Business High School

## Answers

**Answer 1**

To satisfy a 95% service level and avoid **stockouts **during the lead-time, the order **quantity **should be around 661 units, and the reorder point should be approximately 383 units.

Order Quantity (EOQ) and Safety Stock Level for 95% Service Level

The optimal order quantity (EOQ) can be calculated using the **Economic Order Quantity **formula. However, in this case, we need to consider the safety stock level to achieve a 95% service level during the lead-time. To determine the order quantity, we need to consider the annual demand, holding cost, and ordering cost.

The EOQ formula is given by:

EOQ = sqrt((2 * annual demand * ordering cost) / holding cost)

Given the mean daily demand (D) of 60 and standard deviation (σ) of 7, we can calculate the annual demand as follows:

**Annual demand** = D * 365 = 60 * 365 = 21,900 units

Substituting the values into the EOQ formula, we have:

EOQ = sqrt((2 * 21,900 * 10) / 0.50) = sqrt(438,000) ≈ 661.4

Therefore, the optimal order quantity (EOQ) is approximately 661 units.

To determine the reorder point to achieve a 95% service level during the lead-time, we need to consider the lead-time demand and the safety stock. The lead-time demand is calculated by multiplying the mean daily demand (D) by the lead-time (LT).

Lead-time demand = D * LT = 60 * 6 = 360 units

The safety stock is the buffer stock maintained to cover any unexpected variations in demand or lead-time. It is determined based on the desired service level and standard deviation.

Using the Z-table, we can find the corresponding Z-value for a 95% service level, which is approximately 1.645.

Safety stock = Z * σ * sqrt(LT) = 1.645 * 7 * sqrt(6) ≈ 23.23 units

Therefore, the reorder point is the sum of the lead-time demand and safety stock:

Reorder point = Lead-time demand +** Safety stock **= 360 + 23.23 ≈ 383.23 units.

To satisfy a 95% service level and avoid stockouts during the lead-time, the order quantity should be around 661 units, and the reorder point should be approximately 383 units.

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## Related Questions

Please list all operating assets accounts that can appear a balance sheet, and all non operating assets.

Please list all operating liabilities accounts that can appear a balance sheet, and all non operating liabilities.

### Answers

It's important to note that the specific accounts that appear on a balance sheet can vary depending on the nature of the** business** and its operations.Operating assets **accounts** that can appear on a balance sheet include:

1. Cash: This includes the amount of money a company has on hand or in bank accounts.

2. Accounts Receivable: This represents the money owed to the company by its customers for goods or services provided on credit.

3. Inventory: This includes the goods or products a company has on hand for sale or in the process of being manufactured.

4. Prepaid Expenses: These are expenses that have been paid in advance, such as insurance premiums or rent.

5. Property, Plant, and Equipment: These are long-term assets used in the operation of the business, such as land, buildings, machinery, and vehicles.

6. Intangible Assets: These are non-physical assets that provide value to the company, such as patents, trademarks, or copyrights.

7. Investments: These include investments made by the company in other companies or financial instruments.

Non-operating assets that may appear on a balance sheet are assets that are not directly related to the company's core operations. Examples include:

1. Investments in Securities: These are investments made in stocks, bonds, or other securities that are not part of the company's core business operations.

2. Real Estate held for investment purposes: This refers to properties that the company owns but does not use in its day-to-day operations, such as rental properties or vacant land.

3. Goodwill: This represents the excess amount paid for an acquired business over its fair value, which is not directly related to the company's operations.

4. Assets held for sale: These are assets that the company plans to sell in the near future, such as surplus equipment or discontinued product lines.

Operating liabilities accounts that can appear on a balance sheet include:

1. Accounts Payable: This represents the amount of money owed by the company to its suppliers or vendors for goods or services received.

2. Accrued Expenses: These are expenses that the company has incurred but has not yet paid, such as salaries or interest payable.

3. Short-term Borrowings: These are** loans **or credit facilities that the company has taken on to meet its short-term financing needs.

4. Notes Payable: These are formal written agreements to repay a specific amount of money by a certain date.

5. Current Portion of Long-term Debt: This refers to the portion of long-term debt that is due to be paid within the next year.

Non-operating liabilities that may appear on a balance sheet are liabilities that are not directly related to the company's core operations. Examples include:

1. Long-term Debt: This refers to debt that is not due to be repaid within the next year.

2. Deferred **Income** Taxes: This represents taxes that the company will owe in the future due to temporary differences in accounting income and taxable income.

3. Contingent Liabilities: These are potential liabilities that may arise in the future depending on the outcome of certain events, such as pending lawsuits or warranties.

4. Lease Obligations: These are obligations to make lease payments for assets used in the company's operations.

5. Pension and Other Post-**Employment** Benefit Obligations: These represent the company's obligations to provide retirement or other post-employment benefits to its employees.

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Background (Real estate market, Covid-19). - The real estate market scenario before Covid-19. - The market condition during the Covid-19 scenario. - The real estate market situation during Post Covid-19. - Any issues exist. - The techniques or solution to overcome the issues. - Conclusions and Recommendations. Need points for each title. (Finance)

### Answers

The real **estate market** experienced a slowdown during the Covid-19 pandemic but has shown signs of recovery post-pandemic.

What were the effects of Covid-19 on the real estate market?

The effects of Covid-19 on the real estate market were significant. Lockdowns and restrictions on movement led to a slowdown in property transactions.

Buyers and investors became cautious, resulting in reduced demand and increased uncertainty. Property prices became more volatile, with fluctuations impacting both buyers and sellers. The commercial real estate sector was particularly affected as remote work became prevalent and businesses downsized, leading to a decrease in office space demand.

However, as the situation improved with the easing of restrictions and vaccination efforts, the market started showing signs of recovery, with increased buyer **confidence** and a surge in demand for residential properties. Overall, the pandemic had a transformative impact on the real estate market, shaping consumer preferences and driving the adoption of digital technologies. Learn more about the specific effects of Covid-19 on the real estate industry.

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Market demand is given as QD=250−0.5P. Market supply is given as QS=2P+200. Each identical firm has MC=0.5Q and ATC=0.25Q+(6/Q) (ATC is at minimum when Q=4.9). What quantity of output will each firm produce? a. 10 b. 50 c. 20 d. 40

### Answers

Each firm will produce 40 units of **output** (**option d**) in the given market.

To determine the quantity of output each firm will produce, we need to find the equilibrium price in the market and then substitute it into the firm's **marginal cost **(MC) function to calculate the corresponding quantity.

First, let's find the equilibrium price by setting the quantity demanded **equal** to the quantity supplied:

QD = QS

250 - 0.5P = 2P + 200

Combine like terms:

250 - 200 = 2P + 0.5P

50 = 2.5P

Divide both sides by 2.5:

P = 20

Now that we have the equilibrium price, we can substitute it into the firm's marginal cost function to find the **quantity**:

MC = 0.5Q

0.5Q = P

0.5Q = 20

Divide both sides by 0.5

Q = 40

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You have an outstanding student loan with required payments of $600 per month for the next four years. The interest rate on the loan is 8% APR. You are considering making an extra payment of $150 today (that is, you will pay an extra $150 that you are not required to pay).

a. If you are required to continue to make payments of $600 per month until the loan is paid off, what is the amount of your final payment?

b. What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $150?

### Answers

a. To find the amount of the **final **payment, we need to calculate the remaining **balance **on the loan after making payments of $600 per month for four years.

The loan has an interest rate of 8% APR, which means the **interest** is compounded monthly. To calculate the monthly interest rate, we divide the APR by 12. So the monthly interest rate is 8% / 12 = 0.67%.

We can use the formula for the future value of an ordinary **annuity **to calculate the remaining balance. The formula is:

FV = PMT * [(1 + r)^n - 1] / r

Where:

FV is the future value or remaining balance on the loan,

PMT is the monthly payment amount,

r is the monthly interest rate, and

n is the number of payments.

In this case, the monthly payment amount is $600, the **monthly** interest rate is 0.67%, and the number of payments is 4 years * 12 months/year = 48 months.

Plugging these values into the formula, we have:

FV = 600 * [(1 + 0.0067)^48 - 1] / 0.0067

Using a calculator, we find that the remaining balance on the loan is approximately $23,520.

Since the final payment should cover the remaining balance, the amount of the final payment is $23,520.

b. To calculate the effective rate of return on the $150 extra payment, we can compare the increase in the remaining balance due to interest with the amount of the extra payment.

First, let's calculate the future value of the extra payment. Since the extra payment is made today, we need to compound it for 48 months to match the remaining loan term.

Using the formula for the future value of a lump sum, the future value of the extra payment is:

FV_extra = PV * (1 + r)^n

Where:

FV_extra is the future value of the extra payment,

PV is the present value or amount of the extra payment,

r is the monthly interest rate, and

n is the number of months.

Plugging in the values, we have:

FV_extra = 150 * (1 + 0.0067)^48

Calculating this, we find that the future value of the extra payment is approximately $200.27.

Now, let's compare the increase in the remaining balance due to interest with the amount of the extra payment.

The increase in the remaining balance due to interest is the difference between the future value of the loan without the extra payment and the future value of the loan with the extra payment.

Using the formula for the future value of an ordinary annuity, we can calculate the future value of the loan without the extra payment:

FV_without_extra = 600 * [(1 + 0.0067)^48 - 1] / 0.0067

Using a calculator, we find that the future value of the loan without the extra payment is approximately $23,520.

So, the increase in the remaining balance due to interest is $23,520 - $200.27 = $23,319.73.

Finally, we can calculate the effective rate of return on the $150 extra payment. It is the increase in the remaining balance due to interest divided by the amount of the extra payment, expressed as an APR with monthly compounding.

Effective rate of return = (increase in remaining balance / amount of extra payment)^(1/n) - 1

Where:

increase in remaining balance is $23,319.73,

amount of extra payment is $150,

n is the number of months.

Plugging in the values, we have:

Effective rate of return = ($23,319.73 / $150)^(1/48) - 1

Using a calculator, we find that the effective rate of return on the $150 extra payment is approximately 8.05% APR with monthly compounding.

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Wal Mart as the biggest retailer company in the world has a big buyer power among the suppliers. True False

### Answers

Wal-Mart, as the largest retailer **company** in the world, indeed has significant buyer power among its **suppliers**. This statement is true.

One reason for Wal-Mart's strong buyer power is its sheer size and market **dominance**. With over 11,000 stores worldwide and a customer base of millions, Wal-Mart has immense bargaining power over its suppliers. Suppliers are often willing to offer more favorable terms to Wal-Mart in order to secure or maintain their position as a supplier for such a major retailer.

Another factor that contributes to Wal-Mart's buyer power is its efficient supply chain **management**. Wal-Mart has developed sophisticated logistics systems that enable them to streamline operations, minimize costs, and negotiate better deals with suppliers. By leveraging economies of scale and demanding lower prices, Wal-Mart exerts significant influence over its suppliers.

Moreover, Wal-Mart has the ability to drive down prices through its pricing strategy. The company's commitment to offering low prices to its **customers** puts pressure on suppliers to provide products at competitive prices. Suppliers that cannot meet Wal-Mart's demands may risk losing their contracts or face decreased sales.

In conclusion, Wal-Mart's position as the largest retailer grants it substantial buyer power among its suppliers. This power is derived from its market dominance, efficient supply chain management, and pricing strategy.

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False. While **Walmart **is indeed one of the largest retailers in the world, it does have a significant amount of buyer power among its suppliers.

Due to its immense size and** market dominance**, Walmart has the ability to negotiate lower prices and better terms with its suppliers. This gives Walmart an advantage in terms of pricing and inventory management, allowing them to offer competitive prices to consumers. However, it's important to note that not all suppliers may be affected equally by Walmart's buyer power. Some larger suppliers may have more **bargaining power, **while smaller suppliers may be more dependent on Walmart's business.

So while Walmart does have significant buyer power, it is not accurate to say that it has **"biggest" buyer **power among all suppliers. False.

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Case 7-A: Simply Orange Decisions The Coca-Cola Company (co*ke) is in a league by itself. As the world’s largest and number one nonalcoholic beverage company, co*ke makes or licenses more than 3,500 drinks in more than 200 countries. co*ke has built 15 billion-dollar brands, and also claims four of the top five soft-drink brands (co*ke, Diet co*ke, Fanta, and Sprite). Each year since 2001, global brand consulting firm Interbrand, in conjunction with Bloomberg BusinessWeek, has identified co*ke as the number one best global brand. co*ke’s executives and managers are focusing on ambitious, long-term growth for the company—doubling co*ke’s business by 2020. A big part of achieving this goal is building up its Simply Orange juice business into a powerful global juice brand. Decision-making is playing a crucial role as managers try to beat rival PepsiCo., which has a 40 percent market share in the not-from-concentrate juice category compared to co*ke’s 28 percent share. And those managers aren’t leaving anything to chance in this hot—umm, cold—pursuit! You’d think that making orange juice (OJ) would be relatively simple—pick, squeeze, pour. While that would probably be the case in your own kitchen, in co*ke’s case, that glass of 100 percent OJ is possible only through the use of satellite images, complex mathematical algorithms, and a pipeline solely for the purpose of transporting juice. The purchasing director for co*ke’s massive Florida juice packaging facility says that when you’re dealing with "Mother Nature," standardization is a huge problem. Yet, standardization is what it takes for co*ke to make this work profitably. And producing a juice beverage is far more complicated than bottling soda. Using what it calls its "Black Book model," co*ke wants to ensure that customers have consistently fresh, tasty OJ for 12 months a year despite a peak growing season that’s only three months long. To help in this, co*ke relies on a consultant experienced with revenue analytics, who has described OJ as "one of the most complex applications of business analytics." How complex? To consistently deliver an optimal blend given the challenges of nature requires some 1 quintillion (that’s 1 followed by 18 zeroes) decisions! There’s no secret formula to Black Book: it’s simply an algorithm that includes detailed data about the more than 600 different flavors that make up an orange and about customer preferences. This data is correlated to a profile of each batch of raw juice. The algorithm then determines how to blend batches to match a certain taste and consistency. At the juice bottling plant, "blend technicians" carefully follow the Black Book instructions before beginning the bottling process. The weekly OJ recipe they use is constantly "tweaked". Black Book also includes data on external factors such as weather patterns, crop yields, and other cost pressures. This is useful for co*ke’s decision makers as they ensure they’ll have enough supplies for at least 15 months. One co*ke executive says the company’s mathematical modeling means that if a weather catastrophe (hurricane or hard freeze) hits, the business can quickly regroup and make new plans in a very short time frame—as little as 5 or 10 minutes RESPONDING TO THE CASE 7-13. Which decisions in this story could be considered ill-structured problems? Well-structured problems? 7-14. How does the Black Book help co*ke’s managers and other employees in decision making? 7-15. What does co*ke’s big data have to do with its goals?

### Answers

co*ke's use of the Black Book **algorithm **helps solve ill-structured problems, make data-driven decisions, and achieve its **goals**.

7-13. The decisions related to blending batches of orange juice, managing supplies based on weather patterns and crop yields, and ensuring consistent taste and quality can be considered as ill-structured problems. These decisions involve dealing with uncertainties and complexities arising from the **variability **in raw materials, external factors, and customer preferences.

7-14. The Black Book helps co*ke's **managers **and employees in decision making by providing a data-driven algorithm that considers various factors such as flavors, customer preferences, weather patterns, and crop yields. It correlates this data with the profile of each batch of raw juice to determine the optimal blend for taste and consistency. Following the instructions in the Black Book allows for consistent production of high-quality orange juice.

7-15. co*ke's big data is **essential **for achieving its goals as it provides valuable insights and information for decision making. By analyzing extensive data on flavors, customer preferences, weather patterns, and crop yields, co*ke can make informed decisions to optimize its production process and manage supplies effectively. This data-driven approach enables co*ke to deliver consistent quality throughout the year and respond quickly to unexpected events. By leveraging big data, co*ke aims to double its business and compete in the juice market with a strategic advantage.

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Design a series of dashboard reports for a restaurant's business operations. (ex. sales)

a. The reports should include a filter as to how to select the data

b. The filter should include a location, time frame, product categories, and metric( dollars, units, etc)

c. The user should have the capabilities to drill down from product category to the detail level

### Answers

The **goal **of these dashboard reports is to provide a clear and concise snapshot of the **restaurant's business** operations.

To design a series of dashboard reports for a restaurant's business operations, follow these steps:

1. Determine the key metrics: Identify the important **metrics **for the restaurant, such as sales, profit, customer satisfaction, and inventory levels.

2. Create a filter: Develop a filter that allows users to select data based on various criteria. Include options for location, time frame, product categories, and the metric being measured (e.g., dollars, units).

3. Design the main dashboard: Create an overview dashboard that displays key metrics for the selected data. For example, you could include a sales chart, a profit margin graph, and a customer **satisfaction rating**.

4. Drill-down functionality: Enable users to drill down from the product category level to the detail level. For instance, if the user selects a specific product category, they should be able to view detailed information about individual products within that category.

5. Visualize data: Use charts, graphs, and tables to present data in a visually appealing and easy-to-understand manner. Consider using bar charts for sales by location, line graphs for trends over time, and pie charts for product category distribution.

6. Interactive features: Add interactive elements to the dashboard, such as hover-over tooltips, clickable filters, and dynamic data updates. These features enhance user experience and make it easier to explore and analyze the data.

Remember, the goal of these dashboard reports is to provide a clear and concise snapshot of the restaurant's business operations. Make sure the information is presented in a visually pleasing and intuitive way, allowing users to make data-driven decisions.

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If you currently have no saving allocated for this financial goal of saving for the deposit of the house, how much do you have to save monthly into your bank account that pays 3.75% annual interest rate, compounded monthly? [Clearly show all formula(s), steps, relevant figures and final answer. Round only the final answer to two decimal places, where applicable.]

### Answers

You would need to save approximately $1,305.40 per month into your bank **account **to reach the desired deposit amount of $200,000, assuming a 3.75% annual interest rate, compounded monthly.

To calculate the monthly savings required to achieve a **financial** goal, we can use the formula for the future value of an ordinary annuity:

Future Value of Annuity = Payment * [(1 + r)^n - 1] / r

Where:

Payment is the monthly **savings **amount

r is the monthly interest rate

n is the number of periods (in this case, the number of months)

Given:

Annual interest rate = 3.75%

Monthly interest rate = 3.75% / 12 = 0.3125% (0.0375 / 12)

Number of **periods **(months) = 10 years * 12 months/year = 120 months

Now, let's calculate the monthly savings amount required:

Future Value of Annuity = Payment * [(1 + r)^n - 1] / r

Rearranging the formula, we can solve for Payment:

**Payment **= Future Value of Annuity * r / [(1 + r)^n - 1]

Since we currently have no savings allocated, the Future Value of Annuity is the desired deposit amount.

**Deposit **amount = 20% of house price = 20% * $1,000,000 = $200,000

Payment = $200,000 * 0.003125 / [(1 + 0.003125)^120 - 1]

Payment = $200,000 * 0.003125 / [1.003125^120 - 1]

Payment ≈ $200,000 * 0.003125 / (1.477926 - 1)

Payment ≈ $200,000 * 0.003125 / 0.477926

Payment ≈ $200,000 * 0.006527

Payment ≈ $1,305.40

Therefore, you would need to save approximately $1,305.40 per month into your bank account to reach the desired deposit amount of $200,000, assuming a 3.75% annual interest rate, **compounded **monthly.

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cullumber construction company earned 400,000 during the year ended june 20, 2017. after paying out 225,794

### Answers

The **net income** earned by Cullumber Construction Company for the year ended June 20, 2017, after paying out $225,794, is $174,206.

To find the net income, we need to subtract the total expenses from the total revenue.

Given that Total revenue earned during the year: $400,000

Total expenses (**payout**): $225,794

To find the net income, we subtract the total expenses from the total revenue: Net income = Total **revenue **- Total expenses

Net income = $400,000 - $225,794

Net income = $174,206

The amount of money a firm makes through conducting **business **as usual with its clients is referred to as revenue. In contrast, net income is the amount that remains in the company after all **expenses **for the time have been subtracted from the net revenue.

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When reporting information about the sale or exchange of a noncovered security, a broker or custodian is required to provide a taxpayer and the IRS with information about which of the following?

The date the property was acquired.

The date the property was sold or disposed of.

The taxpayer's cost or other basis.

Whether the gain or loss is short-term or long-term.

### Answers

When reporting information about the sale or exchange of a noncovered security, a broker or custodian is required to provide a **taxpayer** and the IRS with information about the following:

The date the property was sold or disposed of and the taxpayer's **cost** or other basis. Additionally, the broker or custodian must also report whether the **gain** or **loss** is short-term or long-term. This information is crucial for accurate tax reporting and calculation of capital gains or losses. By providing these details, both the taxpayer and the IRS can properly determine the tax implications of the **transaction**. The date of acquisition is not required to be reported for noncovered securities.

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purchased an additionot 690 units of ipventory that cost \( \$ 9 \) sach. If Antit sells 750 units of inventary what as the aineunt of cont of fioolts sald? Multiple Choice \[ 56750 \] 56580 \[ 55250

### Answers

The correct answer is $6750. To find the **cost of goods sold**, we need to calculate the cost of the 750 units of inventory sold.

First, we need to find the total cost of the 690 units of **inventory purchased**. Each unit costs $9, so the **total cost** of the 690 units is 690 x $9 = $6210.

Next, we can calculate the cost per unit of the inventory purchased by dividing the total cost by the number of units: $6210 / 690 = $9 per unit.

To find the cost of goods sold, we multiply the **cost per unit** by the number of units sold. In this case, we sold 750 units, so the cost of goods sold is $9 x 750 = $6750.

Therefore, the amount of cost of goods sold is $6750.

In conclusion, the correct answer is $6750.

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You are the CEO of a digital bank start-up company. Given that your digital bank will disrupt the current landscape, how far can you set the four elements of your company’s credit policy, and to what extent should you fall in line with the incumbents’ or your competitors’ credit policy?

### Answers

As the CEO of a digital bank start-up, I would set the four elements of my company's credit policy to align with the unique **value proposition** and risk appetite of our digital bank. However, it is important to carefully consider the industry standards and best practices established by incumbents and competitors to ensure regulatory compliance and maintain credibility in the market.

How should the digital bank's credit policy be tailored to its unique value proposition and risk appetite?

The credit policy of a digital bank start-up should be customized to reflect its **unique** value proposition and risk appetite. This involves determining the target customer segment, evaluating their creditworthiness, setting appropriate interest rates and credit limits, and establishing guidelines for loan approval and **risk management.**

To disrupt the current landscape effectively, the digital bank should leverage its technological capabilities to streamline credit assessment processes and offer personalized credit solutions. This may include utilizing advanced analytics and alternative data sources for credit scoring, enabling faster loan approvals, and providing innovative credit products such as **microloans **or customized financing options.

While setting the credit policy, it is crucial to adhere to regulatory requirements and industry standards to ensure compliance and gain trust from customers and stakeholders. By understanding the incumbents' and competitors' credit policies, the digital bank can learn from their experiences and adapt certain **practices **that align with its disruptive vision.

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Bandway Company manufactures brass musical instruments for use by high school students. The company uses a normal costing system, in which manufacturing overhead is applied on the basis of direct-labor hours. The company's budget for the current year included the following predictions.

Budgeted total manufacturing overhead$462,000

Budgeted total direct-labor hour21,000

During October, the firm worked on the following two production jobs:

Job number T79, consisting of 76 trombones

Job number C41, consisting of 110 cornets

The events of October are described as follows:

A. one thousand square feet of rooled brass sheet metal was purchased on account for $6,000.

B. Four hundred pounds of brass tubing was purchased on account for $5,200.

C. The following requisitions were submitted on October 5:

Req. number 112: 260 square ft. of brass sheet metal at $5.50 per square ft (job T79)

Req. number 113: 1,100 pounds of brass tubing, at $9.00 per pound (job C41)

Req. number 114: 10 gallons of valve lubricant at $12 per gallon

All brass used in production is treated as DM. Valve lubricant is an indirect material

D. An analysis of labor time cards revealed the following labor usage for October.

Direct labor: Job T79, 850 hours at $20 per hour

Direct labor: Job C41, 950 hours at $20 per hour

Indirect labor: General factory cleanup, $4,500

Indirect labor: Factory supervisory salaries, $9,600

E. Depreciation of the factory, building and equipment during October amounted to $13,000.

F. Rent paid in cash for warehouse space used during October was $1,340.

G. Utility costs incurred during October amounted to $2,400. The invoices for these costs were received, but the bills were not paid in October.

H. October property taxes on teh factory were paid in cash, $2,370.

I. The insurance cost covering factory operations for the month of October was $2,900. The insurance policy has been prepaid.

J. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during October amounted to $7,500.

K. Depreciation on administrative office equipment and space amounted to $4,500.

L. Other selling and administrative expenses paid in cash during October amounted to $1,150.

M. Job number T79 was completed on October 20.

N. Half of the trombones in Job T79 were sold on account during October for $720 each.

The October 1 balances in selected accounts are as follows:

Cash$11,000

Accounts receivable20,000

Prepaid insurance6,000

Raw-material inventory150,000

Manufacturing supplies inventory600

WIP inventory89,000

Finished goods inventory223,000

Accumulated depreciation: B & E99,000

Accounts payable14,500

Wages payable8,500

Required:

1. Calculate the company's predetermined overhead rate for the year.

2. Calculate over/under applied for October.

3. Prepare COG Manufactured for October.

4. Prepare COG Sold for October.

5. Prepare income statement of October

### Answers

To calculate the company's predetermined** overhead rate** for the year, we divide the budgeted total manufacturing overhead by the budgeted total direct labor hours:

Predetermined overhead rate = Budgeted total manufacturing overhead / Budgeted total direct labor hours

Predetermined overhead rate = $462,000 / 21,000 hours

Predetermined overhead rate = $22 per direct labor hour

To calculate over/under applied overhead for October, we need to compare the applied overhead with the actual **overhead incurred.**

Applied overhead = Predetermined overhead rate x Actual direct labor hours

Applied overhead = $22 x (850 + 950) hours

Applied overhead = $39,600

**Actual overhead incurred **= Depreciation of factory building and equipment + Rent + Utility costs + Property taxes + Insurance cost + Other selling and administrative expenses

Actual overhead incurred = $13,000 + $1,340 + $2,400 + $2,370 + $2,900 + $1,150

Actual overhead incurred = $23,160

Over/under applied overhead = Applied overhead - Actual overhead incurred

Over/under applied overhead = $39,600 - $23,160

Over/under applied overhead = $16,440 overapplied

**Cost of Goods Manufactured** (COGM) for October can be calculated using the following formula:

COGM = Beginning WIP inventory + Total manufacturing costs - Ending WIP inventory

**Beginning WIP inventory **= $89,000

Total manufacturing costs = Direct materials used + Direct labor + Applied overhead

Direct materials used = Cost of brass sheet metal + Cost of brass tubing

Cost of brass sheet metal = 260 sq. ft. x $5.50 per sq. ft. = $1,

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You are considering investing $850 in Higgs B Technology Inc You can buy common stock at $24.29 per share, this stock pays no divutends You can also buy a convertible bond (\$1,000 par value) that is currently trading at $850 and has a conversion rato of 30 it pays $50 per year in itierest If you expect the price of the stock to rise to $32.32 per share in one year, which instrument should you puichase?

### Answers

Based on the potential returns, it would be more advantageous for you to purchase the common stock rather than the **convertible bond**. The first step is to compare the potential returns of both the common stock and the convertible bond.

If you invest $850 in Higgs B Technology Inc by purchasing common stock, you can buy $850 / $24.29 = 35.01 shares (rounded to 2 decimal places).

If the stock price rises to $32.32 per share in one year as you expect, the value of your **investment** will be 35.01 shares * $32.32 = $1,131.05.

On the other hand, if you invest $850 in the convertible bond, you will receive a $50 interest payment each year. In one year, you will receive $50.

Now, let's consider the conversion option of the convertible bond. The conversion ratio is 30, which means that for every bond you own, you can convert it into 30 shares of common **stock**. Since you invested $850, you can buy $850 / $1,000 = 0.85 bonds (rounded to 2 decimal places).

Therefore, you can convert 0.85 bonds * 30 shares/bond = 25.5 shares (rounded to the nearest whole number).

If the stock price rises to $32.32 per share in one year, the value of the converted shares will be 25.5 shares * $32.32 = $825.36.

Considering the **potential returns**, if you invest in the common stock, the value of your investment will be $1,131.05, while if you invest in the convertible bond and convert it, the value of your investment will be $825.36.

Based on the potential returns, it would be more advantageous for you to purchase the common stock rather than the convertible bond.

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pell company acquires 80% of demers company for $500,000 on january 1, 2019. demers reported common stock of $300,000 and retained earnings of $210,000 on that date. equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. based on an annual review, goodwill has not been impaired. demers earns income and pays dividends as follows: 2019 2020 2021 net income $ 100,000 $ 120,000 $ 130,000 dividends 40,000 50,000 60,000 assume the equity method is applied. compute pell's equity income from demers for the year ended december 31, 2020.

### Answers

Pell's equity income from Demers for the year ended December 31, 2020. To compute Pell's equity income from Demers for 2020, we need to follow the equity method. Under the equity method, Pell recognizes its share of Demers' net income as **equity** income.

1. Calculate Pell's share of Demers' net income in 2020:

Pell owns 80% of Demers, so it is entitled to 80% of Demers' net income.

Demers reported a net income of $120,000 in 2020.

Pell's share of Demers' net income in 2020 is calculated as: 80% * $120,000 = $96,000.

2. Determine if there are any adjustments needed for undervalued assets:

Equipment and buildings were undervalued by $30,000 and $40,000, respectively, with a remaining life of 10 years.

Divide the undervaluation by the remaining life to get the annual adjustment.

The annual adjustment for equipment is $30,000 / 10 = $3,000.

The annual adjustment for buildings is $40,000 / 10 = $4,000.

3. Calculate Pell's share of the adjustments for undervalued assets in 2020:

Pell's share of the adjustment for equipment is 80% * $3,000 = $2,400.

Pell's share of the adjustment for buildings is 80% * $4,000 = $3,200.

4. Compute Pell's equity income from Demers for 2020:

Pell's share of Demers' net income: $96,000

Pell's share of the adjustments for undervalued assets: $2,400 + $3,200 = $5,600

Pell's equity income from Demers for 2020 is calculated as: $96,000 - $5,600 = $90,400.

As a result, Pell will receive $90,400 in equity income from Demers for the calendar year ending December 31, 2020.

The equity method is used when one company, in this case, Pell Company, acquires a significant ownership interest in another company, Demers Company. Under this method, Pell recognizes its share of Demers' net **income** as equity income. To calculate Pell's equity income from Demers for the year ended December 31, 2020, we first need to determine Pell's share of Demers' net income. Pell owns 80% of Demers, so it is entitled to 80% of Demers' net income. In 2020, Demers reported a net income of $120,000, so Pell's share of Demers' net income in 2020 is calculated as 80% multiplied by $120,000, which equals $96,000. Next, we need to consider any adjustments needed for undervalued assets. In this case, the equipment and buildings were undervalued by $30,000 and $40,000, respectively, with a remaining life of 10 years. To determine the annual adjustment for each asset, we divide the undervaluation by the remaining life. For the **equipment**, the annual adjustment is $30,000 divided by 10, which equals $3,000. Similarly, for the buildings, the annual adjustment is $40,000 divided by 10, which equals $4,000. Pell's share of the adjustments for undervalued assets is then calculated by multiplying the annual adjustment by Pell's ownership percentage. For the equipment, Pell's share of the adjustment is 80% multiplied by $3,000, which equals $2,400. For the buildings, Pell's share of the adjustment is 80% multiplied by $4,000, which equals $3,200.

Finally, we can calculate Pell's equity income from Demers for 2020 by subtracting Pell's share of the adjustments for undervalued **assets** from Pell's share of Demers' net income. Therefore, Pell's equity income from Demers for the year ended December 31, 2020, is $96,000 minus $5,600, which equals $90,400.

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Please give exact solution with worst case stack up analysis

using Excel.

### Answers

To provide an exact solution with worst-case stack-up analysis using **Excel**, we will perform the following steps:

1. Create a spreadsheet in Excel with a column for each variable in the stack-up analysis and their respective worst-case values.

2. Calculate the worst-case stack-up value by summing the individual variables, taking into account their worst-case scenarios.

Performing a **worst-case stack-up** analysis using Excel involves creating a spreadsheet to calculate the cumulative effect of multiple variables on a particular outcome. Each variable is assigned a column in the spreadsheet, and its worst-case value is entered. The worst-case value represents the maximum possible value that the variable could take.

Once the variables and their worst-case values are entered, the worst-case stack-up value can be calculated by summing the individual variables. This provides an estimate of the **maximum possible outcome** based on the worst-case scenarios of each variable.

By performing this analysis in Excel, we can easily update the variables and their worst-case values, allowing for **quick adjustments** and recalculations as needed.

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In healthcare organizations' attempts to enhance their

leadership, what roles do the board of directors, senior leaders,

and physicians play

### Answers

In **healthcare organizations**, the board of directors, senior leaders, and physicians play crucial roles in enhancing leadership. Let's break down their roles step-by-step:

1. Board of Directors:

The **board of directors** is responsible for providing overall governance and strategic direction to the healthcare organization. They are typically made up of individuals with diverse backgrounds and expertise. Their main role is to oversee the organization's mission, vision, and long-term goals. They also have the power to make key decisions regarding the organization's policies, finances, and operations. For example, they may approve major capital investments, appoint or remove executives, and ensure compliance with legal and ethical standards.

2. Senior Leaders:

Senior leaders, such as the CEO (Chief Executive Officer) and other top executives, are responsible for implementing the strategic direction set by the board of directors. They play a crucial role in leading the day-to-day operations of the organization and managing its resources. Their responsibilities include setting organizational goals, developing and executing strategic plans, managing budgets, and fostering a positive** organizational culture**. Senior leaders also work closely with the board of directors to provide regular updates and reports on the organization's performance.

3. Physicians:

Physicians, as medical professionals, play a vital role in healthcare organizations. They provide clinical expertise and contribute to decision-making processes that affect patient care and outcomes. **Physicians** work closely with senior leaders to ensure that medical services are delivered effectively and efficiently. They may also serve on committees or boards within the organization to provide input on clinical policies, quality improvement initiatives, and patient safety measures. Additionally, physicians often act as leaders in their respective departments or specialties, guiding and mentoring other healthcare professionals.

It's important to note that the specific roles and responsibilities of these individuals may vary depending on the size and structure of the healthcare organization. For example, in smaller organizations, the board of directors may have a more hands-on role, while larger organizations may have additional layers of senior leadership. Nonetheless, collaboration among the board of directors, senior leaders, and physicians is key to the success and effective leadership of healthcare organizations.

I hope this helps clarify the roles of the board of directors, senior leaders, and physicians in healthcare organizations' efforts to enhance leadership. Let me know if you have any further questions!

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AAA Hardware uses the LIFO method to report its inventory.Inventory at the beginning of the year consisted of 21,000 units of the company's one product.These units cost $10 each.During the year,71,000 units were purchased at a cost of $13 each and72,000 units were sold.Near the end of the fiscal year,management is considering the purchase of an additional 8.000 units at $13 Required: 1.What would be the effect of this purchase on income before income taxes? 2.What would be the effect of this purchase on income before income taxes using FIFO xAnswer is complete but not entirely correct 1 Income before income taxes would be $975,000 Lower $975.000 No effect v 2. Income before income taxes would be

### Answers

The purchase of 8,000 units at $13 each would **decrease** income before **income taxes** by $975,000 under LIFO, while the effect using FIFO would vary.

1. The effect of purchasing an additional 8,000 units at $13 each on income before income taxes under the LIFO (Last In, First Out) method would be a decrease of $975,000. This is because the LIFO method assumes that the most recently acquired **inventory** is sold first. Since the new purchase of 8,000 units would be added to the end of the inventory, they would be considered the last ones sold. As a result, their cost of $13 per unit would be matched against the revenue generated from the sale of these units, leading to a decrease in income before income taxes of $975,000 ($13 * 8,000).

2. However, if the FIFO (First In, First Out) method is used instead, the effect on income before income taxes would be different. FIFO assumes that the first units purchased are **sold** first. In this case, the additional purchase of 8,000 units would be considered as part of the beginning inventory of 21,000 units. Since their cost is $10 per unit, the cost of goods sold would be lower, resulting in a higher income before income taxes compared to LIFO. The exact impact would depend on the specific calculation of **cost** of goods sold using FIFO.

Therefore, Under the LIFO method, purchasing 8,000 units at $13 each would decrease income before income taxes by $975,000. However, using FIFO, the effect on income before income taxes would differ, depending on the calculation of cost of goods sold.

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please answer in two paragraphs. Thanks Continuing the example in Question 7, imagine that you are preparing for your first performance feedback session. You want the feedback to be effective-that is, you want the feedback to result in improved performance. List five or six steps you can take to achieve your goal. (LO 10-7)

### Answers

By following these, you can ensure that your **performance **feedback session is effective in driving improvement and supporting the growth of the individual. Remember to provide ongoing support and monitor progress to ensure continued development.

To achieve effective feedback in a performance feedback session, you can follow these five steps:

1. Set clear **goals**: Begin by establishing specific, measurable, achievable, relevant, and time-bound (SMART) goals. These goals should outline the expected performance improvements and provide a benchmark for the feedback session.

2. Create a safe environment: Foster an open and non-judgmental atmosphere where the person receiving feedback feels comfortable and supported. Emphasize that the feedback is aimed at growth and improvement rather than criticism.

3. Provide specific feedback: Focus on providing concrete examples of both strengths and areas for improvement. Use descriptive language to highlight behaviors or actions that contributed to performance outcomes.

4. Encourage **self-reflection**: Give the individual the opportunity to reflect on their own performance by asking open-ended questions. This encourages self-awareness and helps them take ownership of their growth and development.

5. Collaborate on action plans: Work together to develop actionable steps that will help the individual achieve their goals. By involving them in the process, you foster accountability and commitment to the improvement plan.

Remember, effective feedback is a continuous process, so it's important to provide ongoing support, monitor progress, and offer additional guidance as needed. By following these steps, you can create a feedback session that promotes growth and leads to improved performance.

Let's break down the steps you can take to achieve effective feedback in a performance **feedback session**:

1. Set clear goals: Define specific and measurable objectives that you want the feedback to help the individual achieve. This ensures that the feedback is focused and targeted.

2. Establish a safe and supportive environment: Create a comfortable setting where the person receiving feedback feels respected and understood. This encourages open communication and a willingness to listen and learn.

3. Provide specific feedback: Offer detailed and objective feedback on the individual's performance, highlighting both their strengths and areas for improvement. Use examples and specific instances to illustrate your points.

4. Encourage self-reflection: Give the individual the** opportunity** to reflect on their own performance and identify areas they believe they need to work on. This helps them take ownership of their development and fosters self-awareness.

5. Collaborate on action plans: Work together to create a plan of action that outlines specific steps the individual can take to improve their performance. Ensure that the plan is realistic, achievable, and aligned with their goals.

By following these, you can ensure that your performance feedback session is effective in driving improvement and supporting the growth of the individual. Remember to provide ongoing support and monitor progress to ensure continued development.

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Paul W. Barada, Monster Salary and Negotiation Expert on the employment website, Monster.com, wrote: "Negotiating effectively with a prospective employer is a little like winning at poker. Both necessitate that you play your cards close to the vest, maintain a poker face, know when to hold and know when to fold."

The statement "play your cards close to the vest" means don’t share information. Give one reason to agree and one reason to disagree.

### Answers

While playing your **cards** close to the vest can be advantageous in certain negotiation situations, being transparent and sharing information can also lead to positive outcomes by establishing trust and facilitating effective communication between parties. The approach you take should depend on the specific circ*mstances and the relationship between you and the other party involved in the **negotiation**.

The statement "play your cards close to the vest" means not to share information. Here is one reason to agree with this **statement** and one reason to disagree:

One reason to agree with the statement is that withholding certain information during a negotiation can give you an advantage. By keeping information to yourself, you have more control over the negotiation process and can strategically reveal information only when it benefits your position. For example, if you are negotiating a salary, not disclosing your previous salary may prevent the prospective employer from using it as a starting point for the negotiation.

On the other hand, one reason to disagree with the statement is that transparency and open communication can foster trust between the negotiating **parties**. Sharing relevant information can help both parties understand each other's needs and reach a mutually beneficial **agreement**. For instance, if you disclose your salary expectations and desired benefits upfront, it can save time and help the employer determine if they can meet your requirements.

In summary, while playing your cards close to the vest can be advantageous in certain negotiation situations, being transparent and sharing information can also lead to positive outcomes by establishing trust and facilitating effective communication between parties. The approach you take should depend on the specific circ*mstances and the relationship between you and the other party involved in the negotiation.

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Economists say an asset is subject to effects when an individual's demand for the asset depends on how many other people use it. interpersonal sociological contagion network

### Answers

Economists say an asset is subject to **network effects** when an individual's demand for the **asset **depends on how many other people use it.

What are network effects and how do they impact asset demand?

Network effects refer to the phenomenon where the** value **and **utility **of a particular asset increase as more individuals adopt and use it. In other words, the **demand **for the asset is influenced by the number of people already using it.

This effect arises from the **interconnectedness **and **interaction **among users creating a positive feedback loop. As more individuals adopt the asset, its benefits such as **increased **compatibility, network size or information sharing become more pronounced.

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Gallop Corporation prepared the following report for the first quarter of this year: Gallop's controller, Nancy Johnstone, studied the costs in detail, particularly focusing on cost behaviour. Her analysis revealed the following: - Fixed portion of the cost of goods sold for the quarter amounted to $1,022,000. - Of the selling expenses, 20% was variable with respect to the number of units. - All of the administrative expenses were fixed. Required: 1. Express the cost of goods sold and the selling expenses in terms of cost equations. (Round the "Variable cost" to 2 decimal places.) 2. Redo the above income statement using a contribution margin approach. (Do not round intermediate calculations.)

### Answers

The **cost** equation for selling expenses is: Cost = 0.2S (variable portion) + 0.8S (fixed portion) = 1S.

1. To express the cost of goods sold and the selling **expenses** in terms of cost equations, we need to identify the fixed and variable portions of each cost.

a) Cost of goods sold: The fixed portion of the cost of **goods** sold for the quarter is given as $1,022,000. Since the fixed portion remains constant regardless of the number of units, we can express it as a fixed cost equation: Cost = $1,022,000.

b) Selling expenses: It is mentioned that 20% of the selling expenses is variable with respect to the number of units. This means that 80% of the selling expenses is fixed. Let's assume the total selling expenses are represented by S.

The variable portion of the selling expenses can be calculated as 20% of S: 0.2S. Therefore, the fixed portion of the selling expenses can be expressed as 80% of S: 0.8S.

So, the cost equation for selling expenses is: Cost = 0.2S (variable portion) + 0.8S (fixed portion) = 1S.

2. To redo the income statement using a contribution margin approach, we need to calculate the contribution margin for each item. The contribution margin is the difference between the sales revenue and the variable costs.

a) Sales **revenue**: This information is not provided in the given report, so we cannot calculate the contribution margin for the cost of goods sold.

b) Contribution margin for selling expenses: The variable portion of the selling expenses is 20% of the total selling expenses, which is 0.2S. Therefore, the contribution margin for selling expenses is: Contribution margin = Sales revenue - Variable expenses = Sales revenue - 0.2S.

We cannot complete the income statement without the sales revenue information. To fully redo the income statement using a contribution margin approach, we need the sales revenue and additional details on other costs and expenses.

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please help

please help

The aBC Comoration is considering opecing art effice in a new market area that would atiow is so ncrecse its annual saves by \( \$ 2.7 \) milion. The cost of goods sold is estimeted to be 40 percert o

### Answers

The ABC Corporation is contemplating opening an office in a new market area to potentially increase its **annual savings** by $2.7 million. The cost of goods sold is estimated to be 40% of **sales**, and the company wants to determine the required increase in sales to achieve the desired savings.

To calculate the required increase in sales, we need to find the total sales needed to generate a **savings** of $2.7 million. Since the cost of goods sold is estimated to be 40% of sales, we can calculate the total sales by dividing the desired savings by the complement of the cost of goods sold** percentage** (1 - 0.40 = 0.60).

Let's denote the required increase in **sales** as "x." Using this information, we can set up the equation:

0.60x = $2.7 million

To solve for x, we divide both sides of the equation by 0.60:

x = $2.7 million / 0.60 ≈ $4.5 million

Therefore, the ABC Corporation would need to increase its sales by approximately $4.5 million to achieve an annual savings of $2.7 million. This increase in sales would provide the company with the necessary **revenue** to cover the cost of goods sold and generate the desired savings.

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If households have a greater desire to purchase fresh pasta, more resources will ultimately be allocated to the production of fresh pasta in a market economy because B. the price of fresh pasta will be driven up, thereby making fresh pasta production more profitable. C. economic planners will respond to the change in demand by raising the output quotas of fresh pasta producers. D. the prices paid for factors of production used in the fresh pasta industry will tend to fall.

### Answers

If households have a greater desire to purchase fresh pasta, more resources** **will ultimately be allocated to the production of fresh pasta in a market economy because the price of fresh pasta will be driven up, thereby making fresh pasta production more **profitable**.

When households show a greater preference for fresh pasta, the demand for this product increases in the market. As a result, the price of fresh pasta will be driven up due to the higher demand. This increase in price creates a **profitable** opportunity for producers in the fresh pasta industry. In response to the rising prices, producers will be motivated to allocate more resources to the production of fresh pasta.

This can involve **investing** in additional equipment, expanding production facilities, or increasing the labor force dedicated to making fresh pasta. By increasing the allocation of **resources**, producers aim to capture the increased profits resulting from the higher price of fresh pasta.

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Caspian Sea Drinks needs to raise $38.00 million by rssuing additional shares of stock If the market estimates CSD will pay a dividend of $2.80 next year, which will grow at 3.20% forever and the cost of equity to be 11.03%, then how many shares of slock must CSD sell? Answer format: Number: Round to 0 decimel places.

### Answers

Caspian Sea Drinks must sell approximately 1,072,583 **shares of stock** to raise $38.00 million.

Caspian Sea Drinks (CSD) needs to raise $38.00 million by issuing additional shares of stock. To determine how many **shares CSD** must sell, we need to calculate the value of each share.

First, let's calculate the dividend per share that CSD is expected to pay next year. The dividend is estimated to be $2.80 per share.

Next, we need to determine the growth rate of the dividend. It is given that the dividend will grow at a rate of 3.20% forever.

To calculate the **cost of equity**, we are given that it is 11.03%.

Using the dividend growth model, we can calculate the value of each share:

**Value per share **= Dividend / (Cost of equity - Dividend growth rate)

Substituting the given values:

Value per share = $2.80 / (11.03% - 3.20%)

Value per share = $2.80 / 0.079

Value per share ≈ $35.44

To raise $38.00 million, CSD needs to sell:

Number of shares = Total amount needed / Value per share

Number of shares = $38.00 million / $35.44

Number of shares ≈ 1,072,583 shares

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28. A manufacturer has 310 units in finished goods inventory at the end of the year. Using the per unit information provided below, compute the cost of finished goods inventory reported on the balance sheet under absorption costing.

Direct materials$ 51per unit

Direct labor$ 35per unit

Variable overhead$ 27per unit

Fixed overhead$ 31per unit

Multiple Choice

$33,790

$35,030

$36,270

$17,980

$44,640

### Answers

The cost of finished goods **inventory **reported on the** balance sheet** under absorption costing is $44,640 based on the given per unit costs and the number of units in inventory.

To compute the cost of finished goods inventory reported on the balance sheet under absorption costing, we need to calculate the total cost per unit and multiply it by the number of units in inventory.

Total cost per unit = Direct materials + **Direct labor** + Variable overhead + Fixed **overhead**

Total cost per unit = $51 + $35 + $27 + $31

Total cost per unit = $144

Cost of finished goods inventory = Total **cost **per unit × Number of units in inventory

Cost of finished goods inventory = $144 × 310

Cost of finished goods inventory = $44,640

Therefore, the cost of finished goods inventory reported on the balance sheet under absorption **costing **is $44,640.

The correct answer is:$44,640

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.Your client is a gun manufacturer. Due to the tragic nature of gun violence, many citizens have threatened to protest against your client. However, your client's manufacturing plant is located in rural Montana, so protesters cannot conveniently get there to stage a public protest. In preparing an SEC filing for this client, you disclosed the addresses of its Montana manufacturing plant and its company headquarters in downtown Seattle. Over 80 top company executives work at company headquarters. Your disclosure led to a large protest rally in downtown Seattle that created adverse publicity for your client. Your client now is upset because, historically, it only disclosed the address of its rural Montana plant in public filings. The SEC form, however, clearly required that a company's "principal places of business" be disclosed. Did you violate the duty of confidentiality?

### Answers

According to the given scenario, you disclosed the addresses of your client's** manufacturing plant** in rural Montana and its company headquarters in downtown Seattle in an SEC filing.

This disclosure led to a large protest rally in downtown Seattle and created adverse publicity for your client.

The question at hand is whether you violated the duty of confidentiality. To answer this, we need to consider a few key points:

1. Duty of confidentiality: As an attorney, you have a duty to maintain the confidentiality of your client's information. This duty is crucial to ensure that clients can trust their attorneys and share sensitive information **without fear **of it being disclosed.

2. SEC filing requirements: In this case, the SEC form required the disclosure of a company's "principal places of business." It is essential to **carefully interpret **and comply with the requirements outlined by regulatory bodies like the SEC.

3. Historical disclosure: Your client historically only disclosed the address of its rural Montana plant in public filings. This suggests that your client had previously limited the public disclosure of its company headquarters' address.

Considering these points, it appears that you may have violated the duty of confidentiality by disclosing the address of your client's company headquarters in downtown Seattle. While the SEC form required the disclosure of principal places of business, it is important to weigh the** potential impact **on your client's reputation and the adverse publicity that may arise from such disclosures.

In this situation, you could have explored alternatives to fully comply with the SEC filing requirements while minimizing the risk of adverse publicity. For example, you could have sought to redact or limit the disclosure of the company headquarters' address, provided that such action was** legally permissible** and did not violate any regulations or obligations.

It is important to note that legal and ethical considerations can vary, so it would be advisable to consult with an attorney familiar with the specifics of this situation for a **comprehensive** assessment.

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Assuming all of the following firms have a required return of 14 percent, which would you expect to have a positive present value of growth opportunities Select one: a. None of the above firms are expected to have positive PVGO b. A firm with an E/P ratio of 20 percent c. A firm with a P/E ratio of 6 d. A firm with a P/E ratio of 9

### Answers

among the given options, we would expect firm b, with an E/P ratio of 20 percent, to have a positive PVGO. The other firms, with lower P/E ratios, are less likely to have a positive **PVGO**.

The Present Value of Growth Opportunities (PVGO) is a measure that determines whether a firm's investment opportunities have a positive or negative value. To determine which firm would have a positive PVGO, we need to consider their E/P ratio and P/E ratio.

The E/P ratio, or Earnings-to-Price ratio, indicates the earnings generated by a firm per unit of its stock price. A higher E/P ratio suggests that the firm generates more earnings relative to its stock price. Conversely, a lower E/P ratio indicates lower earnings relative to the stock price.

The P/E ratio, or Price-to-Earnings ratio, shows the market's valuation of a firm's earnings. A higher P/E ratio suggests that **investors** are willing to pay a premium for the firm's earnings **potential**. Conversely, a lower P/E ratio indicates a lower valuation of earnings.

Given that all the firms have a required return of 14 percent, we can determine the positive PVGO based on their ratios.

b. A firm with an E/P ratio of 20 percent:

A higher E/P ratio implies that the firm generates more earnings per unit of its stock price. This suggests that the firm has positive growth opportunities. Therefore, it is reasonable to expect a positive PVGO for a firm with an E/P ratio of 20 percent.

c. A firm with a P/E ratio of 6:

A lower P/E ratio indicates a lower valuation of earnings. This suggests that the market has a lower expectation for the firm's **growth** potential. Therefore, it is less likely for a firm with a P/E ratio of 6 to have a positive PVGO.

d. A firm with a P/E ratio of 9:

Similarly, a lower P/E ratio implies a lower valuation of **earnings**. While it is possible for a firm with a P/E ratio of 9 to have positive growth opportunities, it is less likely compared to a firm with a higher E/P ratio.

To summarize, among the given options, we would expect firm b, with an E/P ratio of 20 percent, to have a positive PVGO. The other firms, with lower P/E ratios, are less likely to have a positive PVGO.

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We have a bond which we buy for $700 and 5 years later they give

us the par. If the coupon rate is 8% and the ytm is 12%, what is

the true rate of return per year?

### Answers

The true rate of return per year, in this case, is -100%. This indicates that the **investment **has resulted in a loss.

To calculate the **true rate** of return per year, we need to consider the purchase price, coupon payments, and the final par value.

In this case, the bond is purchased for $700, and the **coupon rate** is 8%. This means that each year, you will receive coupon payments equal to 8% of the par value.

Let's assume the par value of the bond is $1,000. Over the 5-year period, you will receive 5 coupon payments of $80 each ($1,000 * 8%).

At the end of 5 years, you will also receive the par value of $1,000.

To calculate the true rate of return per year, we need to determine the total **cash inflow** and outflow over the 5-year period.

Total cash inflow = Coupon payments + Par value = 5 * $80 + $1,000 = $400 + $1,000 = $1,400

Total cash outflow = Purchase price = $700

Net cash flow = Total cash inflow - Total cash outflow = $1,400 - $700 = $700

Now, we can calculate the true rate of return per year using the net cash flow:

True rate of return per year = (Net cash flow / Purchase price)^(1/number of years) - 1

= ($700 / $700)^(1/5) - 1

= 0^(1/5) - 1

= 0 - 1

= -1

The true rate of return per year is -100%.

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What is the "principal" to have $ 2,500 in 9 months for the

payment of tuition, at 6% interest?

### Answers

The principal needed to have $2,500 in 9 months for the payment of tuition at 6% **interest **is $2,336.32.

To determine the principal required to have a specific amount of money in the future, we can use the formula for compound interest. The **formula **is:

A = [tex]P(1 + r/n)^(^n^t^)[/tex]

Where:

A = the future value (amount desired)

P = the **principal **(initial amount)

r = the annual interest rate (expressed as a decimal)

n = the number of times interest is compounded per year

t = the number of years or time period

In this case, the desired future value is $2,500, the interest rate is 6% (or 0.06 as a decimal), the time period is 9 months (or 9/12 = 0.75 years), and we assume the interest is **compounded **annually (n = 1).

Using the formula, we can solve for P:

$2,500 = [tex]P(1 + 0.06/1)^(^1 ^* ^0^.^7^5^)[/tex]

Simplifying the equation, we have:

$2,500 = [tex]P(1.06)^0^.^7^5[/tex]

Dividing both sides by [tex](1.06)^0^.^7^5[/tex], we find:

P = $2,500 / [tex](1.06)^0^.^7^5[/tex]

Calculating the right side of the equation, we obtain:

P = $2,336.32

Therefore, the principal needed to have $2,500 in 9 months at 6% interest is approximately $2,336.32.

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