answer is $400,000
Explanation:
Solution
The Jannet Company, presently pays its employees at the end of a week. The weekly payroll totals $400,000
The company would like to extend pay period for one week.
now,
The 52nd week for the current year will be paid in the 53rd week, that is, it will be paid in the next year.
Therefore, the employees would in effect be lending or borrowing the firm $400,000 for a year
Raul, an engineer with a leading manufacturer, pointed out a few things have contributed to his motivation. First, top managers were sharing company goals with employees. Second, his manager recently met with Raul's group to discuss the goals relevant to their jobs. Third, his manager requested that each person think about how he or she could personally help achieve these goals. As he followed through on his manager's request, Raul found himself becoming clearer about the role he is expected to play in reaching the organization's goals. This manufacturer is using __________ to help its managers boost employee motivation.
The manufacturer employs Management by Objectives (MBO) to motivate employees by aligning their SMART goals with the overall organizational objectives, thus enhancing productivity and motivation.
The manufacturer Raul works for is using Management by Objectives (MBO) to boost employee motivation. This approach involves setting specific, measurable, aggressive, realistic, and time-bound (SMART) goals that help employees to focus their efforts in a direction that benefits the organization. The goals are designed to challenge employees, make them rethink traditional methods, and align with the company's broader objectives. By sharing the company's goals, engaging employees in goal-setting, and reviewing their contributions during performance appraisals, managers can ensure employee goals align with the organization's goals. This systematic alignment can significantly enhance motivation and productivity within the company.
Brief Exercise 9-17 Record early retirement of bonds issued at a premium (LO9-7)
Premium Pizza retires its 7% bonds for $53,000 before their scheduled maturity. At the time, the bonds have a face value of $50,700 and a carrying value of $54,965. Record the early retirement of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr Bonds payable $50,700
Dr premium on bonds payable $4,265
Cr Cash $53,000
Cr gain on bonds retirement($50,700+$4,265-$53000) $1,965
Explanation:
The premium yet to be amortized on the bond at retirement is the carrying value minus face value i.e $54,965-$50,700=$4265
The premium on bonds payable would now be debited with $4265
The cash paid on retirement would be credited to cash account
The face value of the bonds payable of $50,700 would be debited to bonds payable in order to show that the obligation has been discharged.
g You invest 56% of your money in Stock A and the rest in Stock B. The standard deviation of annual returns is 49% for Stock A and 49% for Stock B. The correlation between the two stocks is 0.2. By how many percentage points does diversifying between these two stocks reduce your risk? Go out three decimals - for example, write 5.6% as .056.
Answer:
The risk will be reduced by 0.109
Explanation:
Standard deviation for stock A = 49%
Standard deviation for stock B = 49%
Correlation = 0.2
Let's use the standard deviation of portfolio equation:
[tex]= \sqrt{w_A^2 \sigma _A^2 + w_B^2 \sigma _B^2 + 2w_A w_B \sigma _A \sigma _B * C}[/tex]
Where[tex] w_B [/tex] = 100% - 56% = 44%
[tex]= \sqrt{(0.56^2 * 0.49^2) + (0.44^2 * 0.49^2) + (2*0.56*0.44*0.49*0.49)0.2}[/tex]
= 0.381 = 38.1%
The risk will be reduced by:
(0.56*0.49)+(0.44*0.49)-0.381
= 0.109
Consider the equation %ΔM + %ΔV ≈ %ΔP + %ΔY. If the velocity of money does not change (%ΔV = 0), and the change in real GDP exactly keeps pace with the change in the money supply (%ΔM = %ΔY), what will happen to the price level (P)?
Answer: It will stay the same i.e %ΔP = 0
Explanation:
We are given the following formula,
%ΔM + %ΔV ≈ %ΔP + %ΔY
And told that,
%ΔV = 0
%ΔM = %ΔY
If that is the case therefore then the new formula should be written as follows,
%ΔM = %ΔY
This is because the % change in money supply is the only variable that is on the left side of the equation. For it to be equal to % change in real GDP on the right side of the equation then ONLY the % change in real GDP can exist on the right side. Which means that %ΔP has to be 0 as well.
For example, assume both %ΔM and %ΔY are 2 and %ΔP is 1
%ΔM = %ΔY
2 ≠ 2 + 1
The equation is not satisfied.
Now assume %ΔP = 0.
2 = 2 + 0.
Equation is satisfied.
Seeing as %ΔP is 0 that means there is no change in Prices so the Price Level stays the same.
When The Equation is satisfied %ΔP is = 0 norms there is no change in Prices so the Price Level stays the same.
What is Real GDP?
We are given the ensuing formula,
After that %ΔM + %ΔV ≈ %ΔP + %ΔY
And also the told that is,
Then %ΔV is = 0
After that %ΔM is = %ΔY
When If that is the case Thus then the new procedure should be written as follows,
Then %ΔM is = %ΔY
This is because the % change in money supply is the greatest variable that is on the left flank of the equation. For it to be equal to the % change in real GDP on the right side of the equation then Exclusively the % change in real GDP can exist on the right side. This indicates that %ΔP has to be 0 as well.
For illustration, consider both %ΔM and %ΔY are 2 and %ΔP is 1
Then %ΔM = %ΔY
After that 2 ≠ 2 + 1
Then The equation is not satisfied.
Now we assume that %ΔP = 0.
Then 2 = 2 + 0.
Thus, The Equation is satisfied.
Then Noticing as %ΔP is 0 means there is no change in Prices so the Price Level stays identical.
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Adams Company produces a product that sells for $33 per unit and has a variable cost of $13 per unit. Adams incurs annual fixed costs of $120,000. RequiredDetermine the sales volume in units and dollars required to break even. (Do not round intermediate calculations.)Calculate the break-even point assuming fixed costs increase to $192,000. (Do not round intermediate calculations.)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Adams Company produces a product that sells for $33 per unit and has a variable cost of $13 per unit. Adams incurs annual fixed costs of $120,000.
To calculate the break-even point both in dollars and units, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 120,000/ (33 - 13)
Break-even point in units= 6,000 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 120,000/ (20/33)
Break-even point (dollars)= $198,000
Now, for fixed costs= 192,000
Break-even point in units= 192,000/ (33 - 13)= 9,600 units
Break-even point (dollars)= 192,000/ (20/33)= $316,800
Jackson comma Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 0.9 pound per glass at a cost of $ 0.60 per pound. The actual result for one month's production of 7 comma 100 glasses was 1.2 pounds per glass, at a cost of $ 0.40 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance.
Answer:
$426 Favorable
$1,278 Unfavourable
Explanation:
Direct material cost variance = Standard cost - Actual cost
= 65
7,100*0.9*0.60 - 7,100*1.2*0.40
=3,834-3,408
= $426 Favorable
Direct labor efficiency variance = (standard quantity - actual quantity)*standard price
= (7,100*0.9- 7,100*1.2)*0.60
=6,390-8,520*0.60
=-2,130*0.60
=$-1,278 Unfavourable
Marian Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year: Black Division Navy Division Sales (net) $ 600,000 $ 330,000 Salary expense 21,000 41,000 Cost of goods sold 160,000 152,000 The Black Division occupies 26,000 square feet in the plant. The Navy Division occupies 39,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $65,000. Compute departmental income for the Black and Navy Divisions, respectively. (Do not round your intermediate computations)
Answer and Explanation:
The computation of the departmental income for the black and navy decisions is shown below:
Particulars Black Division Navy Division
Net sales $600,000 $330,000
Less:
Salary expense -$21,000 -$41,000
Cost of goods sold -$160,000 -$152,000
Rent expense -$26,000 -$39,000
Departmental income $393,000 $98,000
We simply deduct all expenses from the sales so that the departmental income could come
Olinick Corporation is considering a project that would require an investment of $289,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.): Sales$254,000 Variable expenses 24,000 Contribution margin 230,000 Fixed expenses: Salaries 27,000 Rents 40,000 Depreciation 35,000 Total fixed expenses 102,000 Net operating income$128,000 The scrap value of the project's assets at the end of the project would be $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: (Round your answer to 1 decimal place.) Noreen_5e_Rechecks_2019_10_16 Multiple Choice 1.8 years 2.3 years 2.1 years 1.5 years
Answer:
1.8 years
Explanation:
the net cash flow per year = [(total sales revenue - total costs) x (1 - tax rate)] + depreciation
total sales revenue = $254,000 total costs = $126,000depreciation costs = $35,000taxes = 0the net cash flow per year = $254,000 - $126,000 + $35,000 = $163,000
the payback period = total investment / net cash flow = $289,000 / $163,000 = 1.77 years, which is closest to 1.8 years
The payback period is the time it takes the project to recover the initial investment required to carry it out.
You are considering the purchase of a common stock that paid a dividend of $3.00 yesterday. You expect this stock to have a growth rate of 20 percent for the next 3 years and the long-run normal growth rate after year 3 is expected to be constant at 5 percent. If you require a 14 percent rate of return, the price per share that you should you be willing to pay for this stock is closest to:
Answer:
$50.8
Explanation:
As per given Data
Dividend Paid = $3
Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.
Formula for PV of dividend
PV of Dividend = Dividend x ( 1 + growth rate )^n x ( 1 + r )^-n
1st year
PV of Dividend = $3 x ( 1 + 20%)^1 x ( 1 + 14% )^-1 = $3.16
2nd year
PV of Dividend = $3 x ( 1 + 20%)^2 x ( 1 + 14% )^-2 = $3.32
3rd year
PV of Dividend = $3 x ( 1 + 20%)^3 x ( 1 + 14% )^-3 = $3.50
After three years the dividend will grow at a constant rate of 5%, so we will use the following formula to calculate the present value
PV of Dividend = [ $3 x ( 1 + 20%)^3 x ( 1 + 5%) / ( 14% - 5% ) ] x [ ( 1 + 14% )^-3 ]
PV of Dividend = $40.82
Value of Stock = $3.16 + $3.32 + $3.50 + $40.82 = $50.8
b. Evaluate the statement in the case made by Toru Sakuragi that "… Toyota has been caught between a need to cut costs to overcome the strong yen and the need to improve quality to prevent recalls." And that "They are now pursuing both strategies but they are essentially at odds with one another." Is this a realistic strategy? Do you have suggestions for how the strategy might be improved?
Answer:
Both strategies can be at odds with each other, because cutting costs can reduce the quality of the cars produced and exported, leading to the undesired effect of increasing recalls, which is precisely the other thing that Toyota wants to reduce.
Explanation:
For this reason, Toyota should try instead to improve quality instead of cutting costs, so that its cars become so desirable that even a strong yen does not prevent consumers from buying.
This strategy can be contrasted with country-wide strategies when it comes to export goods: some countries depreciate their currency and/or rely on the export of cheap goods, these countries tend to be less competitive, and the strategy may not live up to expectations. Italy implemented this strategy until it adopted the euro, and could not devalue its currency anymore.
On the contrary, other countries aim for quality even if their currency is strong. This is the German strategy, which has maintained a healthy export economy when it had the mark, and now with the euro, both strong currencies.
In conclusion, Toyota should try to be more like Germany, and less like Italy.
Although challenging, Toyota can manage the strategy of balancing cost reduction and increasing quality. They can consider technological improvements or the use of revenue from non-impacted markets to subsidize their efforts in quality improvements.
Explanation:The statement by Toru Sakuragi implies that Toyota is grappling with two significant but conflicting strategies. The tension lies between reducing operational costs to counter the impact of a robust yen and enhancing product quality to prevent recalls from potentially damaging the brand's reputation. Though it may seem that these strategies oppose each other fundamentally, it is not impossible to pursue both; it is just incredibly challenging.
Essentially, Toyota must strike a balance between cost and quality. A potential improvement to this strategy could be the adoption of new technologies or process improvements that could reduce production costs without compromising product quality. Alternatively, Toyota could leverage some of its revenue from non-affected markets to subsidize quality improvements without the need for significant cost reductions.
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Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 20,000 , direct labor $ 12,000 , and manufacturing overhead $ 16,000 . As of January 1, Job No. 49 had been completed at a cost of $ 90,000 and was part of finished goods inventory. There was a $ 15,000 balance in the Raw Materials Inventory account.
During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $ 122,000 and $ 158,000 , respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $ 90,000 on account.
2. Incurred factory labor costs of $ 70,000 . Of this amount $ 16,000 related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirect materials $ 17,000 ; indirect labor $ 20,000 ; depreciation expense on equipment $ 12,000 ; and various other manufacturing overhead costs on account $ 16,000 .
4. Assigned direct materials and direct labor to jobs as follows.
Job No.
Direct Materials
Direct Labor
50 $ 10,000 $ 5,000
51 39,000 25,000
52 30,000 20,000
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Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. (Round answer to the nearest whole percent, e.g. 25%.)
Predetermined overhead rate
%
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Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job No. 50.
Job No. 50
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Beg. $
$
$
Jan.
$
$
$
Cost of completed job
Direct materials $
Direct labor
Manufacturing overhead
Total cost $
Job No. 51
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan. $
$
$
$
$
$
Cost of completed job
Direct materials $
Direct labor
Manufacturing overhead
Total cost $
Job No. 52
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan. $
$
$
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Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
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Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
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Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry to record the completion of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
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Prepare the journal entries to record the sale of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(1)
(To record sale of jobs)
(2)
(To record cost of jobs)
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What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of?
Finished Goods Inventory $
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What is the amount of over- or underapplied overhead?
Manufacturing Overhead $
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Answer:
1. N = 840.66 RPM
2. 1023 w
Explanation:
See attached images
A customer has requested that Inga Corporation fill a special order for 2,400 units of product K81 for $29 a unit. While the product would be modified slightly for the special order, product K81's normal unit product cost is $23.10: Direct materials $ 6.00 Direct labor 6.00 Variable manufacturing overhead 3.10 Fixed manufacturing overhead 8.00 Unit product cost $23.10 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product K81 that would increase the variable costs by $1.60 per unit and that would require an investment of $14,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company's overall net operating income would increase (decrease) by:
Answer:
Inga Corporation
Special Order:
If the special order is accepted, the company's overall net operating income would decrease by $3,680.00.
Explanation:
a) We need to perform some calculations to get the relevant costs. Relevant costs are costs that are avoidable if a decision is taken. Fixed overhead is not a relevant cost because it is unavoidable, especially in this case.
Relevant Costs:
Unit Product cost = $23.10
less Fixed overhead = $8.00
Relevant unit cost = $15.10
b) An income statement is prepared to determine the Operating Income from Special Order:
Sales (2,400 x $29) = $69,600
less Relevant costs:
Unit (2,400 x $15.10) = $40,080
Special Equipment Cost = $14,000
Contribution = $15,520
less Fixed cost ($8.00 x 2,400) = $19,200
Net Operating Income ($3,680)
c) To accept or reject the special order should not be based solely on the net operating loss. The character of the allocated fixed cost should be investigated and analyzed to understand whether the amount that is avoidable or not. Avoidable fixed cost is relevant in making such decision.
If the government follows an easy monetary policy and the exchange rate is flexible, which of the following will likely be the result? A falling real interest rate but higher net exports. A strong currency, which will help stimulate net exports. Increases in the demand for the currency and decreases in the supply of the currency. A higher real interest rate but lower net exports.
Answer:
A falling real interest rate but higher net exports.
Explanation:
An easy monetary policy is a policy in which the interest rates decrease in order to increase the money supply and when interest rates are lower, there is an increase in spending and on net exports. Also, a flexible exchange rate is when the system allows the events on the market to determine the exchange rate.
According to this, the answer is that if the government follows an easy monetary policy and the exchange rate is flexible, the result will likely be a falling real interest rate but higher net exports.
Dunstreet's Department Store would like to develop an inventory ordering policy with a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets. Demand for white percale sheets is 4,500 per year. The store is open 365 days per year. Every four weeks (28 days) inventory is counted and a new order is placed. It takes 6 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 190 sheets on-hand. How many sheets should you order
Answer:
277 sheets
Explanation:
As per the data given in the question,
Z at 95% = 1.64485
Safety stock = Z × Standard deviation × (Lead time + Period)^(1÷ 2)
= 1.64485 × 5 × (6+28)^(1÷ 2)
= 47.955
Daily demand = 4500 ÷ 365
= 12.33
Reorder point = (Daily demand × (lead time + period)) + safety stock
= (12.33 × (28 + 6)) + 47.955
= 467.175
Sheets to be ordered = Reorder point - sheets in hand
= 467.175 - 190
= 277.175
= 277 sheets
The dual role of strategic alliance refers to the ________. constant requirement of resources and markets process of finding skilled personnel and training them to work efficiently conflict between cooperation and competition differences between home and host governments
Answer:
Conflict between cooperation and competition
Explanation:
A strategic alliance consists in a temporary union between two or more firms, with the goal of working closely, in a cordinated manner, in order to achieve a specific result.
Because a strategic alliance is not a formal or definitive union, and each member of the alliance remains an independent firm, a conflict between cooperation and competition may arise, because the independent firms, while desiring to cooperate in order to achieve the best results under the alliance, are expected to compete again at some point in time as independent entities once the alliance ends.
Consider the following situations. a. Bank reserves are $100, the public holds $200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and the money supply. Instructions: Enter your responses as whole numbers. Deposits: $ Money supply: $ b. The money supply is $500 and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Find currency held by the public and bank reserves. Instructions: Enter your responses as whole numbers. Currency held by the public: $ Bank reserves: $ c. The money supply is $1,250, of which $250 is currency held by the public. Bank reserves are $100. Find the desired reserve-deposit ratio.
Answer: Please refer to Explanation
Explanation:
a) The amount of Deposits are calculated as,
Deposits = Reserve / Reserve Deposit ratio
Deposits = $100 / 0.25
= $400
Deposits are $400
Using the Deposits, Money Supply is calculated by,
Money supply = Currency in circulation + Deposit
Money Supply = $200 + $400
= $600.
Money Supply is $600
b) The currency held by the Public which is equal to bank reserves can be calculated by,
Currency held by public = Money Supply - Deposits
The desired reserve-deposit ratio is 0.25 so we can denote the currency held with C.
That means that
C = 500 - C/0.25
0.25C = 500(0.25) - C
O.25C + C = 125
1.25C = 125
C = $100
Currency held by the public and bank reserves is $100
c. To find the reserve deposit ratio, we can use the Money Supply equation.
Money supply = Currency in circulation + Reserves / Reserve deposit ratio ( denoted Rd)
Which is,
1,250 = 250 + 100 / Rd
1,250 - 250 = 100/ Rd
1,000 = 100 / Rd
1,000Rd = 100
Rd = 100/1,000
Rd = 10%
Reserve Deposit Ratio = 10% or 0.10.
a. Deposits: $800 Money supply: $1,000 b. Currency held by the public: $125 Bank reserves: $375 c. Desired reserve-deposit ratio: 0.2857
Explanation:a. To find the deposits, we can use the formula: deposits = currency / reserve-deposit ratio. In this case, currency = $200 and reserve-deposit ratio = 0.25. Deposits = 200 / 0.25 = $800. To find the money supply, we can add the currency and deposits: money supply = currency + deposits = 200 + 800 = $1,000.
b. To find the currency held by the public, we can use the formula: currency held by the public = reserve-deposit ratio * deposits. In this case, the reserve-deposit ratio = 0.25 and deposits = $500. Currency held by the public = 0.25 * 500 = $125. To find the bank reserves, we can subtract the currency held by the public from the desired reserves: bank reserves = desired reserves - currency held by the public = 500 - 125 = $375.
c. To find the desired reserve-deposit ratio, we can use the formula: desired reserve-deposit ratio = bank reserves / (currency held by the public + bank reserves). In this case, the bank reserves = $100, and the currency held by the public = $250. Desired reserve-deposit ratio = 100 / (250 + 100) = 0.2857 (rounded to four decimal places).
Carper Company is considering a capital investment of $390,000 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $20,000 and $85,000, respectively. Carper has an 8% cost of capital rate, which is the required rate of return on the investment. Instructions (Round to two decimals.)
Answer:
1. 4.59
2. 5.13%
Explanation:
(1) the cash payback period
Pay back period = Capital investment / Annual net annual cash flows = $390,000 / $85,000 = 4.59, or 4 years and (0.58823529411765 * 12 months) = 4 years and 7 months.
(2) The annual rate of return on the proposed capital expenditure
Annual rate of return = Annual net income / Capital investment = $20,000 / $390,000 = 0.0513, or 5.13%.
What are the five basis principles of finance? Briefly explain them (no more than 250 words). (10 marks)
Answer:
1. Time Value Money
2. Agency Problem
3. Cash Flow Matters
4. Risk Should be Rewarded
5. Market Prices Reflect Information
Explanation:
Time Value of Money
A very important Principle in Finance. Time Value of money refers to the fact that what money is worth today is not what it will be worth tomorrow. Tomorrow, that money will probably be worth less due to the effects of inflation eroding it's value. For this reason it is therefore possible to invest in the present and expect a higher value in future because your money becomes stronger. For example, rent for a building could be $2,000 in 2015 but is now $3,000 in 2020. This is because Inflation we the value of the Dollar and so prices went up to compensate.
Agency Problem.
This principle states that the goals of management and the goals of shareholders may differ sometimes. When this happens there is a conflict of interest and the managers might just undertake actions that are not in the interest of the shareholders.
CashFlow Matters
Actual cash is needed in finance to run the business and engage in transactions that help move the business forward. Simply having potential income is not good enough and so cash is Paramount. For this reason there is a very important financial statement called the Cash Flow Statement which a company uses to see how much cash it actually has on hand.
Risk Should be Rewarded
In finance there is a basic premise that the more risk you undertake, the more you should be compensated. If the risk you are taking is high then the benefit must be high as well. This is why riskier financial instruments are ascribed higher rewards and lower risk instruments have a lower reward. For example, US T-bills are known as the safest of instruments and for this reason have very low rates.
Market Prices Reflect Information
Market Prices in finance are considered right because they reflect the information in the market surrounding the asset in question. This means that Financial markets regulate their own prices based on information available and so that is the price trades should be conducted at.
Rochester Industries expects free cash flow to the firm (FCFF) in the coming year of 300 million Canadian dollars ($). The company maintains an all-equity capital structure, and Rochester's required rate of return on equity is 8 percent. For the purposes of this problem, you can assume that FCFF will grow forever at a rate of 3 percent. Rochester Industries has 100 million outstanding common shares. Rochester's common shares are currently trading in the market for $60 per share.
Required:
a. If Rochester Industries’s free cash flow is expected to be $10 million in one year, what constant expected future growth rate is consistent with the firm’s current market value?
b. Estimate the value of Restex’s interest tax shield
Answer:
Explanation:
a. 10.8512%7% 10.408.42%1.851.85102201.854070.0842100.08425.96%407LWACCFCFVEDWACCggg
b. 10.85pretax WACC12%7%9.70%1.851.85FCF10$267 millionpretax WACC0.09700.0596PVInterest Tax Shield407267$140 millionUVg
Eric was in the store and started looking at riding lawn mowers. He didn't come to this store for the purpose of purchasing one, but he started considering it once he was there. However, he did not purchase one on that trip. Instead he went to other stores to look at their mowers, he asked his neighbor and his brother-in-law about their mowers, and he searched the Internet before he decided on the brand to purchase. Which type of decision making did Eric undertake?
Answer:
Extended decision making
Explanation:
Decision making can be described as the process of making a choice between two or more alternatives. It involves analysing various alternatives and then identifying the right action to take.
Extended decision making involves the choices made by customers during the purchase of an unintended/unfamiliar product or a product with a high price. This type of decision making requires a prolonged thought and search effort inorder to arrive at a suitable choice.
Inorder for a brand to have a positive effect on extended decision makers, it is essential that they create a large social media presence where individuals can share their various views on the product.
QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Alternative A Alternative B Projected revenue $ 175,000 $ 230,000 Unit-level costs 33,000 44,000 Batch-level costs 20,500 32,000 Product-level costs 23,000 25,000 Facility-level costs 18,000 20,500 What is the differential revenue for this decision?
Answer:
$55,000
Explanation:
Differential Revenue
Alternative A Alternative B
Projected revenue $ 175,000 $ 230,000
Hence :
Alternative A - Alternative B = Differential Revenue
$ 175,000 - $ 230,000
=$55,000
Therefore the differential revenue for this decision will be $55,000
Mr. Smith employs a team of sales representatives whose primary task is to answer calls from prospective and current customers who have received their company catalog and are interested in making a purchase. He compensates his team using a competitive hourly rate, and he is able to keep costs low since these salespeople do not meet with clients and therefore have no expense account for travel, meals, etc. His salespeople are most likely:
Answer:
Inside sales representative.
Explanation:
A sales representative can be described as an individual that is responsible for selling goods and services to the customers.
A sales representative should be able to carry out the following functions:
1) He/she should be able to properly explain the different features of a product inorder to increase the brand loyalty.
2) The sales rep should be able to quickly respond to the different enquires that customers have about the product.
3) He/she must be able to carry out online transactions.
An inside sales representative is one who works inside the office, this type of sales rep do not transact business directly with the customers instead transaction is carried out through phone calls, email, skype.
Blade Breeze Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $70, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $ 0.08 Machining Machine hours 7.20 Assembling Number of parts 0.35 Packaging Number of finished units 2.80What is the cost of machining per ceiling fan
Answer:
cost of machining per ceiling fan= $18 per unit
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers. Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
For example, the machining overhead would charged to each ceiling fan using the machining overhead rate per machine hours.
Cost of machining per ceiling fan = Machining hours × overhead rate per machine hours
= 2.50 × $7.20= $18 per unit
cost of machining per ceiling fan= $18 per unit
"The potentially valid arguments for tariff protection are also the most easily abused. " What are those arguments? Why are they susceptible to abuse? Evaluate the use of artificial trade barriers, such as tariffs and import quotas, as a means of achieving and maintaining full employment. Answer fully and give necessary details.
Answer:
Trade barriers is also secured as being essential to shield local companies from foreign marketing, to shield supposed new firms, and to confirm satisfactory manufacture planes in segments believed to be necessary within the occasion of conflict. (The opinions about hypothetical will increase in local service, guard from external low-wage employment, and financial divergence aren't effective or are irrelevant to the pull economy.)
Every of those effective influences is commonly abused. Marketing cases by external companies within the US. are troublesome to evidence and occasional. Typically domestic manufacturers can privilege their external participants are marketing once the lower costs merely replicate a proportional benefit in external assembly. If this is often true the employment of anti- marketing responsibilities decreases the advantages of trade.