Answer:
$2 billion
The amounts that would be included in GDP include the cost of hiring workers and the cost of cleaning up the spill.
1 billion + 1 billion = $2 billion
The negative effects of the oil spill would not be included in GDP because effects of population is not included in GDP.
Also, the value of the oil discovered would not be included in GDP because it was not sold in the current year.
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
services not rendered to oneself
Activities not reported to the government
illegal activities
sale or purchase of used products
sale or purchase of intermediate products
Nominal GDP is GDP calculated using current year prices while Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation.
What do researchers mean by "secondary data"?
A. Data considered less important than primary data
B. Data collected after any research to gather primary data
C. Information from research already conducted for another purpose
O D. Data collected specifically for the researcher's own study
Answer:
C. Information from research already conducted for another purpose
Explanation:
Secondary data is research information that is already available for use by other researchers. It is data that was collected previously for different purposes but is relevant in the current study. Secondary data consists of information collected as part of an organization's or government's routine tasks.
Secondary data contrast primary data, which is collected specifically for the current data. Sources of secondary data include books, libraries, internet searches, and information from government departments.
Answer:
c
Explanation:
I. Journalize the following transactions: 1. Madison Co. purchased $225,500 of raw materials on account. 2. Actual manufacturing overhead costs include: a. Utilities : $2,800 b. Depreciation on equipment: $12,650 c. Repairs on account: $3,200 d. Rent paid, $6,000 e. Insurance (prepaid policy): $3,350 3. Madison Co. issued $75,500 of material to Process A. 4. Assigned $18,000 is factory labor, of which $12,000 is indirect labor 5. Manufacturing Overhead costs are applied at 82% of material issued 6. Balance in WIP – A is transferred to Process –B 7. $51,000 of material is issued to Process – B 8. Assigned $22,000 of factory labor, of which $15,000 is indirect labor 9. Manufacturing overhead costs are applied to Process B at a rate of 62.5% of material issued (to process B) 10. Actual manufacturing overhead costs paid totaled $39,500; manufacturing overhead costs charged to accounts payable totaled $1,500 11. Balance of Process B is transferred to Finished Goods 12. The cost transferred to finished goods included 62,500 units. Calculate the cost per unit (round to hundredths); Madison Co. sold 13,250 units for $79,000 cash; they sold 4,125 units for $24,500 on account 13. Determine over or under-applied manufacturing overhead and prepare adjusting entry.
Answer and Explanation:
Dr raw materials 225000
Cr accounts payable 225000
Dr wages 40000
Cr materials 40000
Dr manufacturing overhead 28000
Cr cash 2800
Cr accumulated depreciation 12650
Cr rent 3200
Cr repairs 6000
Cr prepaid insurance 3350
Work in progress A Dr 75500
Raw material Cr 75500
Work in progress A Dr 6000
Manufacturing overhead Dr 12000
Wages Cr 18000
Work in progress A Dr 61910
Manufacturing overhead cr 61910
cash dr 79500
account receivable dr 24500
Sales cr 104000
cost of goods Dr 64853
Finished goods Cr 64853
Manufacturing overhead Dr 9785
Cost of goods sold Cr 9785
Note
Work in progress A to overhead calculated 82% of 79500=61910
Prepare summary journal entries to record the following transactions for a company in its first month of operations. a. Raw materials purchased on account, $98,000. b. Direct materials used in production, $41,500. Indirect materials used in production, $18,800. c. Paid cash for factory payroll, $45,000. Of this total, $33,000 is for direct labor and $12,000 is for indirect labor. d. Paid cash for other actual overhead costs, $8,125. e. Applied overhead at the rate of 125% of direct labor cost. f. Transferred cost of jobs completed to finished goods, $63,000. g1. Jobs that had a cost of $63,000 were sold. g2. Sold jobs on account for $90,000.
Answer and Explanation:
The Journal entries are prepared below:-
a. Raw materials inventory Dr, $98,000
To Accounts payable $98,000
(Being raw material is purchased on the account is recorded)
b. Work in process inventory Dr, 41,500
To Raw materials inventory $41,500
(Being direct material used is recorded)
Factory overhead Dr, 18,800
To Raw materials inventory $18,800
(Being indirect material used is recorded)
c. Work in process inventory Dr, $45,000
Factory overhead Dr, $33,000
To Cash $78,000
(Being cash paid is recorded)
d. Factory overhead Dr, $8,125
To Cash $8,125
(Being cash paid is recorded)
e. Work in process inventory Dr, $56,250 (45,000 × 125% )
To Factory overhead $56,250
(Being overhead is recorded)
f. Finished goods inventory Dr, $63,000
To Work in process inventory $63,000
(Being transferred cost is recorded)
g, Cost of goods sold Dr, $63,000
To Finished goods inventory $63,000
(Being cost of goods sold is recorded)
Accounts receivable Dr, $90,000
To Sales $90,000
(Being sales value is recorded)
XYZ Corporation has a 6 1/2% convertible bond outstanding that is convertible into 40 shares of common stock. The bond is currently selling in the market at 85 ($850) and the common stock is selling at 21. The XYZ Corporation is offering its existing bondholders a new straight (nonconvertible) bond paying 6 1/2% that matures at the same time as the convertible bond. The effect of the successful completion of the proposal would be to:_________
a) Reduce interest costs
b) Reduce potential dilution
c) Have no effect on interest costs
d) Increase dilution
Answer:
b) Reduce potential dilution
c) Have no effect on interest costs
Explanation:
Since in the question it is mentioned that the corporation is offering its existing bondholders for paying 6 1/2% this matured at the same time just like the convertible bond.
So here if the proposal is completed so the impact would be reduction in the potential dilution also it would not have impact on the effect on the interest rate and the same is to be considered
Selected information from Green Co.'s accounting records and financial statements is as follows:
Gain an sale of 1 Proceeds fron sales to custoners and s 12,802 21,s0a Purchase of Black, Inc. bonds (face amount $205,) 367,a0 Amortization of bond discount Cash dividends declared Cash dividends paid 4,800 98,000 72,800 157,600 Proceeds from sales of Green Co. comon stock
What are the net cash flows from financing activities that will be reported in the statement of cash flows? (Enter net cesh outflows with a minus sign.)
Answer:
$84, 200
Explanation:
Calculation for the net cash flows from financing activities that will be reported in the statement of cash flows
Using this formula
Net cash flows =Common stock Proceeds from sales - Cash dividends paid
Let plug in the formula
Net cash flows = 157,000-72,800
Net cash flows =$84, 200
Therefore the net cash flows from financing activities that will be reported in the statement of cash flows is $84, 200
Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Container Corporation purchased computer equipment, installation and training for a total cost of $144,000 on March 15, 2021. Estimated standalone fair values of the equipment, installation, and training are $90,000, $60,000, and $30,000 respectively. Determine The transaction price allocated to equipment is The transaction price allocated to installation is The transaction price allocated to training is Express your answer as an integer without $ sign (Round all computations to the nearest dollar. For example, input "100,000" if your answer is $100,000.22).
Answer & Explanation:
If the services were sold separately, their total cost would be;
= 90,000 + 60,000 + 30,000
= $180,000
They were instead bundled together and sold for $144,000
The cost of the individual services will therefore be a proportion of this bundled price based on their proportion were they sold alone.
The transaction price allocated to equipment;
= (90,000/180,000) * 144,000
= $72,000
The transaction price allocated to installation;
= (60,000/180,000) * 144,000
= $48,000
The transaction price allocated to training;
= (30,000/180,000) * 144,000
= $24,000
Erics - Automotive Final Exam
Page 15 of 17
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Economic Order Quantity computes:
A: Cost of an order
B: Re-order level
C: Cost of stock
D: Optimum Order size
Answer:
D: Optimum Order size
Explanation:
Economic Order Quantity (EOQ) is a formula applied in logistic and supply chain management to calculate a business's ideal order size. As the name suggests, the order EOQ provides an order quantity that makes economic sense.
Economies of scale suggest that a bigger order size is better because the business will save transport costs. However, ordering in large quantities increases the cost of holding stock. The economic order quantity strikes a balance between these two important factors.
Hudek Inc., a manufacturing Corporation, has provided the following data for the month of July. The balance in the Work in Process inventory account was $20,000 at the beginning of the month and $10,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $50,000 and direct labor cost of $22,000. The actual manufacturing overhead cost incurred was $58,000. The manufacturing overhead cost applied to Work in Process was $56,000. The cost of goods manufactured for July was:
Answer:
$138,000
Explanation:
The computation of cost of goods manufactured for July is shown below:-
Cost of goods manufactured for July = Opening work in progress + Direct material + Direct labor + Manufacturing cost - Closing work in progress
= $20,000 + $50,000 + $22,000 + $56,000 - $10,000
= $148,000 - $10,000
= $138,000
Therefore for computing the cost of goods manufactured for July we simply applied the formula.
Which comment is someone who has a conventional personality type likely to make?
"Don't tell me, show me."
"Just do it."
O "How can I help?"
"Status is important to me."
O " express myself, therefore I am."
Answer:
"how can i help"
Explanation:
customer service
Your company has a line of credit through a local bank. The bank requires a 6% compensating balance and charges 12% on the amount borrowed against the line. If the company needs $100,000 to purchase inventory, find the amount it should borrow, and calculate the effective annual rate on the loan (b) You’ve worked out a line of credit arrangement that allows you to borrow up to $100 million at any time. The interest rate is 0.4 percent per month. In addition, 5% of the amount that you borrow must be deposited in a non-interest bearing account (i.e. a compensating balance). Assume that your bank uses compound interest on its line of credit loans. What is the effective annual rate (EAR) on the loan? W
Answer:
A) 19.15%
B) 68.53%
Explanation:
as it requires 6% of compensating balance the company you ask for:
$100,000 / (1 - 6%) = 106.382,98
Now we solve for the effective rate.
106,382.98 x (1 + 0,12) = 100,000 x (1 + r)
r = 119.148,93/100,000 - 1 = 0,1914893
B) we do the same procedure as the previous one
[tex]1/(0,95) (1+0.04)^{12} = 1+r_e[/tex]
re 0,685297072
Hey guys i dont know who to vote for plz give me suggestions and reasons why
Answer:
me ig im just trying to get more points and brainliest
Explanation:
also im nice :) when people are not rude to me
Who is better Mario or Sonic
Answer:
both but I think that sonics better but for old people they probably like mario
You can buy a property today for $4 million and sell it in 6 years for $5 million. You will not earn any rental income on the property. Answer the following questions. a.) If the interest rate is 5%, what is the present value of the sales price? _____________ (4 pts) b.) Is this a good investment for you? Explain your answer ____________________________ _______________________________________________________________________(4 pts) c.) If the interest rate is 5%, what is the present value of the sales price if you also earned $200,000 in rental income each year? _______________________________________________(4 pts)
Answer:
a. Present value = $3,731,076.98
It is not a good investment because the present value of the sales price is less than the purchase price of the property. This means that purchasing the property would be unprofitable.
c. Present value = $4,746,215.40
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
a. Cash flow each year from year 1 to 5 = 0
Cash flow in year 6 = $5,000,000
I = 5%
Present value = $3,731,076.98
It is not a good investment because the present value of the sales price is less than the purchase price of the property. This means that purchasing the property would be unprofitable.
c. Cash flow each year from year 1 to 5 = $200,000
cash flow in year 6 = $200,000 + $5,000,000 = $5,200,000
I = 5%
Present value = $4,746,215.40
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Exercise 3-59 (Algorithmic) Preparation of Closing Entries Grand Rapids Consulting Inc. began 2019 with a retained earnings balance of $28,900 and has the following accounts and balances at year end: Sales Revenue $163,820 Salaries Expense 91,660 Rent Expense 10,550 Utilities Expense 8,415 Supplies Expense 4,348 Income Taxes Expense 13,800 Dividends (declared and paid) 8,400 Required: 1. Prepare the closing entries made by Grand Rapids Consulting at the end of 2019. If an amount box does not require an entry, leave it blank. Dec. 31 (Close revenue accounts) Dec. 31 (Close expense accounts) Dec. 31 (Close Income Summary) Dec. 31 (Close Dividends account) 2. Prepare Grand Rapids Consulting's retained earnings statement for 2019. Grand Rapids Consulting Inc. Retained Earnings Statement For the Year Ended December 31, 2019 $ $
Answer:
1) December 31, 2019, closing entry for revenue account
Dr Sales revenue 163,820
Cr Income statement 163,820
December 31, 2019, closing entry for expense accounts
Dr Income statement 128,773
Cr Salaries Expense 91,660
Cr Rent Expense 10,550
Cr Utilities Expense 8,415
Cr Supplies Expense 4,348
Cr Income Taxes Expense 13,800
December 31, 2019, closing entry for income statement account
Dr Income statement 35,047
Cr Retained earnings 35,047
December 31, 2019, closing entries for dividends account
Dr Retained earnings 8,400
Cr Dividends 8,400
2) Grand Rapids Consulting Inc.
Retained Earnings Statement
For the year ended December 31, 2019
Beginning balance January 1 ,2019 $28,900
Net profits $35,047
Sub-total $63,947
Dividends ($8,400)
Ending balance December 31 ,2019 $55,547
Which of the following statements about normal costing is not true? Group of answer choices Manufacturing overhead is allocated using budgeted rate and actual cost allocation base used. Direct costs and indirect costs are traced using an actual rate. Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate. Manufacturing overhead is allocated using budgeted rate and budgeted cost allocation base. Direct costs and indirect costs are traced using budgeted rates. Direct costs are traced using a budgeted rate, and indirect costs are allocated using an actual rate.
Answer:
Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate
Explanation:
Normal costing refers to the actual cost of direct materials, direct labor, and manufacturing overhead applied. This cost is calculated by using a predetermined annual overhead rate.
Direct costs are expenses involved in producing goods or providing services and indirect costs are general expenses that are involved in operating.
The statement about normal costing which is not true is ''Direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate''
Lovely Company offers a 2-year warranty on its product and as of 1/1/2018 Lovely’s warranty liability had an overall balance of $415. During 2018 Lovely sold 1,600 units of inventory at a selling price of $125 per unit and repaired 62 units under warranty at a total repair cost to Lovely of $740. When accounting for warranty cost, Lovely studies prior year customer claims as well as projected labor and material costs and for 2018, Lovely estimated that 4% of the units sold in 2018 would break over the 2-year warranty period at an estimated repair cost of $12.50 per unit. What amount should Lovely report at 12/31/2018 as warranty liability
Answer:
$475
Explanation:
the summary journal entry to record sales revenue and warranty expense during 2018:
Dr Cash 200,000
Cr Sales revenue 200,000
Dr Warranty expense 800
Cr Warranty liability 800
The journal entry to account for actual warranty costs:
Dr Warranty liability 740
Cr Cash (or wages payable or inventory) 740
the December 31, 2018 balance of warranty liability = initial balance + warranty liability associated to 2018 sales - incurred warranty costs = $415 + $800 - $740 = $475
what is business mathematics ? and what are the basics of business mathematics ?
Answer: Business calculation is mathematics used by industrial companies to record and maintain enterprise operations. Profit-making organizations use mathematics in accounting, catalog management, retailing, deals forecasting, and monetary analysis.
Answer: Business mathematics are mathematics used by commercial enterprises to record and manage business operations. Commercial organizations use mathematics in accounting, inventory management, marketing, sales forecasting, and financial analysis.
What ethical issues may arise during secondary data research?
Answer:
hope it helps..
Explanation:
For this to happen, use of secondary data must meet some key ethical conditions: Data must be de-identified before release to the researcher. Consent of study subjects can be reasonably presumed. Outcomes of the analysis must not allow re-identifying participants.
Which of the following provides the correct sequence in the marketing research process? 1. defining the problem, analyzing the situation, getting problem-specific data, interpreting the data, solving the problem 2. analyzing the situation, defining the problem, getting problem-specific data, interpreting the data, solving the problem 3. getting problem-specific data, interpreting the data, defining the problem, solving the problem, analyzing the situation 4. analyzing the situation, getting problem-specific data, interpreting the data, defining the problem, solving the problem 5. getting problem-specific data, interpreting the data, analyzing the situation, defining the problem, solving the problem
Answer:
Marketing Research Process
The correct sequence is:
1. defining the problem, analyzing the situation, getting problem-specific data, interpreting the data, solving the problem
Explanation:
A good market research process requires a clear definition of the research problem. This definition is required to focus the research efforts on the identified problem.
Secondly, the situation must be analyzed to enable the development of a good marketing plan, which is the fulcrum of the research.
The third stage is the collection of relevant data that are problem-specific because only relevant data can solve the research questions.
At the fourth stage, the carefully selected and collected data are then analyzed and interpreted in order to create understanding of the issues and help point to solutions based on findings.
Finally, the need to put the identified solutions into action becomes imperative. Information discovered during the research must be put into action to resolve the problem.
In 2013, Space Technology Company modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures:
Basic research to develop the technology $ 2,000,000
Engineering design work 680,000
Development of a prototype device 300,000
Acquisition of equipment 60,000
Testing and modification of the prototype 200,000
Legal and other fees for patent application on the new
communication system 40,000
Legal fees for successful defense of the new patent 20,000
Total $ 3,300,000
The equipment will be used on this and other research projects. Depreciation on the equipment for 2013 is $10,000.
During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all of the above as costs of the patent. Management contends that the device simply represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized.
Required:
Prepare correcting entries that reflect the appropriate treatment of the expenditures.
1. Record the correcting entry to expense R&D costs incorrectly capitalized
2. Record the correcting entry to capitalize the cost of equipment incorrectly capitalized as a patent.
3. Record the correcting entry to record depreciation on equipment used in R&D projects.
Answer:
1. Dec 31
Dr Research and Development Expense $3,180,000
Cr 2013 Patent $3,180,000
2. Dec 31
Dr Equipment $60,000
Cr 2013 Patent $60,000
3. Dec 31
Dr Research and Development Expense $10,000
Cr 2013 Accumulated Depreciation - Equipment $10,000
Explanation:
1. Preparation of the Journal entry to Record the correcting entry to expense R&D costs incorrectly capitalized
Dec 31
Dr Research and Development Expense $3,180,000
Cr 2013 Patent $3,180,000
(To record research and development expense )
Calculation for the Total of research and development expense
Basic research to develop the technology $2,000,000
Engineering design work $680,000
Development of a prototype device $300,000
Testing and modification of the prototype $200,000
Total research and development expense $3,180,000
2. Preparation of the journal entry to Record the correcting entry to capitalize the cost of equipment incorrectly capitalized as a patent.
Dec 31
Dr Equipment $60,000
Cr 2013 Patent $60,000
(To correct cost of equipment capitalized to patent)
3. Preparation of the Journal entry to Record the correcting entry to record depreciation on equipment used in R&D projects.
Dec 31
Dr Research and Development Expense $10,000
Cr 2013 Accumulated Depreciation - Equipment $10,000
(To record research and development expense)
Rearrange the following steps in the accounting cycle in proper sequence: a. A post-closing trial balance is prepared. 3 b. Adjustment data are asssembled and analyzed. c. Adjusting entries are journalized and posted to the ledger. d. An adjusted trial balance is prepared. e. An optional end-of-period spreadsheet is prepared. f. An unadjusted trial balance is prepared. g. Closing entries are journalized and posted to the ledger. h. Financial statements are prepared. i. Transactions are analyzed and recorded in the journal. j. Transactions are posted to the ledger.
Answer:
The Accounting Cycle of a Business refers to the entire process of accounting for the transactions in the business from the moment the company begins a new transaction to the end of the period where it is aggregated into other accounts and presented to relevant stakeholders.
There are 10 steps to this cycle and they are;
Transactions are analyzed and recorded in the journal. Transactions are posted to the ledger An unadjusted trial balance is prepared Adjustment data are assembled and analyzed An optional end-of-period spreadsheet is preparedAdjusting entries are journalized and posted to the ledger An adjusted trial balance is prepared Financial statements are prepared Closing entries are journalized and posted to the ledger A post-closing trial balance is preparedi ⇒ j ⇒ f ⇒ b ⇒ e ⇒ c ⇒ d ⇒ h ⇒ g ⇒ a
Spaceley’s Sprockets has just developed a new product. George Jetson, the Head of Product Development, feels that the product is a winner, but he also feels it would be an even better product if waited six more months for further development before launching. Unfortunately, Spaceley’s closest competitor, Cogsley Cogs, has a similar product in the development pipeline. George feels that if he launches the product now to get a head start on Cogsley, he has a 50% chance of achieving a high level of sales, a 30% chance of a medium level of sales, and a 20% chance of a low level of sales. If he waits, he has a 30% chance of a high level of sales, and a 70% chance of a medium level of sales, with no chance of a low level of sales. High sales represents 100,000 units, medium sales represents 65,000 units, and low sales represents 10,000 units. If his objective is to maximize his expected number of units sold, what should George do and how many units would he be expected to sell
Answer:
George should wait for six more months for further development before launching.
Total units expected to be sold by this time is 75500 units
Explanation:
when launched early
Spaceley has : 50% of high level sale, 30% chance of medium level sale
20% chance of low level sale
When launched late
Spaceley has : 30% of high level sale, 70% of medium level sale, o% of low level sale
while
High sales = 100000
Medium sale = 65000
low level sale = 10000
A) when launched early
50% * 100000 = 50000
30% * 65000 = 19500
20% * 10000 = 2000
Total sales = 71500 units
B) when launched after 6 months
30% * 100000 = 30000
70% * 65000 = 45500
Total sales = 75500 units
George should wait for six more months for further development before launching.
Total units expected to be sold by this time is 75500 units
You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of .6 percent per year, compounded monthly for the first six months, increasing thereafter to 17.5 percent compounded monthly. Assume you transfer the $6,500 balance from your existing credit card and make no subsequent payments. How much interest will you owe at the end of the first year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Total interest paid = $606.63
Explanation:
First calculate the monthly payment for first six months
Monthly interest for first 6 months =.006/12=.0005
= 6500*(1.0005)^6
=6519.52
Interest rate for next six months
=17.37%/12=1.45%
(1.0145)^6=1.090054
=6519.52*(1+.0145)^6
=7106.63
Total interest paid = 7106.63-6500
Total interest paid = 606.63
X Manufacturing uses a normal cost system and had the following data available for 20x8: Direct materials purchased on account $148,000 Direct materials requisitioned 98,000 Direct labor cost incurred 127,000 Factory overhead budgeted 155760 Factory overhead incurred 137,800 Cost of goods sold 260,000 Beginning direct materials inventory 34,000 Beginning WIP inventory 70,000 Beginning finished goods inventory 55,000 Ending finished goods inventory 104,000 Overhead application rate, as a percent of direct-labor costs 118% Round your answers to the nearest dollar. Fill in the blank without $ or comma or period, e.g., 12345 What is the adjusted cost of goods sold assuming the over/under applied overhead is immaterial?
Answer:
Adjusted cost of goods sold = $247,940
Explanation:
Under / Over-applied overhead = Factory overhead incurred - Factory overhead applied
Under / Over-applied overhead = Factory overhead incurred - (Direct labor cost*Overhead application rate)
= $137,800 - ($127,000*118%)
Over-applied overhead = $137,800 - $149,860
Over-applied overhead = ($12,060)
Adjusted cost of goods sold = Unadjusted cost of goods sold - Over-applied overhead
Adjusted cost of goods sold = $260,000 - $12,060
Adjusted cost of goods sold = $247,940
Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $25,000 and earn an additional $10,000 if Highgate achieves $100,000 of cost savings. Leo estimates a 50% chance that Highgate will achieve $100,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract?
Answer:
The transaction price would Leo estimated for this contract is $30,000
Explanation:
The computation of the transaction price is shown below:
= (Fixed fee + additional amount) × chance + fixed fee × chance
= $35,000 × 50% + $25,000 × 50%
= $17,500 + $12,500
= $30,000
hence, the transaction price would Leo estimated for this contract is $30,000
We simply applied the above formula so that the correct answer could come
An American currency dealer has good credit and can borrow either $1,000,000 or €800,000 for one year. The one-year interest rate is i$ = 2% in the U.S. and i€ = 6% in the euro zone, respectively. The spot exchange rate is $1.25 = €1.00 and the one-year forward exchange rate is $1.20 = €1.00. Show how you can realize a certain dollar profit via covered interest arbitrage.
a. Borrow $1,000,000 at 2%; trade $1,000,000 for €800,000 at the spot rate; invest euros at i€= 6%;translate euro proceeds back to dollars at the forward rate of $1.20 = €1.00. Gross proceeds will be $1,017,600.
b. Borrow $1,000,000 at 2%; trade $1,000,000 for €800,000 at the spot rate; invest euros at i€= 6%;translate euro proceeds back to dollars at the forward rate of $1.20 = €1.00. Net profit will be $17,600.
c. Borrow €800,000 at i€= 6%;translate euros to dollars at the spot rate, invest dollars in the U.S. at i$ = 2% for one year; translate dollars back to €850,000 at the forward rate of $1.20 = €1.00. Net profit will be €2,000.
d. Borrow €800,000 at i€= 6%;translate euros to dollars at the spot rate, invest dollars in the U.S. at i$ = 2% for one year; translate dollars back to €848,000 at the forward rate of $1.20 = €1.00. Net profit will be $2,400.
Answer:
c. Borrow €800,000 at i€= 6%;translate euros to dollars at the spot rate, invest dollars in the U.S. at i$ = 2% for one year; translate dollars back to €850,000 at the forward rate of $1.20 = €1.00. Net profit will be €2,000.
Explanation:
borrow 800,000€ today and purchase $1,000,000
invest the $1,000,000 and get $1,020,000 in one year
purchase back $1,020,000 / $1.20 = 850,000€
pay your loan resulting in a = 850,000€ - (800,000€ x 1.06) = 850,000€ - 848,000€ = 2,000€ gain
if you borrow $1,000,000 and purchase 800,000€
invest 800,000€ and get 848,000€ in one year
purchase back 848,000€ x 1.2 = $1,017,600
pay your loan back = $1,017,600 - ($1,000,000 x 1.02%) = $1,017,600 - $1,020,000 = -$2,400 loss
As organizations expand into global markets, business communicators need to become aware of their own culture and how it differs from other cultures. Cultural awareness allows professionals to communicate successfully with other cultures and to navigate the intercultural challenges of a globalized business world. The first step in overcoming intercultural obstacles is understanding the trends that drive globalization.
Identify the trend illustrated by the following example.
A U.S. retailer of high-tech products looks to open stores in Russia where there has been a surge in demand for smartphones and tablet computers.
A) Favorable trade agreements
B) Robust middle-class growth
C) Transportation advancements
Answer:
Option C (Robust middle-class growth) seems to be the correct option.
Explanation:
We will construct a convincing hypothesis of middle-class development by culling through canonical academics as well as contemporary scholars. Stable demand, confidence, political stability, and a collection of respectable, forward-looking liberal as well as proto-capitalist practices are the main structures of middle-class-led growth.Some other possibilities given weren’t connected to the instance given. So, the solution here is the best one.
Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2020). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below. Department Quarter 1 Quarter 2 Quarter 3 Quarter 4 Auditing 2,450 1,840 2,330 2,710 Tax 3,130 2,650 2,300 2,800 Consulting 1,640 1,640 1,640 1,640 Average hourly billing rates are auditing $84, tax $94, and consulting $105. Prepare the service revenue (sales) budget for 2020 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Answer and Explanation:
The Preparation of service revenue is prepared below:-
For Quarter 1
Billable Hours Billable rate Total
Auditing 2,450 84 205,800
Tax 3,130 94 294,220
Consulting 1,640 105 172,200
Total 672,220
For Quarter 2
Billable Hours Billable rate Total
Auditing 1,840 84 154,560
Tax 2,650 94 249,100
Consulting 1,640 105 172,200
Total 575,860
For Quarter 3
Billable Hours Billable rate Total
Auditing 2,330 84 195,720
Tax 2,300 94 216,200
Consulting 1,640 105 172,200
Total 584,120
For Quarter 4
Billable Hours Billable rate Total
Auditing 2,710 84 227,640
Tax 2,800 94 263,200
Consulting 1,640 105 172,200
Total 663,040
Now the total revenue is
= $575,860 + $584,120 + $663,040
= $1,823,020
For Quarter 1: The Preparation of service revenue is 672,220
For Quarter 2: 575,860
For Quarter 3: 584,120
For Quarter 4: The total revenue is = $1,823,020
Calculation of Total revenueWhen The Preparation of service revenue is prepared below:-
For Quarter:1 is
Billable Hours Billable rate Total
Auditing 2,450 84 205,800
Tax 3,130 94 294,220
Consulting 1,640 105 172,200
Total 672,220
For Quarter:2 is
Billable Hours Billable rate Total
Auditing 1,840 84 154,560
Tax 2,650 94 249,100
Consulting 1,640 105 172,200
Total 575,860
For Quarter:3 is
Billable Hours Billable rate Total
Auditing 2,330 84 195,720
Tax 2,300 94 216,200
Consulting 1,640 105 172,200
Total 584,120
For Quarter:4 is
Billable Hours Billable rate Total
Auditing 2,710 84 227,640
Tax 2,800 94 263,200
Consulting 1,640 105 172,200
Total 663,040
Now the total revenue is
= $575,860 + $584,120 + $663,040
Therefore, = $1,823,020
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A market has four individuals, each considering buying a grill. Assume that grills come in only one size and model. Martina considers herself a grill-master, and finds a grill a necessity, so she is willing to pay $400 for a grill. Javier is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Kamal wants to impress his friends with his vegetable grilling skills and is willing to pay $320 for a grill. Lina loves grilled shrimp and thinks it might be cheaper in the long run if she grills her own shrimp instead of eating out at a restaurant, so she is willing to pay $200 for a grill. If the market price of grills is $300, who will participate in the market?
Answer:
Martina
Javier :
Kama
Explanation:
The people that would participate in the market are those whose willingness to pay is higher than the market price for the grill.
The willingness to pay is the highest amount a person would be willing to pay for a good
Martina : $400 > $300 would participate
Javier : $350 > $300 would participate
Kama : $320 > $300 would participate
Lina : $200 < $300 would not participate