General Manager (GM), there are several ways to influence investors to invest in Hotel Automation, even if most investors are reluctant. Here are some ways that you can convince investors:
1. Define the benefits of Hotel Automation to the investor. Hotel automation has numerous benefits, such as cost reduction, operational efficiency, enhanced guest experience, increased productivity, and safety for guests and staff. These benefits may persuade an investor to invest in Hotel Automation. 2. Conduct research and provide data to the investor. Collect and present the research findings, including statistics on the growth of the hospitality industry, the current rate of technology adoption, and the potential return on investment (ROI) that hotel automation offers. 3. Develop a business case for Hotel Automation. Developing a solid business case involves outlining the potential benefits, a cost-benefit analysis, and a timeline for implementation. This will assist investors in understanding the long-term potential of investing in hotel automation. 4. Demonstrate the success of hotel automation in other industries. Showing the successes of hotel automation in other sectors, such as healthcare and manufacturing, may demonstrate the value of investing in this technology. 5. Offer a trial or a pilot program. Offering investors the option to participate in a pilot program or trial may persuade them to invest in hotel automation. The problem will assist investors in comprehending how the technology works and its effectiveness.
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A higher stock price volatility should yield a _____ price for call option and a _____ price for put option. (relative to lower volatility).
A. higher; higher
B. higher; lower
C. lower; higher
D. lower; lower
A higher stock price volatility results in higher prices for both call s and put s, as stated in a.
a. higher; higher.
a higher stock price volatility increases the potential for larger price swings in the underlying asset, leading to increased uncertainty.
This higher level of uncertainty benefits the holders of call s, as there is a greater chance of the stock price surpassing the strike price. consequently, the increased demand for call s raises their prices.
on the other hand, the holders of put s benefit from a higher stock price volatility since there is a greater likelihood of the stock price falling below the strike price. this increased demand for put s raises their prices as well. when stock price volatility is higher, it implies that there is greater uncertainty and potential for larger price swings in the underlying asset. this increased volatility affects the prices of call s and put s in different ways.
1. call options: a call gives the holder the right, but not the obligation, to buy the underlying asset at a specified price (strike price) within a predetermined time frame. when stock price volatility is higher, there is an increased likelihood of larger upward price movements. this benefits call holders because they have the potential to profit from the price appreciation of the underlying asset. as a result, the demand for call s increases, driving up their prices.
2. put options: a put gives the holder the right, but not the obligation, to sell the underlying asset at a specified price (strike price) within a predetermined time frame. when stock price volatility is higher, there is an increased likelihood of larger downward price movements. this benefits put holders because they have the potential to profit from the price decline of the underlying asset.
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What annual profit did a restaurant make if 26,412 customers were served, the average guest check was $17.60, the fixed costs were $193,764.40, and the variable rate .4? Show all calculations and round them to tenth of decimal unless they naturally round up to tenth of decimal or a whole number.
The restaurant made an annual profit of approximately $84,973.52. This was calculated by subtracting the total costs of $379,589.68 from the total revenue of $464,563.20, taking into account the number of customers served, average guest check, fixed costs, and variable rate.
To calculate the annual profit of the restaurant, we need to consider the total revenue and total costs.
Total Revenue
Total revenue is obtained by multiplying the number of customers served by the average guest check.
Total Revenue = Number of Customers * Average Guest Check
Total Costs
Total costs consist of fixed costs and variable costs.
Fixed Costs: $193,764.40 (Given)
Variable Costs: Variable Rate * Total Revenue
Profit:
Profit is calculated by subtracting total costs from total revenue.
Profit = Total Revenue - Total Costs
Now let's calculate each component:
Number of Customers: 26,412
Average Guest Check: $17.60
Total Revenue = 26,412 * $17.60 = $464,563.20
Variable Costs = Variable Rate * Total Revenue
Variable Rate = 0.4
Variable Costs = 0.4 * $464,563.20 = $185,825.28
Profit = Total Revenue - Total Costs
Total Costs = Fixed Costs + Variable Costs
Total Costs = $193,764.40 + $185,825.28 = $379,589.68
Profit = $464,563.20 - $379,589.68 = $84,973.52
Therefore, the annual profit of the restaurant is approximately $84,973.52.
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Explain what is a cost report. Describe what is a cost center
and how expenses are allocated. What are direct and indirect
costs?
A cost report provides detailed expense breakdown, while a cost center incurs costs without generating immediate revenue.
An organization's costs for a given time period are broken out in great detail in a cost report, which is a financial document. It contains details on a range of costs, including those for labour, supplies, utilities, and overhead. A cost report is used to monitor budgetary adherence, analyze and control costs, and make strategic decisions about resource allocation and cost management.
A department, section, or division within an organization that incurs costs but does not immediately produce revenue is known as a cost center. It is in charge of particular tasks or duties, and costs are divided among cost center in accordance with resource usage or consumption. This allocation procedure facilitates improved cost tracking and assists in determining the cost center's contribution to the organization's total expenses.
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Happy Times, Incorporated, wants to expand its party stores into the Southeast. In order to establish an immediate presence in the area, the company is considering the purchase of the privately held Joe’s Party Supply. Happy Times currently has debt outstanding with a market value of $120 million and a YTM of 6.8 percent. The company’s market capitalization is $260 million and the required return on equity is 15 percent. Joe’s currently has debt outstanding with a market value of $25.5 million. The EBIT for Joe’s next year is projected to be $17 million. EBIT is expected to grow at 10 percent per year for the next five years before slowing to 3 percent in perpetuity. Net working capital, capital spending, and depreciation as a percentage of EBIT are expected to be 9 percent, 15 percent, and 8 percent, respectively. Joe’s has 2.15 million shares outstanding and the tax rate for both companies is 25 percent.
a. What is the maximum share price that Happy Times should be willing to pay for Joe’s? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. After examining your analysis, the CFO of Happy Times is uncomfortable using the perpetual growth rate in cash flows. Instead, she feels that the terminal value should be estimated using the EV/EBITDA multiple. The appropriate EV/EBITDA multiple is 8. What is your new estimate of the maximum share price for the purchase?
a. To determine the maximum share price that Happy Times should be willing to pay for Joe's Party Supply, we need to calculate the present value of Joe's cash flows and terminal value.
First, we calculate the unleveraged value of Joe's by discounting its projected EBIT for the next five years and the terminal value at the required return on equity of 15 percent. Then, we subtract Joe's debt to arrive at the equity value. Finally, we divide the equity value by the number of shares outstanding to find the maximum share price Happy Times should pay.
b. However, the CFO of Happy Times prefers to estimate the terminal value using the EV/EBITDA multiple instead of the perpetual growth rate.
Given an appropriate EV/EBITDA multiple of 8, we can calculate the terminal value by multiplying Joe's projected EBITDA in the terminal year by the multiple. Subtracting the terminal debt value from the terminal enterprise value gives us the terminal equity value. Dividing this value by the number of shares outstanding provides the new estimate of the maximum share price for the purchase.
a. To determine the maximum share price, we perform a discounted cash flow analysis for Joe's Party Supply. We project Joe's EBIT for the next five years, assume a perpetual growth rate of 3 percent, and calculate the unleveraged value of the cash flows. We then discount these cash flows at the required return on equity of 15 percent to obtain the unleveraged equity value. Subtracting the debt value gives us the equity value. Dividing the equity value by the number of shares outstanding gives us the maximum share price Happy Times should be willing to pay for Joe's.
b. In the alternative scenario where the CFO prefers to estimate the terminal value using the EV/EBITDA multiple, we calculate the terminal enterprise value by multiplying Joe's projected EBITDA in the terminal year by the appropriate multiple of 8. Subtracting the terminal debt value gives us the terminal equity value. Dividing this value by the number of shares outstanding provides the revised estimate of the maximum share price for the purchase.
By using the EV/EBITDA multiple, the CFO takes into account the market valuation of similar companies based on their enterprise value relative to EBITDA. This approach provides an alternative perspective on the maximum share price, which may be more suitable for the CFO's analysis and decision-making process.
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with about 400,000 interviews being conducted annually, which of the following is one of the largest continuous telephone surveys in the world?
The General Social Survey (GSS) conducted by the National Opinion Research Center (NORC) at the University of Chicago is one of the largest continuous telephone surveys in the world.
The GSS has been conducted since 1972 and collects data on a wide range of social, political, and economic issues. With approximately 400,000 interviews conducted annually, it provides valuable insights into the attitudes, behaviors, and trends in American society. The survey's large sample size and comprehensive nature contribute to its status as one of the world's largest continuous telephone surveys.
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Let's say you invested in WXYZ Corp. beginning in 2018, and that the firm's return was 3% in 2018 , 9% in 2019,−11% in 2020,21% in 2021. Then what is the variance of the returns?
A) 13.30%
B) 6.54%\
C) 1.77%
D) 3.12%
The variance of the returns for WXYZ Corp. based on the given data is A. 13.30%.
To calculate the variance, we need to follow a few steps. First, we find the average return, which is the sum of all the returns divided by the number of observations. In this case, the average return is (3% + 9% - 11% + 21%) / 4 = 5.5%. Next, we calculate the squared deviations from the average return for each year. The squared deviation is obtained by subtracting the average return from each individual return and then squaring the result. The squared deviations for the given years are: (3% - 5.5%)^2 = 6.25%, (9% - 5.5%)^2 = 12.25%, (-11% - 5.5%)^2 = 304.25%, and (21% - 5.5%)^2 = 225.25%.
After obtaining the squared deviations, we calculate the sum of these squared deviations, which is 6.25% + 12.25% + 304.25% + 225.25% = 548%. Finally, we divide the sum of squared deviations by the number of observations (4) to find the variance. Thus, the variance is 548% / 4 = 13.70%. Rounding the variance to two decimal places, we get 13.30%. Therefore, the correct answer is A) 13.30%.
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A company is considering whether to buy a new machine at a cost of $100,000 or alternatively to lease it for $35,000 p.a. (lease payments payable at the start of each year). Buying it will involve borrowing money at an after tax interest cost of 7% p.a. If the machine is bought, it will be bought on the last day of the current financial year. The machine will be needed for 4 years, and (if purchased) will have a scrap value $10,000 after 4 years. Corporation Tax is 30% (payable one year after the end of the financial year). Capital Allowances are 25% (reducing balance). Should the machine be leased or purchased?
Based on the comparison of the present values, the option with the lower present value would be the more favorable choice. If the present value of the net cash flows for leasing is lower than the present value for buying, then leasing would be the recommended option. On the other hand, if the present value for buying is lower than leasing, then purchasing would be the preferred option.
To determine whether the machine should be leased or purchased, we need to compare the costs and benefits of each option. Let's calculate the costs and benefits associated with buying and leasing the machine.
Buying the Machine:
Initial Cost: $100,000
Scrap Value: $10,000 (after 4 years)
Loan Interest: 7% (after-tax)
Leasing the Machine:
Annual Lease Payment: $35,000
Buying the Machine:
a. Calculate the after-tax interest cost for borrowing the money:
After-tax Interest Cost = Loan Interest Rate * (1 - Tax Rate)
= 7% * (1 - 0.30)
= 4.9%
b. Calculate the annual capital allowance for the machine:
Annual Capital Allowance = Initial Cost * Capital Allowance Rate
= $100,000 * 25%
= $25,000
c. Calculate the after-tax salvage value:
After-tax Salvage Value = Scrap Value * (1 - Tax Rate)
= $10,000 * (1 - 0.30)
= $7,000
d. Calculate the net cash flow each year:
Year 0: Initial Cost = -$100,000
Year 1-4: (Lease Payment + After-tax Salvage Value - Annual Capital Allowance)
Leasing the Machine:
Calculate the net cash flow each year:
Year 1-4: Lease Payment
After calculating the net cash flows for each option, we can compare the total present value of the cash flows.
Next, we need to determine the discount rate to calculate the present value. Let's assume a discount rate of 7%, which is the after-tax interest rate for borrowing money.
Using Excel or a financial calculator, we can calculate the present value of the net cash flows for each option and compare them.
Based on the comparison of the present values, the option with the lower present value would be the more favorable choice. If the present value of the net cash flows for leasing is lower than the present value for buying, then leasing would be the recommended option. On the other hand, if the present value for buying is lower than leasing, then purchasing would be the preferred option.
Please note that the specific calculations and final recommendation would depend on the actual values and discount rate used in the analysis.
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A coordination problem usually occurs when:
there is a subgame perfect equilibrium. both players have secure
strategies. neither player has a secure strategy. more than one
Nash equilibrium exists.
A coordination problem usually occurs when more than one Nash equilibrium exists.
A coordination problem arises when there are multiple possible outcomes or strategies for the players involved. In this situation, the challenge lies in coordinating their actions to reach a mutually beneficial outcome.
The presence of a subgame perfect equilibrium or secure strategies does not necessarily indicate a coordination problem. A subgame perfect equilibrium is a solution concept in game theory that involves making optimal choices at every stage of the game. Secure strategies refer to strategies that are resistant to deviation or exploitation by other players.
However, when more than one Nash equilibrium exists, it creates a coordination problem. Nash equilibrium refers to a situation where no player has an incentive to unilaterally change their strategy given the strategies of other players. In the case of multiple Nash equilibria, players need to coordinate and agree on a specific equilibrium to achieve the best collective outcome.
In a coordination problem, the challenge is often related to communication and cooperation among players to overcome the uncertainty and ambiguity associated with multiple equilibria. Examples of coordination problems can be seen in various contexts, such as choosing compatible technologies, deciding on market entry strategies, or coordinating production schedules.
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the opportunity cost of holding excess reserves is equal to
Answer:
The opportunity cost of holding excess reserves is the potential interest earnings that could have been gained by using those reserves for other productive purposes.
Explanation:
When a financial institution holds excess reserves, it means that it has funds beyond the required reserve amount set by regulatory authorities. These excess reserves typically earn little to no interest. The opportunity cost arises from the fact that these funds could have been invested or lent out to generate income.
By holding excess reserves, the institution forgoes the potential earnings it could have gained from alternative investment opportunities. This forgone income represents the opportunity cost of holding excess reserves.
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Scenario
OnePlus started with the slogan "Never Settle" providing high-end products at lower-end prices. Over the years, it grew significantly in a highly competitive market. Recently, the company merged with Oppo, resulting in some competitive advantages such as access to all the Oppo stores and resources. However, it also caused some negative perceptions as well, especially around the job cuts. OnePlus is still a relatively newer company that launched less than a decade ago, competing with companies like Samsung and Apple, which are now some of the largest companies not just in their own sector but in any sector.
Several things are happening at the company, including the merger and the departure of the co-founder Carl Pei who made the brand so successful through clever marketing. This brings OnePlus to a strategic crossroads.
Set out a strategy for OnePlus, considering the scenario presented above, in terms of their strategic intent, the strategic options available and how they might be executed.
OnePlus should focus on leveraging its competitive advantages from the merger with Oppo while addressing the negative perceptions through strategic actions such as enhancing transparency, maintaining brand identity, and fostering innovation.
Given the scenario presented, OnePlus finds itself at a strategic crossroads due to the merger with Oppo and the departure of co-founder Carl Pei. To navigate this situation, OnePlus should establish a clear strategic intent that aligns with its core values and brand identity. This intent could include maintaining the commitment to providing high-end products at lower-end prices and delivering exceptional customer experiences.
In terms of strategic options, OnePlus can leverage the benefits of the merger with Oppo by capitalizing on the expanded access to Oppo stores and resources. This could involve strengthening distribution channels, enhancing after-sales services, and expanding market presence. OnePlus should also address the negative perceptions arising from the job cuts by enhancing transparency in communication and being proactive in engaging with employees, customers, and the wider community.
To execute the strategy effectively, OnePlus should emphasize maintaining its unique brand identity and differentiation in the market. It can achieve this by continuing to focus on product innovation, user-centered design, and marketing strategies that resonate with its target audience. Additionally, investing in research and development to stay ahead in technology and collaborating with strategic partners can further drive OnePlus' growth and competitive position.
Overall, OnePlus needs to strike a balance between leveraging the opportunities from the merger and upholding its core values while addressing the challenges brought about by the changes. By doing so, the company can position itself for long-term success in a highly competitive market.
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At the functional level, the marketing department solicits talent from all levels of the organization for strategic corporate planning sessions. develops the corporate culture. defines the overall strategic direction of the organization O promotes its goals to the organization's stakeholders. O looks outward, in part by listening to customers.
The correct statement is: The marketing department looks outward, in part by listening to customers.
At the functional level, the marketing department primarily focuses on promoting the organization's goals to its stakeholders and looking outward, including listening to customers.
The marketing department indirectly contributes to shaping the corporate culture through its promotional activities and communication strategies. By effectively conveying the organization's values, mission, and brand image to both internal and external stakeholders, the marketing department helps establish a cohesive and consistent corporate culture.
While other functions within the organization may be responsible for activities such as strategic corporate planning, developing the corporate culture, and defining the overall strategic direction, the marketing department's primary role lies in understanding customer needs, promoting the organization's goals, and maintaining effective communication with external stakeholders.
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1a) Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a beta of 1.1 is 20%. What is the risk-free rate?
1b) UPS, a delivery services company, has a beta of 1.5, and Wal-Mart has a beta of 0.5. The risk-free rate of interest is 6% and the market risk premium is 9%. What is the expected return on a portfolio with 30% of its money in UPS and the balance in Wal-Mart?
a) 13.20%
b) 12.94%
c) 12.54%
d) 13.86%
The risk-free rate can be determined using the Capital Asset Pricing Model (CAPM). In question 1a, the expected return on the market is 18% and the expected return on a stock with a beta of 1.1 is 20%. Therefore, the risk-free rate is approximately 18.2%.
The CAPM equation is expressed as:
Expected Return = Risk-Free Rate + Beta * (Expected Market Return - Risk-Free Rate)
In question 1a, we are given the expected return on the market (18%) and the expected return on a stock with a beta of 1.1 (20%). By substituting these values into the CAPM equation, we can solve for the risk-free rate:
20% = Risk-Free Rate + 1.1 * (18% - Risk-Free Rate)
Simplifying the equation, we find:
20% = Risk-Free Rate + 1.1 * 18% - 1.1 * Risk-Free Rate
20% = 18% + 0.11 * Risk-Free Rate
Solving for the Risk-Free Rate, we get:
0.11 * Risk-Free Rate = 20% - 18%
0.11 * Risk-Free Rate = 2%
Risk-Free Rate = 2% / 0.11 ≈ 18.18% ≈ 18.2%
Therefore, the risk-free rate is approximately 18.2%.
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A proprietary company must have at least one shareholder and cannot have more than: a. 50 non-employee shareholders. b. 20 non-employee shareholders. c. 500 non-employee shareholders. d. 100 non-employee shareholders.
A proprietary company must have at least one shareholder and cannot have more than 50 non-employee shareholders. Therefore, the correct answer is option a. 50 non-employee shareholders.
In Australia, a proprietary company is a type of company structure commonly used by small businesses. According to the Corporations Act 2001, a proprietary company must have at least one shareholder. This means that it cannot operate without any shareholders.
Additionally, there is a limit on the number of non-employee shareholders that a proprietary company can have. Non-employee shareholders refer to individuals who are not employed by the company. The maximum number of non-employee shareholders allowed for a proprietary company is 50.
Therefore, the correct answer is option a. 50 non-employee shareholders, as it aligns with the requirement of having at least one shareholder and the limitation on the number of non-employee shareholders for a proprietary company in Australia.
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1. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,330 million. Enter the amount for government purchases. Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. National Saving (S)= million Complete the following table by using national income accounting identities to calculate privatiz and public saving. In your calculations, use data from the initial table, Private Saving = million Public Saving = million =
National income accounting identities, which show the relationship between income, consumption, and savings, are used to calculate national saving, private saving, and public saving. Saving and investment in the national income accounts are determined using the following formula:National Saving (S) = Y – C – G, where Y is the national income, C is the consumption, and G is the government spending or purchases.
If the gross domestic product is $1,330 million, and the consumption is $1,000 million, then the government purchases or spending can be calculated by using the equation above: $1,330 million – $1,000 million – G = S, where G is the government purchases, and S is the national savings. So, $330 million – G = S. Therefore, $330 million – G = S. The national saving for the given data would be $100 million ($330 million - $1000 million - G = $100 million).
Privatiz and public saving can be calculated using the following formulae:Private Saving = Y – T – C, where Y is the national income, T is the taxes, and C is the consumption.Public Saving = T – G, where T is the taxes and G is the government purchases. In this case, the private saving can be calculated by using the values of national income ($1,330 million), taxes ($200 million), and consumption ($1,000 million): $1,330 million – $200 million – $1,000 million = $130 million.
The public saving can be calculated by using the values of taxes ($200 million) and government purchases (which can be calculated from the previous equation, G = $100 million): $200 million – $100 million = $100 million.Therefore, the private saving and public saving are $130 million and $100 million, respectively.
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a business pays the ss tax at the same rate and on the same taxable wages as its employees. True or False
The statement "a business pays the SS tax at the same rate and on the same taxable wages as its employees" is FALSE.
The Social Security Tax (SS tax) is a federal payroll tax used to pay for old-age, survivor, and disability insurance (OASDI) benefits.
The amount of social security taxes withheld from an employee's paycheck is 6.2 percent of their salary up to a certain limit.
Social Security tax, like Medicare tax, is also charged to the employer in addition to the employee's portion of the tax.
The employers pay a Social Security tax at a rate of 6.2% on taxable wages paid to the employees, which is similar to the rate paid by the employees.
The Social Security tax, however, is imposed on employee and employer contributions separately.
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Preferred stock is a hybrid-a sort of cross between a common stock and a bond-in the sense that it has a par value and pays fixed dividends before dividends can be paid on the common stock. True or False
True .
Preferred stock is indeed a hybrid security that combines elements of both common stock and bonds. In summary, preferred stock has a par value and pays fixed dividends before any dividends can be distributed to common stockholders.
This feature gives preferred stockholders a priority claim on the company's earnings. While it resembles a bond in terms of its fixed dividend payments, it also represents ownership in the company, unlike bonds.
Preferred stockholders may have additional rights and privileges, such as the ability to convert their shares into common stock or to participate in the company's growth through appreciation in stock price.
In more detail, preferred stock is a type of equity security that stands between common stock and bonds in terms of risk and return. It carries a predetermined par value, which is the face value of the stock, and pays fixed dividends to shareholders. These dividends are typically stated as a percentage of the par value and must be paid before any dividends can be distributed to common stockholders. This dividend feature is similar to the fixed interest payments of bonds, providing preferred stockholders with a consistent income stream.
Unlike common stockholders, preferred stockholders do not usually have voting rights. However, they may have certain preferences over common stockholders, such as priority in receiving dividends or in the event of liquidation. Preferred stock can be either cumulative or non-cumulative. In the case of cumulative preferred stock, if the company fails to pay dividends in a given period, the unpaid dividends accumulate and must be paid to preferred stockholders before any dividends can be distributed to common stockholders.
While preferred stock has characteristics of both common stock and bonds, it is important to note that it is still classified as an equity security because it represents ownership in the company. This means that preferred stockholders may benefit from the company's growth through appreciation in stock price. Additionally, some preferred stocks may have features that allow conversion into common stock, giving shareholders the opportunity to participate in the company's potential upside.
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Required information Problem 12-3A (Algo) Allocating partnership income LO P2 [The following information applies to the questions displayed below. Ries, Bax, and Thomas invested $34,000,$50,000, and $58,000, respectively, in a partnership. Dur year, the firm earned $356,400. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to $356,400 net income under each of the following separate assumptions. Problem 12-3A (Algo) Part 2 2. The partners agreed to share income and loss in the ratio of their beginning capital investments. Complete this question by entering your answers in the tabs below. Allocate $356,400 net income in the ratio of their beginning capital investments. (Do not round intermediate calcul Round final answers to the nearest whole dollar.)
Ries would be credited the net income of $85,351, Bax would be credited $125,158, and Thomas would be credited $145,891.
The net income of $356,400 will be allocated among the partners in proportion to their beginning capital investments. Ries, Bax, and Thomas invested $34,000, $50,000, and $58,000, respectively, in the partnership. The allocation of net income will be based on these ratios.
To allocate the net income in the ratio of their beginning capital investments, we need to determine the total capital investment in the partnership. The total capital investment is calculated by summing up the individual capital investments of each partner: $34,000 + $50,000 + $58,000 = $142,000.
Next, we calculate the ratio for each partner by dividing their individual capital investment by the total capital investment:
- Ries: $34,000 / $142,000 = 0.2394 (rounded to four decimal places)
- Bax: $50,000 / $142,000 = 0.3521 (rounded to four decimal places)
- Thomas: $58,000 / $142,000 = 0.4085 (rounded to four decimal places)
These ratios represent the proportion of the net income that each partner is entitled to receive. To allocate the net income of $356,400, we multiply each partner's ratio by the total net income:
- Ries: 0.2394 x $356,400 = $85,351 (rounded to the nearest whole dollar)
- Bax: 0.3521 x $356,400 = $125,158 (rounded to the nearest whole dollar)
- Thomas: 0.4085 x $356,400 = $145,891 (rounded to the nearest whole dollar)
Therefore, the entry to close the firm's Income Summary account would include a debit to Income Summary for $356,400 and a credit to each partner's capital account based on their allocated share of the net income.
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On January 1, 2022, Pharoah Corporation had the following stockholders' equity accounts. During the year, the following transactions occurred. Feb. 1 Declared a $2 cash dividend per share to stockholders of record on February 15, payable March 1. Mar. 1 Paid the dividend declared in February. Apr-1 Announced a 2-for-1 stocksplit. Prior to the split, the narket price per share was $39. July 1. Declared a 15\% stock dividend to stockholders of record on July 15 , distributable July 31. On July 1 . the market price of the stork was $14 per share. 31 ksued the shares for the stock dividend. July 1 Declared a 15% stock dividend to stockholders of record on July 15 , distributable July 31 . On July 1 , the market price of the stock was $14 per share. 31 Issued the shares for the stock dividend. Dec. 1 Declared a $0.60 per share dividend to stockholders of record on December 15, payable January 5,2023. 31 Determined that net income for the year was $327,000. (a) Journalize the transactions and the closing entries for net income and dividends. (Credit account titles are automatically indented when amount is entered.
To journalize the transactions and closing entries for net income and dividends, we need to record each transaction and prepare the necessary closing entries.
Here's the journal entry for each transaction:
January 1, 2022 (Beginning Stockholders' Equity):
No journal entry required.
February 1:
Cash Dividends Declared:
Date Account Debit Credit
2022-Feb-1 Retained Earnings - 2,000,000
Dividends Payable 2,000,000
(To record the declaration of cash dividends)
March 1:
Cash Dividends Paid:
Date Account Debit Credit
2022-Mar-1 Dividends Payable 2,000,000 -
Cash 2,000,000
(To record the payment of cash dividends)
April 1:
Stock Split:
Date Account Debit Credit
2022-Apr-1 Common Stock ($39) - 6,000,000
Additional Paid-in Capital 6,000,000
(To record the 2-for-1 stock split)
July 1:
Stock Dividend Declared:
Date Account Debit Credit
2022-Jul-1 Retained Earnings - 2,100,000
Common Stock Dividend Distributable 1,400,000
Additional Paid-in Capital - 700,000
(To record the declaration of a 15% stock dividend)
July 31:
Stock Dividend Issued:
Date Account Debit Credit
2022-Jul-31 Common Stock Dividend Distributable 1,400,000
Common Stock ($14) 1,400,000
(To record the issuance of stock dividend)
December 1:
Cash Dividends Declared:
Date Account Debit Credit
2022-Dec-1 Retained Earnings - 393,600
Dividends Payable 393,600
(To record the declaration of cash dividends)
December 31 (Closing Entries):
Net Income:
Date Account Debit Credit
2022-Dec-31 Retained Earnings 327,000 -
Income Summary 327,000
(To close net income to retained earnings)
Dividends:
Date Account Debit Credit
2022-Dec-31 Dividends Payable 393,600 -
Retained Earnings 393,600
(To close dividends to retained earnings)
These journal entries record the transactions and closing entries for net income and dividends. Please note that the amounts mentioned are hypothetical and should be adjusted based on the actual financial data of Pharoah Corporation.
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on business social media, business professionals are likely to be regarded as self-promoters if they ______ the skills and interests they possess.
On business social media, business professionals are likely to be regarded as self-promoters if they excessively or overtly promote the skills and interests they possess.
This can include continuously highlighting their achievements, capabilities, or expertise in a way that appears self-centered or attention-seeking.
It's important to strike a balance between showcasing one's skills and sharing valuable content with others on the platform. Building meaningful connections, engaging in conversations, and providing useful insights or resources can help establish a positive professional image without coming across as a self-promoter.
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Singapore is the second busiest container port in the world handling 37.5 million TEUs in 2021 with containerised cargo accounting for 60.7% of total cargo processed (source: Maritime and Port Authority of Singapore, 2022). The importance of the container port industry is underscored by continuous expansion of port capacity to accommodate traffic growth. Towards the end of 2021 , Singapore saw the first phase of Tuas Mega Port begin operations. The world's biggest container terminal will be developed in four phases with projected handling capacity of 65 million TEUs by 2040 . In not more than 400 words, illustrate the development of container port supply in Singapore for the period 1972 until 2021 .
The container port supply in Singapore has experienced significant growth and development from 1972 to 2021, with strategic investments in infrastructure, technology, and capacity expansion. The recent commencement of operations at the Tuas Mega Port further strengthens Singapore's position as a global maritime hub.
Singapore's container port industry has undergone continuous expansion and improvements over the years. The country recognized the potential of containerization early on and made significant investments in infrastructure, such as terminals, cranes, and container yards. This proactive approach helped establish Singapore as a key player in the global container shipping industry.
Throughout the decades, Singapore focused on enhancing efficiency and productivity through the implementation of advanced technologies and automation. Computerized systems were introduced for container tracking and management, improving overall supply chain visibility and streamlining cargo handling processes.
Singapore's strategic location along major shipping routes and its connectivity with international markets played a crucial role in attracting major shipping lines and logistics providers. The port's reputation for efficiency and state-of-the-art facilities further solidified its position as a global transshipment hub.
In recent years, Singapore continued to invest in expanding its container port capacity to accommodate larger vessels and higher container volumes. The development of the Tuas Mega Port, with its phased approach and projected handling capacity of 65 million TEUs by 2040, demonstrates Singapore's commitment to further enhancing its capabilities.
Overall, Singapore's container port supply development can be characterized by its proactive and strategic approach, focusing on infrastructure investments, technology adoption, and capacity expansion. These efforts have positioned Singapore as the second busiest container port in the world, with plans for continued growth and maintaining its status as a global maritime hub.
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For this assignment, you are to complete the following advertising scenario. Box-office sensations like Avatar, Harry Potter and the Deathly Hallows, and Spider-Man 3 don't happen by accident. To achieve big screen success, movie advertisers develop integrated brand promotion (IBP) campaigns that communicate unified messages to target audiences using diverse media. Select a film now showing in theaters and identify the various ways the movie is being promoted. What types of advertising and promotion are employed in the campaign? Do the different advertisements have a consistent look, feel, and message? Do the different media vehicles target different demographic groups? Suggest one additional media option that marketers might use to reach the film's target audience.
Format: - 3 pages (maximum) of text, with references (endnotes) on page 4. - 12-point normal font (e.g. Times Roman, not italic or script) - double-spaced - 1 inch margins all around with page numbers - no cover sheet
The promotion of [Film Title] utilizes a comprehensive range of advertising and merchandising strategies, consisting of television advertisements, online marketing, outside marketing, and print media. These techniques correctly talk about a regular appearance, feel, and message, at the same time as concentrating on exclusive demographic groups. The cautioned extra media option of influencer marketing can in addition increase the campaigns attain and effect.
Title: Advertising and Promotion Strategies for [Film Title]
Introduction:
Box-workplace success is predicated heavily on effective advertising and marketing and included emblem promotion (IBP) campaigns. This article explores the promotional strategies employed for the movie [Film Title] currently showing in theaters. It examines the various advertising and advertising techniques utilized, consistency in look, experience, and message across unique classified ads, concentrated on of different demographic companies, and suggests a further media choice to attain the movie's target audience.
Advertising and Promotion Methods:
Television Commercials: [Film Title] is promoted via fascinating tv advertisements that showcase key scenes, spotlight the movie's genre and attraction, and create anticipation amongst viewers.Online Marketing: A comprehensive digital marketing marketing campaign is deployed to attain a much wider target audience. This includes targeted online advertisements on popular websites, social media systems, and video streaming services, as well as engaging content advertising and marketing thru blogs and articles related to the movie.Outdoor Advertising: Billboards, posters, and signage strategically positioned in high-visitors areas contribute to the movie's promotion. Eye-catching visuals and taglines seize interest and generate consciousness.Print Media: Promotional efforts make bigger to newspapers, magazines, and amusement publications. Full-page commercials, exclusive interviews, and characteristic articles assist construct buzz and generate hobby.Consistency in Look, Feel, and Message:
The various classified ads for [Film Title] keep a consistent appearance, feel, and message. The movie's branding factors, together with the emblem, typography, and coloration scheme, are continually incorporated throughout extraordinary media channels. This visible consistency helps set up a robust emblem identification and reinforces the reputation of some of the target markets.
Targeting Different Demographic Groups:
To maximize reach and enchantment to various audiences, [Film Title] employs exclusive media cars that target precise demographic organizations. Television classified ads and outside marketing are powerful in accomplishing a large target audience, including both young and older demographics. Online advertising, especially social media systems, permits unique targeting based totally on personal demographics, interests, and conduct.
Additional Media Option:
To further beautify the attain and engagement with the film's audience, entrepreneurs should do not forget to leverage influencer marketing. Collaborating with famous social media influencers, or bloggers who align with the film's genre and target demographic can efficiently generate buzz, create word-of-mouth promotion, and engage audiences in an authentic and relatable manner.
Conclusion:
The promotion of [Film Title] utilizes a comprehensive range of advertising and merchandising strategies, consisting of television advertisements, online marketing, outside marketing, and print media. These techniques correctly talk about a regular appearance, feel, and message, at the same time as concentrating on exclusive demographic groups. The cautioned extra media option of influencer marketing can in addition increase the campaigns attain and effect.
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Analyze three different types of children’s vaccinations in terms of the economic cost to the United States, Hepatitis, Tuberculosis, and polio. Based on your analysis, recommend at least three measures to better disseminate vaccinations to the public and provide a rationale for your recommendations.
To disseminate children's vaccinations effectively and minimize economic costs, increase public awareness, improve accessibility, and implement mandatory vaccination policies.
Why are the economic costs of Hepatitis, Tuberculosis, and polio vaccinations in the United States different?The economic cost of each vaccination type varies based on factors such as research and development, production, distribution, and administration. Hepatitis vaccines are relatively cost-effective, with a high return on investment due to the potential medical expenses saved by preventing chronic liver disease.
Tuberculosis vaccinations involve significant costs for diagnosing, treating, and preventing the disease, but they are still considered cost-effective compared to the long-term healthcare costs associated with tuberculosis infection. Polio vaccinations are crucial in eradicating the disease, and while the economic cost may be high initially, it is outweighed by the long-term savings from avoiding the medical and societal burdens of polio outbreaks.
To enhance vaccination dissemination, three measures can be implemented. Firstly, increasing public awareness through education campaigns is vital to address misconceptions, provide accurate information, and emphasize the importance of vaccinations. Secondly, improving accessibility by setting up mobile vaccination units in underserved areas or organizing vaccination drives in community centers can ensure easier access for vulnerable populations. Lastly, implementing mandatory vaccination policies for school enrollment can help increase vaccination rates and protect children from preventable diseases while fostering a culture of vaccination.
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Case Study:
Martin is looking for an investment which will mature in five years and plans to use the amount to finance his daughter’s university education. He estimates he will need $500,000 in expenses at that time for his daughter’s education expenses. His financial advisor presents him with a 5- year structured deposit A. It will earn 1% per annum for the first two years, stepping up to 2% in the 3rd year and 3% in the last 2 years.
Question (Ci) :
You are considering an alternative investment C which is a 5-year annuity of $105,000 each year with an interest rate of 2.5% per annum. How much will this investment cost today? If the annual cash flows of $105,000 are reinvested each year at 2.5%, will this be enough to fund Martin’s daughter’s education in 5 years’ time?
Question (Cii) :
If Martin can choose the amount to receive every year such that he will have exactly $500,000 at the end of 5 years, how much would he need to set aside today to invest in C? How much would the annual payment be in this case?
In the case study, Martin is considering investment option C, which is a 5-year annuity of $105,000 each year with an interest rate of 2.5% per annum. To calculate the cost of this investment today, we can use the present value of an annuity formula.
Therefore, the cost of this investment today would be approximately $437,846.67.To determine if the annuity will be enough to fund Martin's daughter's education in 5 years' time, we need to calculate the future value of the annuity. Using the future value of an annuity formula, we can calculate: Since the future value of the annuity is greater than Martin's estimated education expenses of $500,000, the annuity will be enough to fund his daughter's education. To calculate the cost of this investment today, we can use the present value of an annuity formula. which is a 5-year annuity of $105,000 each year with an interest rate of 2.5% per annum.
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Cunning, a 66-year-old senior and Bunning half her age, are in partnership operating under the name BunnCunn Choices. You have been tasked with the job of preparing and filing their tax returns with the relevant tax authority for 2021. You have been presented with the following Trial Balance along with the attached notes.
1. Building was purchased in 2020 and annual depreciation is charged at 5% per annum.
2. Bunning is a salaried partner who does not share in profits. Included in salaries is $3m paid to him for the year.
3. The amount for Bad debts is estimated based on debtors balance
4. Breakdown for Donations reflect $80,000 to UTECH and $10,000 to an unregistered football club unknown to TAJ, the balance was to TAJ’s approved clubs.
5. Travelling expenses relate to costs incurred in travelling by Partner Bunning to negotiate a critical business deal. However, he used the opportunity to take his wife on the trip as a treat for her birthday. Costs relating to having his wife on the trip is $40,000.
6. Estimated tax payment for 2021 of $100,000 was paid by Cunning from personal funds
7. 50% of amounts paid for legal fees relate to cost of protecting the business reputation, the other 5% was for cost in acquiring fixed assets.
Note: Assume NIS rate of 3% and ceiling of J$3m throughout the year 2021.
BunnCunn Choices
Trial Balance
Year ended December 31, 2021
DescriptionDebitCredit
Land2,500,000
Industrial Building8,000,000
Accumulated Depreciation - Building800,000
Motor Vehicle (purchased in 2021)2,000,000
Accumulated Depreciation - Motor Vehicle400,000
Capital: Cunning3,000,000
Capital: Bunning2,000,000
Drawings for Bunning34,000
Debtors330,000
Creditors1,355,000
Loan2,100,000
Sales20,000,000
Purchases8,000,000
Salaries6,400,000
Legal Fees450,000
Depreciation800,000
Donations120,000
Bad Debts33,000
Travelling300,000
Loan Interest 133,000
Utilities375,000
Rent180,000
TOTAL29,655,000 29,655,000
Required
Prepare the Accounting Profit Statement along with the Profit Adjustment Statement for the
Partnership for 2021 and write brief notes to the partners explaining the reason(s) for differences
in each of the items included in both statements for taxation purposes.
To prepare the Accounting Profit Statement and Profit Adjustment Statement for BunnCunn Choices for the year 2021, we need to analyze the trial balance and make necessary adjustments for tax purposes.
The adjustments include depreciation, salaries, bad debts, donations, traveling expenses, estimated tax payment, and legal fees. These adjustments will result in the final profit figures for taxation purpose.
Depreciation: Calculate the depreciation expense for the building and motor vehicle based on the respective rates and deduct them from the trial balance amounts.
Salaries: Exclude the $3 million paid to Bunning from the salaries expense since he does not share in profits.
Bad debts: Estimate the bad debts based on the debtors' balance and deduct it from the trial balance.
Donations: Adjust the donations to exclude the $10,000 given to the unregistered football club, as it is not tax-deductible.
Traveling expenses: Adjust the traveling expenses to exclude the $40,000 cost related to Bunning's wife, as it is not a legitimate business expense. Estimated tax payment: Deduct the estimated tax payment of $100,000 made by Cunning from personal funds.
Legal fees: Allocate 50% of the legal fees to the cost of protecting the business reputation and include the remaining 5% as a cost of acquiring fixed assets.
After making these adjustments, calculate the net profit and prepare the Accounting Profit Statement. The Profit Adjustment Statement will explain the differences between the Accounting Profit Statement and taxable profit, providing the reasoning for each adjustment made.
Note: Ensure to consider any applicable tax regulations and guidelines specific to the jurisdiction in which BunnCunn Choices operates to accurately determine the taxable profit.
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Chantel Samuel is a 24-year-old female who is unmarried. She currently resides in Johannesburg South Africa and began working on the 1st of August 2019.During the current year she had earned a salary of R230 000 and interest on her fixed deposit of R29 800 . She belongs to a medical aid fund to which she contributed R5 000 for the full current year of assessment, her employer also contributed R5 000 for the period during which she was employed. Chantel also made retirement fund contributions of R3 500 for the current year of assessment. A few years ago, she had inherited a beautiful house, situated in Cape Town, from her grandfather which she rents out and during the year she received a rental amount of R240 000 for the year of assessment, and she had incurred maintenance expenses of R210 000 which are taxdeductible. Chantel had incurred medical expenses of R1 600 for the year and this was not covered by her medical aid. Her employer had made a deduction of R27 829 for employee's tax and Chantel made a provisional payment of R18 200 for the 2022 year of assessment. REQUIRED:
Chantel Samuel is a 24-year-old female who is unmarried. She currently resides in Johannesburg South Africa and began working on the 1st of August 2019. She had earned a salary of R230 000 and interest on her fixed deposit of R29 800.
She belongs to a medical aid fund to which she contributed R5 000 for the full current year of assessment, her employer also contributed R5 000 for the period during which she was employed. Chantel also made retirement fund contributions of R3 500 for the current year of assessment. A few years ago, she had inherited a beautiful house, situated in Cape Town, from her grandfather which she rents out. During the year, she received a rental amount of R240 000 for the year of assessment, and she had incurred maintenance expenses of R210 000 which are tax-deductible.
Chantel had incurred medical expenses of R1 600 for the year and this was not covered by her medical aid. Her employer had made a deduction of R27 829 for employee's tax and Chantel made a provisional payment of R18 200 for the 2022 year of assessment.In the case of Chantel Samuel, she earns a salary of R230 000 from her employer. This is the total salary that she earned during the year and it is included in her taxable income. Besides the salary, Chantel also earned an interest income of R29 800 from her fixed deposit account. The interest income is also included in her taxable income.
Chantel is also a member of a medical aid fund, and she contributed R5 000 for the full year towards the fund. Her employer also contributed R5 000 for the period she was employed. She made retirement fund contributions of R3 500, which are tax-deductible, during the current year of assessment.Chantel Samuel inherited a house from her grandfather that is situated in Cape Town, which she rents out. She earned rental income of R240 000 for the year of assessment. She also incurred maintenance expenses of R210 000 for the property, which is tax-deductible.
Thus, Chantel's taxable rental income is R240 000 - R210 000 = R30 000.
She had incurred medical expenses of R1 600 that was not covered by her medical aid.In conclusion, the taxable income of Chantel Samuel would be calculated as follows:Salary: R230 000 Interest income: R29 800Rental income: R30 000
Taxable income = R230 000 + R29 800 + R30 000 = R289 800Thus, her total taxable income for the year is R289 800.
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SmartTech Bank's balance sheet shows the following composition of its assets: Cash Reserves: 15%, Loans: 85%. If the bank liquidates its loans today, it receives $80 per $100 of face value, and liquidation at the end of three months will produce $93 per $100 of face value. What is the 3-month liquidity index for the bank's asset portfolio? (Please put your answer in decimals (not in percentage points) and round your answer to two decimal places.) Answer:
Given, SmartTech Bank's balance sheet shows the following composition of its assets:Cash Reserves: 15%, Loans: 85%.
If the bank liquidates its loans today, it receives $80 per $100 of face value, and liquidation at the end of three months will produce $93 per $100 of face value.To find the 3-month liquidity index for the bank's asset portfolio.The liquidity index is calculated as follows:Liquidity index=(Amount of cash reserves+ Amount of immediate cash inflows)/(Amount of expected cash outflows+ Immediate cash outflows)
On the basis of the above formula, we can write:Amount of immediate cash inflows on liquidation today=$80 × (85/100) = $68Amount of immediate cash inflows on liquidation at the end of three months=$93 × (85/100) = $79.05
Therefore, the liquidity index is:Liquidity index = (0.15 + 68 + 79.05) / (0 + (85 × 0.85)) = 0.9541Hence, the 3-month liquidity index for the bank's asset portfolio is 0.9541.
Therefore, the answer is rounded to two decimal places is 0.95.
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a) Distinguish between research and development (R & D) cost
in the context of IAS38 Intangible Assets.
b) Should we capitalise or expense R&D expenditure?
a) Research costs are expensed as incurred, while development costs can be capitalized if certain criteria are met, according to IAS 38 Intangible Assets.
b) Whether to capitalize or expense R&D expenditure depends on meeting specific criteria outlined in IAS 38, such as technical feasibility, intention to use/sell,and availability of resources.
a) Research and development cost, in the context of IAS 38 Intangible Assets, can be distinguished as follows:
Research Costs: Research costs refer to expenditures incurred to gain new scientific or technical knowledge or understanding. These costs are typically aimed at discovering new ideas, principles, or theories. Research costs are expensed as incurred since they are uncertain in their future economic benefits and do not meet the criteria for recognition as an intangible asset under IAS 38.
Development Costs: Development costs, on the other hand, are expenditures incurred after the research phase. They involve the application of research findings or other knowledge to produce new or significantly improved products, processes, or services.
Development costs can be capitalized if certain criteria are met, including the technical feasibility of completing the intangible asset, the intention to use or sell the asset, the ability to demonstrate future economic benefits, and the availability of resources to complete the asset.
b) Whether to capitalize or expense R&D expenditure depends on the nature of the costs and the stage of development. According to IAS 38, research costs should be expensed as incurred. Development costs, however, can be capitalized if certain criteria are met.
To capitalize R&D expenditure, the following conditions should be satisfied: the technical feasibility of completing the intangible asset, the intention to use or sell the asset, the ability to demonstrate future economic benefits, and the availability of resources to complete the asset. If these criteria are met, development costs can be recognized as an intangible asset and amortized over its useful life.
It's important to note that the distinction between research and development costs is crucial in determining whether the costs should be capitalized or expensed. Careful judgment and evaluation of each cost item in the R&D process are necessary to ensure compliance with IAS 38 and the appropriate recognition and measurement of R&D expenditure.
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Sheridan Company’s sales budget projects unit sales of part 198Z of 8,800 units in January, 10,400 units in February, and 11,600 units in March. Each unit of part 198Z requires 4 pounds of materials, which cost $2 per pound. Sheridan Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2021.
(a)
Prepare a production budget for January and February 2022.
SHERIDAN COMPANY
Production Budget
choose the accounting period
January
February
select an opening production budget item
enter a number of units
enter a number of units
select between addition and deduction
: select an item
enter a number of units enter a number of units
select a summarizing line for the first part
enter a total number of units for the first part
enter a total number of units for the first part
select between addition and deduction
: select a production budget item
enter a number of units enter a number of units
select a closing production budget item
enter a total number of units enter a total number of units
SHERIDAN COMPANY Production Budget January: Beginning Finished Goods Inventory: 20% of February's expected unit sales Add: Unit sales for January Total Units to Produce.
Sum of Beginning Inventory and Unit Sales February: Beginning Finished Goods Inventory: 20% of March's expected unit sales Add: Unit sales for February Total Units to Produce: Sum of Beginning Inventory and Unit Sales Based on the given information, we can calculate the production budget as follows: January: Beginning Finished Goods Inventory: 20% of 10,400 units (February's expected unit sales) = 2,080 units Add: Unit sales for January = 8,800 units Total Units to Produce: 2,080 units + 8,800 units = 10,880 units February: Beginning Finished Goods materials Inventory: 20% of 11,600 units (March's expected unit sales) = 2,320 units Add: Unit sales for February = 10,400 units Total Units to Produce: 2,320 units + 10,400 units = 12,720 units Therefore, the production budget for January 2022 is 10,880 units, and the production budget for February 2022 is 12,720 units.
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1. Describe what a company's cost of goods sold is and where
the value comes from. What is gross profit for a merchandise
company?
2. Explian why use of the perpetual system has grown
dramatically.
1 . The cost of goods sold (COGS) is a financial metric that represents the direct costs incurred by a company in producing or acquiring the goods that it sells to customers. Gross profit for a merchandise company is the revenue generated from the sales of goods minus the cost of goods sold.
2 . The use of the perpetual system has grown dramatically due to its ability to provide real-time inventory tracking, accurate cost of goods sold calculation, enhanced inventory control, and improved efficiency and automation.
COGS includes the cost of raw materials, direct labor, and any overhead costs directly associated with the production process. The value of COGS comes from the actual expenses the company bears to manufacture or purchase the products it sells.
Gross profit for a merchandise company is the revenue generated from the sales of goods minus the cost of goods sold. It is a measure of the profitability of a company's core operations and indicates how efficiently it can produce or acquire products and sell them at a markup.
d. Improved efficiency and automation: The perpetual system integrates with other business systems, such as point-of-sale (POS) systems and enterprise resource planning (ERP) software. This integration streamlines processes, automates inventory updates, and reduces manual data entry. It saves time and reduces the likelihood of human errors associated with manual inventory management.
Therefore, the use of the perpetual system has grown dramatically due to its ability to provide real-time inventory tracking, accurate cost of goods sold calculation, enhanced inventory control, and improved efficiency and automation. These benefits contribute to better decision-making, improved financial reporting, and more effective inventory management for businesses.
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The folllowing information relates to Bronco Inc.:
Net profit margin =15%
Total asset turnover =1.2
Financial leverage ratio =1.3
What is Bronco Inc.'s return on equity (ROE) ?
a 26.2%
b 28.3%
c 23.4%
d 31.2%
Bronco Inc.'s return on equity (ROE) is 23.4%.
This is calculated by multiplying the net profit margin, total asset turnover, and financial leverage ratio. The ROE indicates the company's profitability in relation to its equity investment.
To calculate the return on equity (ROE), we utilize three key financial ratios: net profit margin, total asset turnover, and financial leverage ratio. The net profit margin measures the percentage of each sales dollar that represents profit after deducting expenses. In this case, the net profit margin is 15%. The total asset turnover ratio determines how efficiently a company utilizes its assets to generate sales.
Here, the total asset turnover is 1.2, indicating that each dollar of assets generates $1.2 in sales. The financial leverage ratio reflects the proportion of a company's debt to equity. For Bronco Inc., the financial leverage ratio is 1.3, implying that the company has a slightly higher level of debt relative to equity. Multiplying these three ratios together, we find the ROE to be 23.4%. This means that for each dollar of equity investment, Bronco Inc. generates a return of 23.4 cents in profit.
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