Answer:
11,000 people
Explanation:
fixed costs per store $80,000
variable cost ratio 0.80
average sale per customer $15
average customer sales per week 1.75
customers as portion of population 4%
each customer shops 1.75 x 52 = 91 times per year
contribution margin per visit = $15 - ($15 x 0.8) = $3
contribution margin per client per year = $3 x 91 = $273
in order to make $40,000 in profits, you need at least:
($80,000 + $40,000) / $273 = 439.56 ≈ 440 customers
to determine the city's total population = 440 / 0.04 = 11,000
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six years to maturity, whereas Bond Dave has 19 years to maturity.
a) If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b) If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave?
Bond Sam's price will change by -9.12%Bond Dave's price will change by -18.05%b. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave?
Bond Sam's price will change by 10.26%Bond Dave's price will change by 24.35%Explanation:
Bond Sam
9% / 2 = 4.5% semiannual payments
6 years to maturity = 12 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 4.5%)¹² = $589.66PV of coupon payments = 35 x 9.11858 (PV annuity factor, 4.5%, 12 periods) = $319.15new market price = $589.66 + $319.15 = $908.81
if interest increases by 2%, present value (market value) will decrease by $91.19 ⇒ 9.12% decrease
if market interest rates decrease by 2%:
5% / 2 = 2.5% semiannual payments
6 years to maturity = 12 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 2.5%)¹² = $743.56PV of coupon payments = 35 x 10.25776 (PV annuity factor, 2.5%, 12 periods) = $359.02new market price = $743.56 + $359.02 = $1,102.58
if interest decrease by 2%, present value (market value) will increase by $102.58 ⇒ 10.26% increase
Bond Dave
9% / 2 = 4.5% semiannual payments
19 years to maturity = 38 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 4.5%)³⁸ = $187.75PV of coupon payments = 35 x 18.04999 (PV annuity factor, 4.5%, 38 periods) = $631.75new market price = $187.75 + $631.75 = $819.50
if interest increases by 2%, present value (market value) will decrease by $180.50 ⇒ 18.05% decrease
if market interest rates decrease by 2%:
5% / 2 = 2.5% semiannual payments
6 years to maturity = 12 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 2.5%)³⁸ = $391.28PV of coupon payments = 35 x 24.3486 (PV annuity factor, 2.5%, 38 periods) = $852.20new market price = $391.28 + $852.20 = $1,243.48
if interest decrease by 2%, present value (market value) will increase by $243.48 ⇒ 24.35% increase
On January 1, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months
Answer:
interest expense per coupon payment (every 6 months) = $153,000
Explanation:
In this case, since the bonds were sold at par, the interest expense and the actual cash payments are the same (no premium or discount would be amortized). To calculate the interest payment we just multiply the bonds' face value x annual interest rate x 1/2 (semiannual coupons) = $3,400,000 x 9% x 1/2 = $153,000
Marigold Corp. sells equipment on September 30, 2019, for $17,000 cash. The equipment originally cost $71,600 and as of January 1, 2019, had accumulated depreciation of $42,100. Depreciation for the first 9 months of 2019 is $5,350. Prepare the journal entries to (a) update depreciation to September 30, 2019, and (b) record the sale of the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
Only two entries are required.
Explanation:
Marigold Corporation
General Journal
Date Particulars Debit Credit
September 30 Depreciation Expense $5,350 Dr
Accumulated Depreciation $5,350 Cr
Updating the depreciation expense by $5350 and crediting accumulated depreciation account.
Recording the sale of the equipment.
September 30 Accumulated Depreciation $47,450 Dr
Cash $17,000 Dr
Loss on Sale $ 7150 Dr
Equipment $71,600 Cr
The equipment is sold for $ 17,000 cash and there's a loss of $ 7150.
1. Residents of the nation of Border Kingdom can forgo production of digital televisions and utilize all available resources to produce 300 bottles of high-quality wine per hour. Alternatively, they can forgo producing wine and instead produce 60 digital TVs per hour. In the neighboring country of Coastal Realm, residents can forgo production of digital TVs and use all resources to produce 150 bottles of high-quality wine per hour, or they can forgo wine production and produce 50 digital TVs per hour. In both nations, the opportunity costs of producing the two goods are constant.
a. What is the opportunity cost of producing digital TVs in Border Kingdom? Of producing bottles of wine in Border Kingdom?
b. What is the opportunity cost of producing digital TVs in Coastal Realm? Of producing bottles of wine in Coastal Realm?
2. Based on your answers to Problem above, which nation has a comparative advantage in producing digital TVs? Which nation has a comparative advantage in producing bottles of wine?
3. Critics of the North American Free Trade Agreement (NAFTA) suggest that much of the increase in exports from Mexico to the United States now involves goods that Mexico otherwise would have exported to other nations. Mexican firms choose to export the goods to the United States, the critics argue, solely because the items receive preferential treatment under NAFTA tariff rules. What term describes what these critics are claiming is occurring with regard to U.S.-Mexican trade as a result of NAFTA? Explain your reasoning.
4. Identify whether each of the following items creates a surplus item or a deficit item in the current account of the U.S. balance of payments.
a. A Central European company sells products to a U.S. hobby-store chain.
b. Japanese residents pay a U.S. travel company to arrange hotel stays, ground transportation, and tours of various U.S. cities, including New York, Chicago, and Orlando.
c. A Mexican company pays a U.S. accounting firm to audit its income statements.
d. U.S. churches and mosques send relief aid to Pakistan following a major earthquake in that nation.
e. A U.S. microprocessor manufacturer purchases raw materials from a Canadian firm.
5. Explain how the following events would affect the market for the Mexican peso, assuming a floating exchange rate.
a. Improvements in Mexican production technology yield superior guitars, and many musicians around the world buy these guitars.
b. Perceptions of political instability surrounding regular elections in Mexico make international investors nervous about future business prospects in Mexico.
6. Explain how the following events would affect the market for South Africa?s currency, the rand, assuming a floating exchange rate.
a. A rise in U.S. inflation causes many U.S. residents to seek to buy gold, which is a major South African export good, as a hedge against inflation.
b. Major discoveries of the highest-quality diamonds ever found occur in Russia and Central Asia, causing a significant decline in purchases of South African diamonds.
Answer:
1) a. 0.2 TVs , 5 bottles
b. 0.33 TVs , 3 bottles
2) Coastal realm has a comparative advantage in producing digital TVs.
Border Kingdom has a comparative advantage in producing bottles of wine.
Explanation:
1)
a. In Border Kingdom:
Opportunity cost of producing 300 bottles of wine = production of 60 TVs.
Thus opportunity cost of producing 1 bottle of wine = 60/300 = 0.2 TVs
Opportunity cost of producing 1 TV = 300/60 = 5 bottles.
b. In Coastal realm:
Opportunity cost of producing 1 bottle of wine = 50/150 = 0.33 TVs
Opportunity cost of producing 1 TV= 150/50 = 3 bottles
2)
From the above, it is seen that the opportunity cost of producing 1 wine bottle is lower for Border Kingdom and the opportunity cost of producing TV is lower for Coastal Realm, therefore, the country Border Kingdom should produce wine bottles and Coastal Realm should produce TV's.
Which of the following methodologies takes the list of desired customer attributes (CAs) generated by market research and turns them into a list of engineering attributes (EAs) that engineers can use?
A. Quality control processes.
B. Quality function deployment
C. Rapid phototyping
D. Marketing control
Answer: B. Quality function deployment
Explanation:
Quality function deployment is a very useful process to the manufacturing, healthcare and service industry that was introduced in the 1960s in Japan. It refers to the process of converting the needs and requirements of customers for a good generated by market research to actionable plans and specification that engineers can then use to create the product in question and thus satisfy the need of the customer.
Jim Keys holds a $200,000 portfolio consisting of the following stocks:_______.
Stock Investment Beta
Alpha $50,000 0.50
Beta $50,000 0.80
Gamma $50,000 1.00
Delta $50,000 1.30
What is the portfolio's beta?
Answer:
0.9
Explanation:
For the computation of portfolio beta first we need to follow some steps which is shown below:-
Step 1
Total Portfolio value = Value of Alpha + Value of Beta + Value of Gamma + Value of Delta
= $50,000 + $50,000 + $50,000 + $50,000
= $200,000
Step 2
Weight of Alpha = Value of Alpha ÷ Total Portfolio Value
= $50,000 ÷ $200,000
= 0.25
Step 3
Weight of Beta = Value of Beta ÷ Total Portfolio Value
= $50,000 ÷ $200,000
= 0.25
Step 4
Weight of Gamma = Value of Gamma ÷ Total Portfolio Value
= $50,000 ÷ $200,000
= 0.25
Step 5
Weight of Delta = Value of Delta ÷ Total Portfolio Value
= $50,000 ÷ $200,000
= 0.25
and finally
Beta of Portfolio = Weight of Alpha × Beta of Alpha + Weight of Beta × Beta of Beta + Weight of Gamma × Beta of Gamma + Weight of Delta × Beta of Delta
= 0.5 × 0.25 + 0.8 × 0.25 + 1 × 0.25 + 1.3 × 0.25
= 0.9
a. Using the starting point formula, what is the price elasticity of demand for going from a price of $160 per unit to a price of $140 per unit
Answer:
Price Elasticity of Demand is -4
Explanation:
We can see the graph and easily calculate the Q1 which is 120 units at P1 $140 and Q2 which is 80 units at P2 $160 price.
The starting point formula for calculating price elasticity of demand is given as under:
Price Elasticity of Demand = (ΔQ / Q2) / (ΔP / P2)
Here
ΔQ = Q1 - Q2 = 120 - 80 = 40 units
ΔP = P1 - P2 = 140 - 160 = - $20
By putting value in the above equation, we have:
Price Elasticity of Demand = (40 Units / 80 Units) / (-$20 / $160)
Price Elasticity of Demand = -4
Price Elasticity of Demand is -4
Calculation of the price elasticity of demand:Since in the graph it is mentioned that Q1 which is 120 units at P1 $140 and Q2 which is 80 units at P2 $160 price.
So we know that
Price Elasticity of Demand = (ΔQ / Q2) / (ΔP / P2)
where
ΔQ = Q1 - Q2 = 120 - 80 = 40 units
ΔP = P1 - P2 = 140 - 160 = - $20
Now
Price Elasticity of Demand
= (40 Units / 80 Units) / (-$20 / $160)
= -4
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A bond that pays interest annually yielded 6.01 percent last year. The inflation rate for the same period was 3 percent. Given that information, the actual real rate of return on this bond for last year was _____percent.
Answer:
2.3%
Explanation:
The computation of the actual real rate of return is shown below:-
Actual real rate of return on this bond for last year = ((1 + Nominal rate of interest ) ÷ (1 + Inflation rate of return)) - 1
= ((1 + 0.0601) ÷ (1 + 0.03)) - 1
= 1.0601 ÷ 1.03 - 1
= 1.023 - 1
= 0.023
or
= 2.3%
Therefore for computing the actual rate of return we simply applied the above formula.
If investors receive a 6% interest rate on their bank deposits, what real interest rate will they earn if the inflation rate over the year is:
Question
The complete question is given as follows:
if investors receive a 6% interest rate on their bank deposits, what real interest rate will they earn if the inflation rate over the year is:
a) 3%
b) 6%
Answer:
a) Real rate = 2.91%
b) Real rate = 0%
Explanation:
Inflation is the increase in the price level.It erodes the value of money.
Nominal interest is that quoted for investment or loan transactions. It has not been been adjusted for inflation.
Real interest rate is the amount of interest in terms of the the quantity of good and services that can be purchased. It is the nominal interest rate adjusted for inflation.
The relationship between inflation, real interest and nominal interest rate is given using the Fishers Effect;
R = (1+N)/(1+F) - 1=
N- Nominal interest rate
R- Real interest rate
F- Inflation rate
a) Where inflation rate is 3%
Real rate = (1.06/1.03 - 1)× 100 = 2.91%
b) Where inflation rate is 6%
Real rate = (1.06/1.06 - 1)× 100 = 0%
a) Real rate = 2.91%
b) Real rate = 0%
On July 1, Bramble Corporation purchases 670 shares of its $6 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 420 shares of the treasury stock for cash at $14 per share.
Journalize the two treasury stock transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Answer and Explanation:
The journal entries are shown below:
On July 1
Treasury stock Dr (670 shares × $9 per share) $6,030
To Cash $6,030
(Being the purchase of treasury stock is recorded)
For recording this we debited the treasury stock as it increased the treasury and credited the cash as it decreased the assets
On Sep 1
Cash Dr (420 shares × $14 per share) $5,880
To Treasury Stock (420 shares × $9 per share) $3,780
To Additional paid in capital - Treasury stock $2,100
(Being the resale of treasury stock is recorded)
For recording this we debited the cash as it increased the assets and credited the treasury stock and additional paid in capital as the sale is made
Product X used the following quantity of activity drivers to produce 100 units of final product: 25 setups, 40 material moves and 75 machine hours What is the total indirect manufacturing cost per unit for product X based on an ABC system? g
Answer:
$137.50 per unit
Explanation:
The computation of the total indirect manufacturing cost per unit is shown below:
Machine setups 15000 ÷ 100 × 25 = $3750
Material moves 22500 ÷ 225 × 40 = $4000
M/c. Operations 14000 ÷ 175 × 75 = $6000
Total Cost for 100 units $13,750
And since there is 100 units
So, the total indirect manufcturing cost per unit is
= $13,750 ÷100 units
= $137.50
What is capital budgeting? a. The process of managing cash flow. b. The analysis of real asset investment opportunities. c. The process of managing current assets. d. None of the above.
Answer:
b. The analysis of real asset investment opportunities.
Explanation:
Capital Budgeting is the Process of appraising various alternatives of investments.
It uses techniques such as the Net Present Value methods, Internal Rate of Return and Payback Period methods to analyze the best alternatives of investments.
Wine and Roses, Inc. offers a 7% coupon bond with semiannual payments and a yield to maturity of 7.73%. The bonds mature in 9 years. Blank 1. Fill in the blank, read surrounding text. is the market price of a $1,000 face value bond
Answer:
current market price = $953.29
Explanation:
the market price of the bond = present value of the face value + present value of coupon payments
PV of face value = $1,000 / (1 + 3.865%)¹⁸ = $505.31
PV of coupon payments = $35 x 12.79935 (PV annuity factor, 3.865%, 18 periods) = $447.98
current market price = $505.31 + $447.98 = $953.29
The American Red Cross and the American Medical Association are nonprofit businesses. This is because they: A. plan to make a profit by selling services to other countries. B. exist to benefit a cause but not to make a profit. C. share profits with top management but not with workers. D. sell services directly to customers to make a higher profit.
Answer:B exist to benefit a cause but not to make a profit.
Explanation:
They are to provide services which are useful to the members of the society at large. They exist to promote the interest of members of the public which are social in nature. With a view to ensure the smooth running of the organisation some individuals are elected to run the organisation in the position of chairman, secretary, and treasurer. They do prepare receipt and payment account which is similar to cash account while some do prepare income and expenditure account which is similar to profit and loss account.
orrugated Company currently produces cardboard boxes in an automated process. Expected production per month is 40,000 units. The required direct materials cost $0.30 per unit. Manufacturing fixed overhead costs are $24,000 per month. Manufacturing overhead is allocated based on units of production. ___________ is the flexible budget for 40,000 and 20,000 units, respectively.
Answer:
$36,000 and $30,000
Explanation:
Corrugated company deals in the production of cardboard boxes
The expected production for each month is 40,000 units
The direct material cost is $0.30 per unit
The manufacturing fixed overhead costs are $24,000 for each month
Therefore, the flexible budget for the production of 40,000 units and 20,000 units can be calculated as follows
Flexible budget for 40,000 units
= 0.30×40,000+24,000
= 12,000+24,000
= $36,000
Flexible budget for 20,000 units
= 0.30×20,000+24,000
= 6,000+24,000
= $30,000
Hence the flexible budget for 40,000 units and 20,000 units are $36,000 and $30,000 respectively
What is the primary determinant of one's personal ethical standard?
Answer:
The primary determinant of one's personal ethical standard is one's goals and expectations, but it can also be religion for some people.
The primary determinant of one's personal ethical standard are the moral development, family influences, life experiences.
What is ethical standard?Ethical standards are ideals that promote trust, ethical behavior, and fairness while also guiding a person's activities. Ethics is what motivates us to speak the truth, fulfill our vows, and assist those in need. When a company establishes a professional ethical code of conduct, it aligns employee behavior.
The personal ethical standard is defined by one's aspirations and expectations. Community, religion, and legal and moral considerations all have an impact on ethical behavior. Moral growth, family influences, personal ideals, life experiences, and peer influences all influence a person's ethical standards.
As a result, the primary determinant of one's personal ethical standard are the moral development, family influences, life experiences.
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Eric deposits 100 into a savings account at time 0, which pays interest at a nominal rate of i, compounded semiannually. Mike deposits 200 into a different savings account at time 0, which pays simple interest at an annual rate of i. Eric and Mike earn the same amount of interest during the last six months of the 8th year. Calculate i.
Answer:
9.46%
Explanation:
Eric gets compounded interest = principal x (1 + interest rate)ⁿ
Mike gets simple interest = principal x [1 + (interest rate x n)]
during the first 7.5 years, Eric will get: 100 x (1 + 0.5i)¹⁵, in order to simplify the calculations we can call this Principal₇.₅
during the last 6 months Eric will earn: [Principal₇.₅ x (1 + 0.5i)] - Principal₇.₅ *WE ONLY WANT TO CALCULATE THE INTEREST, NOT THE PRINCIPAL
Principal₇.₅ + Principal₇.₅ (0.5i) - Principal₇.₅ = Principal₇.₅ (0.5i)
now we replace Principal₇.₅ (0.5i):
100 x (1 + 0.5i)¹⁵ x 0.5i = 50i x (1 + 0.5i)¹⁵
since Mike earns simple interest, during the last 6 months he will earn:
200 x 0.5i = 100i
now we equal both equations:
50i x (1 + 0.5i)¹⁵ = 100i
(1 + 0.5i)¹⁵ = 100i / 50i = 2
(1 + 0.5i)¹⁵ = 2
¹⁵√(1 + 0.5i)¹⁵ = ¹⁵√2
1 + 0.5i = 1.04729
0.5i = 1.04729 - 1 = 0.04729
i = 0.04729 / 0.5 = 0.09458 = 9.46%
When a country produces on its production possibilities curve, then this country's unemployment is expected to be at one of its lowest rates, however, prices in this country are not expected to be relatively low.
a. True
b. False
Answer:
TRUE
Explanation:
the production possibility curve shoes the number of goods that can be produced in an economy when its resources are fully employed.
if a country produces on its production possibilities curve, it means that its resources are fully employed and so unemployment would be at its lowest.
Don Wyatt is unable to reconcile the bank balance at January 31. Don?s reconciliation is as follows.
Cash balance per bank $3,800.20
Add: NSF check 570.00
Less: Bank service charge 35.00
Adjusted balance per bank $4,335.20
Cash balance per books $4,115.20
Less: Deposits in transit 650.00
Add: Outstanding checks 940.00
Adjusted balance per books $4,405.20
Prepare a correct bank reconciliation.
Answer and Explanation:
The preparation of the correct bank reconciliation is presented below:
Don Wyatt
Bank reconciliation statement
January 31
Particulars Amount Particulars Amount
Bank cash balance $3,800.20 Company cash balance $4,115.20
Deposits in transit $650 Less: NSF check -$570
Less: Outstanding Less: service fee -$35
Check -$940
Bank balance Company balance
After reconciliation $3,510.20 After reconciliation $3,510.20
We adjust the transactions according to the bank balance and book balance so that the both balance could be matched accordingly
Cobe Company has already manufactured 23,000 units of Product A at a cost of $25 per unit. The 23,000 units can be sold at this stage for $420.000. Alternatively, the units can be further processed at a $280.000 total additional cost and be converted into 6.000 units of Product B and 11,900 units of Product C. Per unit selling price for Product B is $106 and for Product C is $52.
Required:
Prepare an analysis that shows whether the 23,000 units of Product A should be processed further or not.
Answer:
It is more profitable to continue processing the units.
Explanation:
Giving the following information:
Product A:
Units= 23,000
Selling price= $420,000
Continue processing:
Product B= 6,000 units sold for $106 each
Product C= 11,900 units sold for $52 each
Total cost= $280,000
We need to calculate the effect on the income of both options and choose the most profitable one. We will not take into account the first costs of Product A because they are irrelevant.
Option 1:
Effect on income= $420,000
Option 2:
Effect on income= (6,000*106) + (11,900*52) - 280,000
Effect on income= $974,800
It is more profitable to continue processing the units.
Sleep Tight, Inc. manufactures bedding sets. The budgeted production is for 49,700 comforters this year. Each comforter requires 1.5 hours to cut and sew the material. The cost of cutting and sewing labor is $19.70 per hour. Determine the direct labor budget for this year.
Answer:
Total direct labor hours= 74,550
Total direct labor cost= $1,468,635
Explanation:
Giving the following information:
Production= 49,700 units
Each comforter requires 1.5 hours to cut and sew the material.
The cost of cutting and sewing labor is $19.70 per hour.
We need to determine the direct labor budget:
Direct labor budget:
Total direct labor hours= 49,700*1.5= 74,550
Total direct labor cost= 74,550*19.7= $1,468,635
Stan Slickum has a used car that can be bought for $8 comma 500 cash or for a $1 comma 000 down payment and $770 per month for 12 months. What is the effective annual interest rate on the monthly payment plan?
Answer:
48.8%
Explanation:
We can use the rate formula to determine the monthly rate as follows:
=rate(nper,pmt,-pv,fv)
nper is the number of monthly payments which is 12
pmt is the amount of monthly payment which is $770
pv is the cash price of the minus downpayment i.e $8500-$1000=$7500
fv is the balance after all payments have been made i.e $0
=rate(12,770,-7500,0)=3.37%
effective monthly rate=(1+3.37% )^12-1=48.8%
Would you expect a brick-and-mortar retailer or an online retailer to have a higher asset turnover? Why or why not? Which supply chain drivers impact asset turnover?
Answer:
An online retailer would on a balance of probability have a higher asset turnover than a brick-and-mortar retailer.
Explanation:
The reason is not farfetched. If done properly, an online retailer is most likely to succeed at reaching more customers and penetrating more markets.
The total population of active internet users is currently estimated at 4.5 Billion. For truly global products or retail outlets such as Amazon and Alibaba, this figure is staggering. It is impossible to compare a truly successful online retailer to a brick-and-mortar retailer whose market, at its best, covers only those within its locality.
So using online retail store such as Amazon as an example, they might have significant investment in online platforms, dedicated servers and warehouses, their turnover which as at 2019 stood at 4.5x is relatively strong.
The supply chain drivers which impact asset turnover are inventory, accounts receivables and facilities.
Cheers!
You write one JNJ February 70 (strike price) put for a premium of $5. Ignoring transactions costs, what is the break-even price of this position
Answer:
$65
Explanation:
The computation of the break even price for this position is shown below:
Break even price is
= Strike price - premium
= $70 - $5
= $65
The stock goes upward to $65 so you lose only $5 but it falls than the stock would be $0
Hence, the break even price of this position is $65
Therefore by applying the above formula we can get the break even price and the same is to be considered
When Acme Dynamite produces 250 units of output, its variable cost is $2,000, and its fixed cost is $500. It sells each unit of output for $25. If the price of dynamite drops to $10, should Acme Dynamite continue to operate in the short run?
Answer:
The firm will continue to produce in the short run.
Explanation:
Given the number of units produced by Acme Dynamite = 250 units.
The variable cost of producing the 250 units = $2000
The fixed cost = $500
The selling price = $25 per unit.
The new price after the fall in price = $10
Total revenue from the selling of 250 units = 250 × 10 = $2500
Since the revenue received is covering the variable cost and fixed cost. Thus, the firm will produce or continue to produce in the short run.
"A customer places an order with a registered representative to sell 5,000,000 shares of ABC stock (NYSE listed) "at the market." The registered representative should:"
Answer:
Contact the firm's large block trading desk.
Explanation:
The reason why the registered representative would contact the firm's large block trading desk is because the order is larger than what can be handled normally on the Newyork Stock Exchange (NYSE) floor. Where large order as in the above is to be sold on the stock exchange floor, such would normally be presented to the firm's large block trading desk who will now decide on how best to handle the order; hence not the duty of registered representative.
Based on past experience, the trade desk would likely hand over the order to one of ABC's stock brokers for execution because for example, Super Display Book - NYSE automated system, which is responsible for dealing NYSE listed issues, has certain limited orders they can take.
An estimated demand curve does not necessarily match actual data perfectly because A. it is not possible to accurately calculate the coefficients of the curve. B. demand is unpredictable. C. some factors that are not measured or observed may affect the curve. D. the random error term has too large of a range.
Answer:
C. some factors that are not measured or observed may affect the curve.
Explanation:
a lot of unforeseen circumstances might occur. these occurrences would not be measured in the estimated demand curve. this would lead to the estimated demand curve not matching the actual demand curve.
for example, the factors affecting the demand for bread are ; price, income, price of a substitutes. these are included in estimating the demand curve for bread. Assume that a study comes out stating that bread is harmful to the health.this reduces the demand for bread. this study wasn't anticipated and included in estimating the demand curve. as a result, the actual data would differ from the estimated data
The Cell Inc., a microbiology research laboratory headquartered in the United States, has been losing money. The CEO decides to outsource some production to companies in developing countries. This decision to shift functions or processes to less developed countries is most likely due to their
Answer:
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The decision of the Ceo of Cell Inc. microbilogy research laboratory to outsource some production in developing countries so that maximum output and fast deliveries can be expected to customers and also by the company can focus on various other factors affecting the business.
What is a research laboratory?The scientific lab where the experiments or products research are made so that new products can be made or existing can be replaced in chemical biological or physical aspects.
What is outsourcing?The practice which is done by an individual or an organization by using third party to carry their business activities like performing tasks giving services to customers etc.
What is third party?The company or an individual which comes in between two aspects and try to manage or solve the issue or give solutions
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Suppose that a perfectly competitive firm faces a market price of $7 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1 comma 400 units. If the firm produces 1 comma 400 units, its average variable costs equal $6.50 per unit, and its average fixed costs equal $0.80 per unit.
Required:
a. What is the firm's maximizing (or loss-minimizing output level?
b. What is the amount of it's economic profits (or losses) at this output level?
Answer:
1. This firm have the profit maximizing output level of 1400 units because a firm in any industry will maximize profit where MR=MC. Here MR is equal to MC at the output level of 1400. So profit maximizing level of output is 1400 units.
2. Economic profit = Total revenue - total cost.
Where, Total revenue = Quantity * price
= 1400 * 7
= $9,800
Total variable cost = AVC * quantity
= 6.50 *1400
= $9,100
Total fixed cost = AFC * quantity
= 0.80 * 1400
= $1,120
Economic profit = Total revenue - Total variable cost - Total fixed cost
Economic profit = $9,800 - $9,100 - $1,120
Economic profit = -$420
. The firm is having economic loss equal to 420.
Conclusion: This firm is facing economic loss in its output.
On March 12, Medical Waste Services provides services on account to Grace Hospital for $10,900, terms 3/10, n/30. Grace pays for those services on March 20.
For Medical Waste Services, record the service on account on March 12 and the collection of cash on March 20.
Record service revenue on account
date general journl Debit credit
March 12
Record cash revenue on account
date general journl Debit credit
March 20
Answer:
March 12
Accounts Receivable 10900 Dr
Service Revenue 10900 Cr
March 20
Cash 10573 Dr
Service discount 327 Dr
Accounts Receivable 10900 Cr
Explanation:
March 12
The provision of services on account is recorded by a debit ot the asset account in form of accounts receivable and a credit to the service revenue. The full amount/ gross amount of service revenue is recorded as we assume that we use the gross method to record the service revenue.
March 20
The terms of credit which are 3/10 means that a 3% discount is allowed by Medical Waste Services if the Grace Hospital pays within the 10 days of the service provided on account. As the Grace Hospital pays within this period, a service discount of 10900 * 0.03 = 327 is allowed.
The remaining cash to be collected is 10900- 327 = 10573