Answer:
a) 100%
b) Yes
c) Total airfare
Explanation:
A) For tax purposes the portion of Justin's trip that is regarded as being for business is 100% and this is because we can consider weekends and Holidays as business days if they are preceded by a business day and also succeeded by a business day(s) also considering that Justin's flight was delayed from Wednesday to Thursday
B) Yes it will affect my answer because it would mean that Saturday, Sunday and Monday will become Non-business days
C) The total cost of the Airfare qualifies as deductible business expense in both A and B
Daily Enterprises is purchasing a $10.4 million machine. It will cost $46,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $3.9 million per year along with incremental costs of $1.3 million per year. Daily's marginal tax rate is 35%. You are forecasting incremental free cash flows for Daily Enterprises. Whatare the incremental free cash flows associated with the new machine?
Answer:
$2,421,220
Explanation:
Calculation to determine incremental free cash flows associated with the new machine
First step is to calculate The cost of depreciation
Cost of depreciation= $10,4000,00 + $46,000/ 5
Cost of depreciation= $2,089,200
Now let calculate the Incremental free cash flows
Incremental free cash flows = ( $3.9 million - $1,300,000) * (1 - 0.35) + $2,089,200* 0.35
Incremental free cash flows = $1,690,000 + $731,220
Incremental free cash flows=$2,421,220
Therefore the incremental free cash flows associated with the new machine is $2,421,220.
Once the adjusting entries are posted, the adjusted trial balance is prepared to a. verify that the debits and credits are in balance b. verify that the net income (loss) is correct for the period c. verify the correct flow of accounts into the financial statements d. verify that the net income correctly flows into the statement of stockholders' equity from the income statement
Answer:
a. verify that the debits and credits are in balance
Explanation:
A periodic system of inventory can be defined as a method of financial accounting, that typically involves updating informations about an inventory on a periodic basis (at specific intervals) as the sales or purchases are being made by the customers, through the use of either an enterprise management software applications or a digitized point-of-sale equipment.
On the other hand, a perpetual inventory system is a type of inventory management that continuously records in real-time the amount of inventory sold or purchased through the use of enterprise software or technological software applications such as a point of sale (POS).
A journal entry involves the process of keeping the records of business transactions made by an organization.
The journal entry is used by bookkeepers and accountants. Ideally, it is important that a journal has all of following informations; date, reference number, debit balance, credit balance and transaction description.
In Accounting, most businesses use a double-entry account system and as such, the total amount debited must equal the total amount credited in a journal entry.
Once the adjusting entries are posted, the adjusted trial balance is prepared to verify that the debits and credits are in balance.
Oscanda Accessories Corporation manufactured 21,400 travel bags during March. The following fixed overhead data pertain to March: Actual Static Budget Production 21,400 units 22,000 units Machine-hours 3,400 hours 4,400 hours Fixed overhead cost for March $176,300 $184,800 What is the amount of fixed overhead spending variance
Answer:
$8,500 favorable
Explanation:
The computation of the fixed overhead spending variance is shown below
= Budgeted fixed overhead - actual fixed overhead
= $184,800 - $176,300
= $8,500 favorable
We simply deduct the actual fixed overhead from the budgeted one so that the fixed overhead spending variance could come
Statement Of Owner's Equity Jay Pembroke started a business in April. Prepare a Statement of Owner's Equity using the following balances for April transactions. Cash $12,165 Accounts Receivable 1,811 Office Supplies 4,747 Prepaid Insurance 1,492 Accounts Payable 346 Jay Pembroke, Capital 17,536 Jay Pembroke, Drawing 100 Service Fees 3,033 Rent Expense 600 You will need to calculate the net income for April.
Answer:
$2,433
Explanation:
Net Income = Sales - Expenses
where,
Sales = $3,033
and
Expenses = $600
therefore,
Net Income = $3,033 - $600 = $2,433
Yolo Company, which has excess capacity (i.e. it doesn't have to give up producing and selling products in the normal market if it accepts a special order), received a special order for 4,500 units at a price of $16 per unit. Currently, production and sales are anticipated to be 11,000 units without considering the special order. Budget information for the current year follows. Sales $ 231,000 Less: Cost of Goods Sold 165,000 Gross Margin $ 66,000 Cost of goods sold includes $44,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:
Answer:
$22,500 increase
Explanation:
The computation is shown below:
Variable cost per unit is
= ($165,000 - $44,000) ÷ 11,000 units
= $11
And, the Sales price per unit is $16
So, the Profit per unit is
= $16 - $11
= $5 per unit
Now the company income would be
= 4,500 units × $5 per unit
= $22,500 increase
Hence, the company income would be increased by $22,500
According to the survey article on mergers by Mukherjee et al,
A) a minority of managers believe that diversification can be a good reason to merge.
B) acquiring managers discount targets’ cash flows at the targets’ cost of capital.
C) managers do not believe operating synergies to be important in merger decisions.
D) managers do not use the discounted cash flow formula to value a target in a merger.
Whirlwind mowers manufacturers and sells power lawnmower still public and distributes the products through its own dealers. Andrew is a homeowner who has purchased a power mower from an authorized dealer on the basis of the dealer's recommendation that the mower is the best one available to the job. Andrew was cutting his lawn when the mower blade flew off and seriously injured his leg.
Required:
a. Andrew sues Whirlwind Mowers and asks for damages based on negligence in producing the power mower. Is Whirlwind Mowers guilty of negligence? Explain your answer.
b. The doctrine of res ipsa loquitur can often be applied to cases of this type. Show how this doctrine can be applied to this case. Your answer must include a definition of res ipsa loquitur .
c. Explain the various types of damages that Andrew might receive if Whirlwind Mowers is found guilty of negligence.
Answer:
A) Yes Whirlwind mowers are guilty
B) If
The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipmentC) Compensative damages : special and general
Explanation:
A)
Andrew can sue whirlwind mowers and claim damages for production negligence ( i.e. not following the standard of care ) as enshrined in the doctrine of " res ipsa loquitur " hence Whirlwind mowers are guilty
B)
"res ipsa loquitur ." means the thing speaks for itself and this doctrine can be applied to this case following that the:
The negligence causes an injury event occurred due to the negligence applicant/defendant has an exclusive ownership of the equipmentc) The various types of damages
Compensative damages ( divided into 2 )
i) special damages which includes hospital expenses and other properly documented damages ii) general damages : includes damages that are non-measurable damages
Portions of the financial statements for Clear Transmissions Company are provided below.
CLEAR TRANSMISSIONS COMPANY
Income Statement
For the Year Ended December 31, 2021 ($ in thousands)
Sales $ 2,160
Cost of goods sold 864
Gross margin 1,296
Salaries expense $ 388
Depreciation expense 250
Amortization expense 38
Interest expense 96
Loss on sale of cash equivalents 20 792
Income before taxes 504
Income tax expense 252
Net Income 252
CLEAR TRANSMISSIONS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in 000s)
Year
2021 2020 Change
Cash 135 128 7
Accounts receivable 259 274 (15 )
Inventory 464 478 (14 )
Accounts payable 198 190 8
Salaries payable 106 114 (8)
Interest payable 54 48 6
Income tax payable 45 38 7
Required:
Prepare the cash flows from operating activities section of the statement of cash flows for Clear Transmissions Company using the indirect method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)
Answer:
Clear Transmissions Company
Clear Transmissions Company
Statement of Cash Flows for the year ended December 31, 2021
Operating activities: ($ in 000s)
Net Income $252
Depreciation expense 250
Amortization expense 38
Loss on sale of cash equivalents 20
Changes in working capital:
Accounts receivable 15
Inventory 14
Accounts payable 8
Salaries payable (8)
Interest payable 6
Income tax payable 7
Cash flow operations $602
Explanation:
a) Data and Calculations:
CLEAR TRANSMISSIONS COMPANY
Income Statement
For the Year Ended December 31, 2021 ($ in thousands)
Sales $ 2,160
Cost of goods sold 864
Gross margin 1,296
Salaries expense $ 388
Depreciation expense 250
Amortization expense 38
Interest expense 96
Loss on sale of cash equivalents 20 792
Income before taxes 504
Income tax expense 252
Net Income 252
CLEAR TRANSMISSIONS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in 000s)
Year 2021 2020 Change
Cash 135 128 7
Accounts receivable 259 274 (15 )
Inventory 464 478 (14 )
Accounts payable 198 190 8
Salaries payable 106 114 (8)
Interest payable 54 48 6
Income tax payable 45 38 7
Question 4
Write a short essay about Controlling Inventory".
Explanation:
The necessity of inventory control is to maintain a reserve (store) of goods that will ensure manufacturing according to the production plan based on sales requirements and the lowest possible ultimate cost.
Losses from improper inventory control include purchases in excess than what needed, the cost of slowed up production resulting from material not being available when wanted. Each time a machine is shut down for lack of materials or each time sale is postponed or cancelled for lack of finished goods. Thus a factory loses money.
To promote smooth factory operation and to prevent piling up of stock or idle machine time proper quantity of material must be on hand when it is wanted. Proper inventory control can reduce such losses to a great extent.
Holbrook, a calendar year S corporation, distributes $89,500 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $107,400, Holbrook's AAA balance is $40,275, and Holbrook has $13,425 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $89,500 is from AAA and AEP as well as how Cody's stock basis is affected. If an amount is zero, enter "0".
Distribution from Account Affect on Stock Basis Balance after Distribution
From AAA Account $8000 $8000 $0
From AEP Account $2500 $0 $0
From Cody's stock basis $ $ $
Answer:
Explanation:
........................
Bond valuation [LO14-2] Your investment department has researched possible investments in corporate debt securities. Among the available investments are the following $100 million bond issues, each dated January 1, 2021. Prices were determined by underwriters at different times during the last few weeks. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Company Bond Price Stated Rate
1. BB Corp. $ 107 million 15 %
2. DD Corp. $ 100 million 14 %
3. GG Corp. $ 93 million 13 %
Each of the bond issues matures on December 31, 2040, and pays interest semiannually on June 30 and December 31. For bonds of similar risk and maturity, the market yield at January 1, 2021, is 14%.
Required: Other things being equal, which of the bond issues offers the most attractive investment opportunity if it can be purchased at the prices stated?
Answer:
Bond Valuation
Other things being equal, the bond issue that offers the most attractive investment opportunity if it can be purchased at the prices stated is:
= BB Corp. bonds.
Explanation:
a) Data and Calculations:
Maturity period = 20 years
Issue date = January 1, 2021
Maturity date = December 31, 2040
Company Bond Price Stated Rate Annual Interest FV
1. BB Corp. $ 107 million 15 % $15 million $3,518,371,301.23
2. DD Corp. $ 100 million 14 % $14 million 2,827,106,832.58
3. GG Corp. $ 93 million 13 % $13 million 2,260,756,079.53
From an online financial calculator, the future values of the bonds are:
N (# of periods) 20
I/Y (Interest per year) 15
PV (Present Value) 107000000
PMT (Periodic Payment) 15000000
Results
FV = $3,518,371,301.23
Sum of all periodic payments $300,000,000.00
Total Interest $3,111,371,301.2
N (# of periods) 20
I/Y (Interest per year) 14
PV (Present Value) 100000000
PMT (Periodic Payment) 14000000
Results
FV = $2,827,106,832.58
Sum of all periodic payments $280,000,000.00
Total Interest $2,447,106,832.58
N (# of periods) 20
I/Y (Interest per year) 13
PV (Present Value) 93000000
PMT (Periodic Payment) 13000000
Results
FV = $2,260,756,079.53
Sum of all periodic payments $260,000,000.00
Total Interest $1,907,756,079.53
Burns Industries currently manufactures and sells 11,000 power saws per month, although it has the capacity to produce 26,000 units per month. At the 11,000-unit-per-month level of production, the per-unit cost is $46, consisting of $30 in variable costs and $16 in fixed costs. Burns sells its saws to retail stores for $71 each. Allen Distributors has offered to purchase 4,100 saws per month at a reduced price. Burns can manufacture these additional units with no change in its present level of fixed manufacturing costs. Using an incremental analysis approach, Burns should consider accepting this special order only if the price per unit offered by Allen is at least: Multiple Choice $16. $46. $71. $30. qizket
Answer:
Selling price= $30
Explanation:
Giving the following information:
Unitary cost:
Variable= $30
Fixed= $16
Number of units= 4,100
Normally, when there is unused capacity and a new customer asks for a reduced price, the fixed cost should not be taken into account when calculating the selling price. The company benefits from increasing its sales, acquiring a new customer, and perhaps getting some discounts from suppliers in the variable components.
The lower price that the company accepts is the one that equals the unitary variable cost. In this case:
Selling price= $30
What are some recommendations for ways that Redbox can maintain its high market
share?
Answer:
Do online streaming
Explanation:
1: create commercials to spread the business
2: emphasize the good points for example, a movie ticket cost about $15 to $20 while a Redbox movie only cost about $2 and multiple people can watch the movie they bought.
3: place Redbox stations in high populated building for example, a mall, Publix, Walmart, Wawa, and Target.
Seidman Company manufactures and sells 20,000 units of product X per month. Each unit of product X sells for $17 and has a contribution margin of $8. If product X is discontinued, $45,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Company's other products. If product X is discontinued, Seidman Company's monthly income before taxes should:
Answer:
Effect on income= $115,000 decrease
Explanation:
Giving the following information:
Fixed costs= $45,000
Number of units= 20,000
Unitary contribution margin= $8
To calculate the effect on income, we need to use the following formula:
Effect on income= decrease in fixed costs - decrease in contribution margin
Effect on income= 45,000 - 20,000*8
Effect on income= $115,000 decrease
You work for a mature company with a long history in the industry and have been given stock options. Which of the following are you most likely wanting to see happen with top line (revenue) and bottom line (net profit) growth rates?
A. Top line and bottom line holding steady without much variation.
B. Top line growing faster than bottom line.
C. Bottom line growing faster than top line.
D. Both top and bottom line growing at the same rate.
Answer: D. Both top and bottom line growing at the same rate.
Explanation:
Based on the information given in the question, the most likely thing will be for the top and bottom line growing at the same rate. This implies that both the revenue and the net profit grow at same rate.
It's vital for them to grow at a steady rate in order to ensure stability. The top line growing faster than bottom line or the bottom line growing faster than top line isn't good for the stock options.
You are upgrading to better production equipment for your firm's only product. The new equipment will allow you to make more of your product in the same amount of time. Thus, you forecast that total sales will increase next year by over the current amount of units. If your sales price is per unit, what are the incremental revenues next year from the upgrade?
Answer:
$473,760
Explanation:
Calculation to determine the incremental revenues next year from the upgrade
Using this formula
Incremental revenues= Units* Percentage Increase in total sales*Sales price
Let plug in the formula
Incremental revenues=94000 units* 24% * $21
Incremental revenues= $473,760
Therefore the incremental revenues next year from the upgrade will be $473,760
Your company purchased a vacant lot 3 years ago for $1.2 million and at that time spent $100,000 to convert it into a parking lot, which now generates $120,000/year in revenue. You are considering building a distribution center on the lot with a construction cost of $5 million and an annual OCF of $750,000. Which of these cash flows should be included in a capital budgeting analysis for the distribution center?
I. The $1.2 Million purchase price for the lot
II. The $100,000 conversion cost
III. The $120,000/ year parking revenue
IV. The $5 million construction cost for the distribution center
V. The $750,000/year OCF from the distribution center
a. I and II only
b. I, III, IV only
c. IV, and V only
d. III, IV, and V only
e. ALL of them
Answer:
The cash flows that should be included in a capital budgeting analysis for the distribution center are:
d. III, IV, and V only
Explanation:
a) Data and Calculations:
Parking Lot Distribution Center
Initial investment costs $1.2 million $5 million
Conversion costs 100,000 0
Annual revenue $120,000 $750,000
b) Not all the cash flows should be included in a capital budgeting analysis for the distribution center. The initial investment and conversion costs are sunk costs. The annual revenue from the parking lot becomes an opportunity cost when the lot is converted to a distribution center.
Holden is a people person. He is very good at working with customers and keeping a positive attitude. He has taken a couple classes on supervising money matters and typically works on a computer tracking customer information. Which career does Holden most likely have?
Logistics Planning and Management Services
Sales and Services
Transportation Operations
Facility and Mobile Equipment Maintenance
Answer:b
Explanation:
Trust
Answer:
B, Sales and Services
Explanation:
Sales and services workers usually have to talk to customers and help them track their packages/orders/customer info. That is what it says Holden is doing, so it should be B. Have a good day (;
How do consumer preferences shape the market for livestock?
Answer:
The consumer preference is to have a meat that is leaner, and an equal amount of fat distributed throughout the meat.
Explanation:
This means that the cuts of meat that fit this description can be sold at a higher price than others.
Fruitvale Company prepared the following income statement for 2018:
Sales $242
Cost of goods sold 175
Gross profit 67
Operating expenses:
Salaries expense $12
Depreciation expense 14
Rent expense 5 31
Operating income 36
Loss on sale of land (4)
Net income $32
Also, the company’s December 31 balance sheet revealed the following:
2018 2017
Accounts payable $24 $15
Accounts receivable 33 14
Land 78 60
Inventory 27 20
Wages payable 7 8
The net increase (decrease) in cash from operating activities for 2018 was: __________
Answer:
$32
Explanation:
Particulars Amount
Cash from operating activities
Net Income $32
Add: Loss on sale of land $4
Depreciation Expense $14
Working Capital Changes
Increase in Accounts Payable $9
Increase in Accounts Receivable -$19
Increase in Inventory -$7
Decrease in Wages Payable -$1
Cash flow from operations $32
On December 31, 2020, the Bennett Company had 100,000 shares of common stock issued and outstanding. On July 1, 2021, the company sold 18,000 additional shares for cash. Bennett's net income for the year ended December 31, 2021, was $650,000. During 2021, Bennett declared and paid $71,000 in cash dividends on its nonconvertible preferred stock. What is the 2021 basic earnings per share
Answer:
$5.31
Explanation:
Earnings per share = Earnings Attributable to Holders of Common Stock ÷ Weighted Average Number of Common Stocks Outstanding
where,
Earnings Attributable to Holders of Common Stock is :
Net Income $650,000
Less Preference Stock dividend ($71,000)
Earnings Attributable to Holders of Common Stock $579,000
and
Weighted Average Number of Common Stocks Outstanding :
Common Stocks at Beginning outstanding 100,000
Stocks Sold at Weighted Average (18,000 / 2) 9,000
Weighted Average Number of Common Stocks Outstanding 109,000
therefore,
Earnings per share = $579,000 ÷ 109,000
= $5.31
The 2021 basic earnings per share is $5.31.
Every good speaker adapts to the audience. When adapting presentations for intercultural audiences, most people understand that they must make the basic language adaptations; however, more fundamental sensitivity is sometimes needed in relation to organization, speaking conventions, values, and nonverbal communication. When addressing cross-cultural audiences:__________.
a. use first names
b. anticipate differing expectations
c. deliver your main point first
What should you do when adjusting multimedia slides to intercultural audiences?
a. Progress through your slides rapidly.
b. Use a little more text than usual in your slides.
c. Put very little information in your slides.
Answer: 1. anticipate differing expectations
2. Use a little more text than usual in your slides.
Explanation:
1. Based on the fact that the presentation is for intercultural audiences, it is important for the speaker to anticipate differing expectations. The audience have different values, languages etc and their opinions and expectations may be quite different.
2. During the adjustment of multimedia slides to intercultural audiences, it's important to use a little more text than usual in your slides. This is vital so that the audience can comprehend the message that's being passed across. Progressing through the slides rapidly isn't ideal and there should be detailed information in the slides.
Rebecca Bennett is an 8-year-old who was recently diagnosed with diabetes mellitus. She is hospitalized with diabetic ketoacidosis, and she is beginning to learn about the disease process. Her parents are with her continually. She has an identical twin sister who is staying with her maternal grandparents.
Mrs. Bennett is concerned that Rebecca’s sister will also develop diabetes. Based on the preceding information, an acceptable response for the nurse to make would be to:________.
a. reassure the parents that the disease is not contagious.
b. discuss the hereditary and viral factors of type 1 diabetes.
c. discuss the hereditary factors of type 1 diabetes.
d. discuss the viral factors of type 1 diabetes.
Answer:
C
Explanation:
The company has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6%, and sells for 97% of par. The second issue has a face value of $40 million, a coupon rate of 6.5%, and sells for 108% of par. The first issue matures in 21 years, the second in 6 years. Suppose the most recent dividend was $3.25 and the dividend growth rate is 5%. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21%. What is the company’s WACC?
The following are data on three promissory notes. Determine the missing amounts. (Round answers to 0 decimal places, e.g. 5,275. Use 360 days for calculation.) Date of Note Terms Maturity Date Principal Annual Interest Rate Total Interest (a) April 1 60 days select a maturity date $630,000 5 % $enter a dollar amount (b) July 2 30 days select a maturity date 86,400 enter percentages % $576 (c) March 7 6 months select a maturity date 136,800 9 % $enter a dollar amount
Answer:
A. Maturity Date 31-May
Total Interest $5,250
B. Maturity Date 02-Aug
Annual interest rate 8%
C. Maturity Date 07-Sep
Total Interest $6,156
Explanation:
Calculation to Determine the missing maturity dates and Total interest and rates on notes.
Date of Note Terms Maturity Date Principal Annual Interest rate Total Interest
a. 01-Apr 60 days 31-May $630,000 5% $5,250
b. 02-Jul 30 days 02-Aug 86,400 8% $576
c. 07-Mar 6 months 07-Sep 136,800 9% $6,156
Working:
A. Calculation for Total Interest and Maturity Date
Total Interest= $630,000 x 5% x 60 days / 360 days
Total Interest = $5,250
Maturity Date
April 2-30 29
May 1-31 31
Total 60 days
B. Calculation for Annual Interest rate and Maturity date
First step is to calculate the 360 days Interest
360 days Interest = $576 x 360 days / 30 days
360 days Interest = $6,912
Now let calculate the Annual interest rate
Annual interest rate = ($6,912 / 86,400) x 100
Annual interest rate= 8%
Maturity Date
July 3-31 28
August 1-2 2
Total 30 days
C. Calculation for Total Interest and Maturity date
Total Interest = 136,800 x 9% x 6 months / 12 months
Total Interest =$6,156
Maturity date
March 8 to April 7 1
April 8 to May 7 1
May 8 to June 7 1
June 8 to July 7 1
July 8 to August 7 1
August 8 to Sep 7 1
Total 6 months
Therefore the missing maturity dates and Total interest and rates on notes are:
A. Maturity Date 31-May
Total Interest $5,250
B. Maturity Date 02-Aug
Annual interest rate 8%
C. Maturity Date 07-Sep
Total Interest $6,156
Video Planet (VP) sells a big screen TV package consisting of a 60-inch HDTV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer's home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,700, sells the remote separately for $100, and offers the installation service separately for $200. The entire package sells for $1,900.
Required: How much revenue would be allocated to the TV, the remote, and the installation service?
Answer:
Video Planet (VP)
The revenue that would be allocated to the TV, the remote, and the installation service:
TV = $1,615
Remote = $95
Installation service = $190
Explanation:
a) Data and Calculations:
Sales price of 60-inch TV = $1,700
Sales price of remote = $100
Installation service = $200
Total sales price, if sold separately = $2,000
Sales price of entire package = $1,900
Revenue allocated to the 3 performance obligations:
TV = $1,700/$2,000 * $1,900 = $1,615
Remote = $100/$2,000 * $1,900 = $95
Installation service = $200/$2,000 * $1,900 = $190
Total revenue allocated = $1,900
Which of the following two ARMs is likely to be priced higher, that is, offered with a higher initial interest rate?
a. ARM A has a margin of 3 percent and is tied to a three-year index with payments adjustable every two years; payments cannot increase by more than 10 percent from the preceding period; the term is 30 years.
b. ARM B has a margin of 3 percent and is tied to a one-year index with payments to be adjusted each year; payments cannot increase by more than 10 percent from the preceding period; the term is 30 years.
Answer: ARM A
Explanation:
The issuers of Adjustable-Rate Mortgage adjust its rate based on a certain index in the market, the purpose of which is to reflect the current cost being incurred by the issuer for loaning out money.
Both these mortgages are similar in everything except the index period. ARM A has a longer index period which means that it is expose to more forward rates and as the yield curve is generally upward trending(interest rates are higher in future), ARM A will be offered at a higher interest rate.
The basic determinant of the transactions demand for money is the multiple choice 1 interest rate. level of nominal GDP. reserve ratio. price level. b. The basic determinant of the asset demand for money is the multiple choice 2 interest rate. price level. level of nominal GDP. reserve ratio. c. Total money demand is the multiple choice 3 vertical sum of the private demand for money and the public demand for money. vertical sum of the transactions demand for money and the asset demand for money. horizontal sum of the consumer demand for money and the producer demand for money. horizontal sum of the transactions demand for money and the asset demand for money. d. The equilibrium interest rate in the money market is determined multiple choice 4 by how much the interest rate fluctuates over time. at the intersection of the aggregate demand and aggregate supply curves. at the intersection of the total demand for money curve and the supply of money curve. by the Fed. e. Complete the following statement: If there is an increase in the total demand for money, multiple choice 5 the equilibrium interest rate will rise. the money supply will rise. the money supply will fall. the equilibrium interest rate will fall. PrevQuestion 1 of 10 Total1 of 10Visit question mapNext
Answer:
1. level of nominal GDP.
2. interest rate.
3. horizontal sum of the transactions demand for money and the asset demand for money.
4. at the intersection of the total demand for money curve and the supply of money curve.
5. the equilibrium interest rate will rise.
Explanation:
In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.
Simply stated, money refers to any asset which can be used to purchase goods and services by customers.
This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.
Additionally, the rate at which an asset can be used to purchase any goods or services refers to its liquidity. Thus, liquidity is a quality or characteristics of money as a medium of exchange. Therefore, money is a generally accepted medium of exchange around the world.
The three (3) main functions of money all over the world are;
I. Medium of exchange.
II. Unit of account.
III. Store of value.
Some of the characteristics of money includes the following statements;
1. The basic determinant of the transactions demand for money is the level of nominal GDP.
2. The basic determinant of the asset demand for money is the interest rate.
3. Total money demand is the horizontal sum of the transactions demand for money and the asset demand for money.
4. The equilibrium interest rate in the money market is determined at the intersection of the total demand for money curve and the supply of money curve.
5. If there is an increase in the total demand for money, the equilibrium interest rate will rise.
The Clean Air Act (CAA) of 1970 did all of the following except _____.
establish the National Ambient Air Quality Standards (NAAQS)
introduce motor vehicle emissions controls
create State Improvement Plans (SIP) to promote better air quality
reduce the federal government's enforcement authority
Answer:
The Clean Air Act (CAA) of 1970 did all of the following except ___
reduce the federal government's enforcement authority__.
Answer:
reduce the federal government's enforcement authority
Explanation:
i got it right
The following information relates to the only product sold by Harper Company. Sales price per unit $ 45 Variable cost per unit 27 Fixed costs per year 247,000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
Answer and Explanation:
The computation is shown below
a.
For Contribution Margin ratio
We know that
Contribution margin per unit = Sale price per unit - Variable cost per unit
= $45 - $27
= $18
Now
Contribution margin ratio = Contibution Margin per unit ÷ Sale price per unit
= $18 ÷ $45
= 0.4
Now
Break even sales dollar
Break even sales = Fixed Cost ÷ Contribution margin ratio
= $247,000 ÷ 0.4
= $617,500
b.
For Margin of Safety
The Margin of safety = Actual sales - Break Even Sales
where,
Actual sales(in $) = 20000 × 45
= $900,000
So, Margin of safety is
= $900,000 - $617,500
= $282,500