Master Business with Fun Quizzes & Brain Teasers!

Assignment: Capital Budgeting DecisionsYour company is considering undertaking a project to expand an existing product line. The required rate of return on the project is 8% and the maximum allowable payback period is 3 years.time0123456Cash flow$ 10,0002,4004,8003,2003,2002,8002,400Evaluate the project using each of the following methods. For each method, should the project be accepted or rejected? Justify your answer based on the method used to evaluate the projects cash flows.Payback periodInternal Rate of Return (IRR)Simple Rate of ReturnNet Present Value
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First National Bank charges 11.1 percent compounded monthly on its business loans. First United Bank charges 11.3 percent compounded semiannually. Calculate the EAR for each bank. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
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The spread of the coronavirus in the U.S. has had negative effects on the U.S. economy. GDP growth rate went negative (-5.8%) in the first quarter of 2020 and unemployment rate spiked to 14.7% in April. Use the aggregate demand and aggregate supply model from chapter 10 to explain this short run downturn? Make sure to indicate the shifts in the curves.
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Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October 1, 2019. The machine's residual value was $500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.) Straight-line method 2019 $ 2020 $ Sum-of-the-years'-digits method 2019 $ 2020 $ Double-declining-balance method 2019 $ 2020 $ Next Level Which method produces the highest book value at the end of 2020
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Alpaca Corporation had revenues of $270,000 in its first year of operations. The company has not collected on $18,700 of its sales and still owes $26,300 on $80,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $14,500 in salaries. Owners invested $25,000 in the business and $25,000 was borrowed on a five-year note. The company paid $2,400 in interest that was the amount owed for the year, and paid $5,400 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%.Compute net income for the first year for Alpaca Corporation:a) $ 183,092b) $ 186,186c) $ 225,000d) $ 204,600
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Sweet Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the companys bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,088,700 of 14% term corporate bonds on March 1, 2020, due on March 1, 2035, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2020. At the time of issuance, the market interest rate for similar financial instruments is 12%. As the controller of the company, determine the selling price of the bonds.
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which are the most likely uses of capital invested in a business?
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Bill has always taken his dry cleaning to Tom's Dry Cleaning, Inc. One morning while Bill is in a hurry, he walks in the door of Tom's, drops off his suits, and leaves without saying anything. There is no discussion of a price, and Bill and Tom's do not sign any documents. Later, a Tom's employee delivers the suits to Bill's office along with an invoice. With respect to Bill's obligation to pay the invoice, this is
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Doug Pederson Corporation bases its predetermined overhead rate on machine-hours. Data for 2017 appear below: Estimated machine-hours 73,000 Estimated total manufacturing overhead $1,057,730 Actual machine-hours 74,900 Actual total manufacturing overhead $1,147,000 The predetermined overhead rate for 2017 was closest to:
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A manager creates a policy document that lists the policy name, identifying information, and the operational policy. When she gets to the section marked "roles and responsibilities," she is uncertain if she should include the names of the individuals assigned to the roles and responsibilities, but decides ultimately that she will because these individuals were newly appointed and have played an active role in reviewing and providing feedback on the policy. Which of the following statements is an accurate assessment of this managers choice to include the names of the individuals?a. the manager made the right choice to include the names of the individuals in the policy because it is highly unlikely that newly appointed employees will leave the company anytime soon. b. the manager should have postponed her decision to include the names until after she consulted the hr department. c. the manager should not have included the names because even though they were newly appointed, individuals join and leave and the company. d. the manager should have waited to include the individuals' names until she received verification that their contracts would be renewed.
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Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist_____its price, quantity would fall by a percentage than the rise in price, causing profit to_______. Therefore, a monopolist will_______produce a quantity at which the demand curve is elastic.
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Many influential economists, politicians, and business leaders think that a shift toward a more integrated and interdependent global economy is a good thing. There is evidence to support the theory that falling barriers to international trade and investment drive the global economy toward greater prosperity. There are, however, critics who argue against globalization. Anecdotes, evidence, and arguments can be collected to support each side of the debate. International businesses need to understand the nature of the globalization debate and observe how their own practices may act in support of or against globalization. Understanding how each side sees the issues can lead toward better solutions to the problems caused by globalization.
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Midyear on July 31st, the Baldwin Corporation's balance sheet reported: Total Liabilities of $101.255 million Cash of $8.040 million Total Assets of $163.111 million Retained Earnings of $34.226 million. What was the Baldwin Corporation's common stock
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You run a hospital with 100 rooms. Fixed daily cost is $876.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $13.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $79.00 per room per day. You sold 32.00 rooms today, how much profit/loss did you earn for today.
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ABC Appliance offers a warranty requiring an annual fee. The warranty may be purchased at the time of sale or at any time within the first year after the appliance was purchased. The warranty fee after the date of purchase is twice the time-of-purchase fee. When asked why the fee was higher after the date of purchase, ABC's president said, "Buying a warranty is voluntary. We've noted that those who buy the warranty after the purchase date have a greater need for service." Charging the same rate or a lower rate after the date of purchase would expose ABC to what problem that also impacts private insurers?
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Use the following information to answer this question. Windswept, Inc. 2017 Income Statement ($ in millions)Net sales $ 9,200 Cost of goods sold 7,550 Depreciation 430 Earnings before interest and taxes $ 1,220 Interest paid 92 Taxable income $ 1,128 Taxes 395 Net income $ 733 Windswept, Inc. 2016 and 2017 Balance Sheets ($ in millions) 2016 2017 2016 2017 Cash $ 200 $ 235 Accounts payable $ 1,370 $ 1,505 Accounts rec. 950 850 Long-term debt 1,050 1,315 Inventory 1,620 1,625 Common stock 3,200 2,950 Total $ 2,770 $ 2,710 Retained earnings 510 760 Net fixed assets 3,360 3,820 Total assets $ 6,130 $ 6,530 Total liab. & equity $ 6,130 $ 6,530 What is the return on equity for 2017?
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The interior decorators, designers, and architects of WorldKraft Design work together in self-managing the company's work groups. This structure is key to the organization's culture, and it is crucial that new hires be compatible with the work group to which they are assigned. In this case, it would be best to use _____ to hire potential employees.
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An article in Forbes described these characteristics of the airline industry: "Airlines aren't like normal consumer businesses... Infrastructure including aircraft, gates and runways takes years to put in place. Capacity rebalancing in response to demand shifts isn't easy and idle infrastructure of this magnitude is very expensive." Source: Kevin O'Marah, "The Lesson of the Delta Disaster: Flying Is Too Cheap," Forbes, August 11, 2016. Do the characteristics referred to in the article help to explain why the airline industry is an oligopoly? Briefly explain.
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On January 1, Year 1, Ballard company purchased a machine for $36,000. On January 1, Year 2, the company spent $11,000 to improve its quality. The machine had a $6,000 salvage value and a 6-year life, which are unchanged. Ballard uses the straight-line method. What is the book value of the machine on December 31, Year 4
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Use the following Window Breeze Company income statement to answer the question. Window Breeze Company is a small manufacturer of window air conditioners and reported the following: Window Breeze Company Full Costing Income Statement For the Year Ending December 31, 2011 Sales ($150 per unit) $120,000 Less cost of goods sold 35,000 Gross margin 85,000 Less selling and administrative expenses: Selling expense $15,000 Administrative expense 15,000 30,000 Net income $55,000 Annual FMOH was $25,000 and 1,000 units were produced. All administrative costs were fixed. Included in the $15,000 selling expense was $10,000 of fixed selling.
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1) Using the average cost method, compute the equivalent units of production in each of the following cases:A) Units started in production during the month, 72,000; units completed and transferred, 52,800; and units in process at the end of the month (100% complete as to materials; 60% complete as to conversion), 19,200. (There was no beginning inventory.B) Units in process at the beginning of the month (100% complete as to materials; 30% complete as to conversion), 12,000; units started during the month, 48,000; and units in process at the end of the month (100% complete as to materials; 40% complete as to conversion), 24,000.2) In Department D, materials are added uniformly throughout processing. The beginning inventory was considered 80% complete, as was the ending inventory. Assume that there were 6,000 units in the beginning inventory and 20,000 in the ending inventory, and that 80,000 units were completed and transferred out of Department D. What are the equivalent units for the period using the average cost method?3) If in question 2 the total costs charged to the department amounted to $960,000, including the $48,000 cost of the beginning inventory, what is the cost of the units completed and transferred out?
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Jason Rodriguez works as a waiter in a Houston restaurant. His boss overhears Jason telling a co-worker during a break period that he thinks that the president ought to be impeached. The boss, a big supporter of the president, fires Jason on the spot. Jason thinks the boss violated his freedom of speech. Would you expect that Jason would be able to get his job back on that basis?
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Develop an Excel worksheet simulation for the following problem. The management of Paragon Household Products is considering the introduction of a new product. The fixed cost to begin the production of the product is $25,388. The variable cost for the product is uniformly distributed between $15 and $20 per unit. The product will sell for $42 per unit. Demand for the product is best described by a normal probability distribution with a mean of 1200 units and a standard deviation of 300 units. Develop a spreadsheet simulation that uses 500 simulation trials:A. What is the mean profit for the simulation?B. What is the probability that the project will result in a loss?C. What is your recommendation concerning the introduction of the product?
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The independent cases are listed below that includes all items relevant to operating activities: Case A Case B Case C Sales revenue $ 65,000 $ 55,000 $ 96,000 Cost of goods sold 35,000 26,000 65,000 Depreciation expense 10,000 2,000 26,000 Salaries and wages expense 5,000 13,000 8,000 Net income (loss) 15,000 14,000 (3,000) Accounts receivable increase (decrease) (1,000) 4,000 3,000 Inventory increase (decrease) 2,000 0 (3,000) Accounts payable increase (decrease) 0 2,500 (1,000) Salaries and wages payable increase (decrease) 1,500 (2,000) 1,000 Compute cash flows from operating activities using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Case A Case B Case C Cash Collected from Customers Cash Payments to Suppliers Cash Payments for Salaries and Wages Net Cash Provided by Operating Activities $ 0 $ 0 $ 0
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