Business High School

Parker Lane Cafe has a quick ratio of 4:1, $160,000 in cash, $380,000 in inventory, and $40,000 in accounts receivable. What are its current liabilities? a. $50,000 b. $580,000 c. $40,000 d. $25,000

Answers

Answer 1

The current liabilities of Parker Lane Cafe are $50,000. The correct answer is option a.

Quick ratio = (Cash + Accounts Receivable) / Current Liabilities

here, quick ratio = 4:1

4 = ($160,000 + $40,000) / Current Liabilities

4 × Current Liabilities = $160,000 + $40,000

4 × Current Liabilities = $200,000

Dividing both sides of the equation by 4

Current Liabilities = $200,000 / 4

Current Liabilities = $50,000

The current liability of the cafe is $50,000. The correct answer is option a.

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Related Questions

In the Solow Model, better ideas will lead to
a. increases in productivity
b. capital accumulation
c. Both an increase in productivity and an increase in capital
d. accumulation

Answers

In Solow Model, the better ideas will lead to both an increase in productivity and an increase in capital. Option C is correct.

In the Solow Model, better ideas will lead to both an increase in productivity and an increase in capital accumulation. The model suggests that technological progress and innovation are drivers of economic growth.

When better ideas are introduced, such as improvements in technology or production techniques, they enhance productivity by enabling the production of more output with the same amount of inputs. This leads to option a, "increases in productivity."

At the same time, these better ideas often require investment in new capital goods to implement them effectively. For instance, adopting advanced machinery or equipment may be necessary to leverage the benefits of technological advancements. This investment in capital goods contributes to the accumulation of capital in the economy.

Hence, C. is the correct option.

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Edward L. Vincent is CFO of Energy Resources, Inc. The company specializes in the exploration and development of natural gas. It's near year-end, and Edward is feeling terrific. Natural gas prices have risen throughout the year, and Energy Resources is set to report record-breaking performance that will greatly exceed analysts' expectations. However, during an executive meeting this morning. management agreed to "tone down" profits due to concerns that reporting excess profits could encourage additional government regulations in the industry, hindering future profitability. 3 At the beginning of the current year, the company purchased equipment for $4,200,000. The company's standard practice for equipment like this is to use straightline depreciation over 12 years using an estimated residual value of $600,000. To address the issue discussed in the meeting. Edward is considering three options. Option 1: Adjust the estimated service life of the equipment from 12 years to 6 years.

Calculate annual depreciation using the company's standard practice.

Answers

Option 1:Adjust the estimated service life of the equipment from 12 years to 6 years. It will lead to an increase in annual depreciation of the equipment and thus, a decrease in the net income of the company.

In such a case, the calculation of annual depreciation using the company's standard practice will change as shown below:Annual Depreciation=(Purchase cost - Residual value) / Useful life=($4,200,000 - $600,000) / 6= $600,000 per year.Energy Resources, Inc., is a company that specializes in the exploration and development of natural gas. At the end of the year, Edward L. Vincent, the company's CFO, feels excellent because the price of natural gas has risen throughout the year, and the company is set to report record-breaking performance that will significantly exceed analysts' expectations.However, during an executive meeting, management agreed to "tone down" profits due to concerns that reporting excess profits could encourage additional government regulations in the industry, which could hinder future profitability. In the current year, the company bought equipment for $4,200,000, and the company's standard practice for equipment like this is to use straight-line depreciation over 12 years, using an estimated residual value of $600,000.Therefore, to address the issue discussed in the meeting, Edward is considering three options. Option 1 involves adjusting the estimated service life of the equipment from 12 years to 6 years. It will lead to an increase in annual depreciation of the equipment and thus, a decrease in the net income of the company

. In conclusion, the adoption of this option can help the company reduce its net income and "tone down" its profits, addressing the management's concerns.

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Using relevant examples from different industries, discuss the factors that complicate the job of international human resource managers.

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International human resource management involves managing human resources in a global business environment.

The job of an international human resource manager is a complex one due to various factors. Below are some of the factors that complicate the job of international human resource managers.

Cultural differences: Different cultures have different ways of doing things, which could affect business operations. An international human resource manager needs to be knowledgeable of the local cultures to manage employees effectively. For example, American businesses may have different approaches to performance management compared to businesses in Japan. Legal and regulatory differences: Different countries have different employment laws and regulations. It's the responsibility of the international human resource manager to ensure the company complies with local employment laws and regulations. For example, the employment laws and regulations in China are different from those in Germany.

Language differences: Communication is critical in international business. An international human resource manager needs to be able to communicate effectively with employees, stakeholders, and customers who speak different languages. For example, if a German company is expanding its operations to Brazil, the human resource manager needs to be able to speak Portuguese to effectively communicate with the employees. Technology differences: Different countries have different technology infrastructures, which could affect the company's operations. For example, if a company operates in a developing country, there may be poor internet connectivity that could affect communication and operations.ConclusionIn summary, international human resource managers need to understand the cultural, legal, linguistic, and technological differences that could complicate their jobs. They must develop strategies to address these challenges to ensure business operations are not affected.

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true or false: the loss sustained crime coverage form will cover a loss which occurred prior to its inception if: (a) reported during the policy term; and (b) there was no interruption between the previous policy term and the current policy.

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The given statement is True. The loss sustained crime coverage form typically covers a loss that occurred prior to its inception if it is reported during the policy term and there was no interruption between the previous policy term and the current policy.

This means that as long as the loss is reported within the policy period and there was continuous coverage without any gaps, the coverage can extend to losses that happened prior to the policy's inception.Firstly, the loss must be reported during the policy term, meaning that the insured must notify the insurance company about the loss within the specified timeframe. Additionally, there should be no interruption or gap in coverage between the previous policy term and the current policy. This means that the insured should have maintained continuous coverage without any breaks or lapses in order for the policy to cover losses that occurred prior to its inception. It is important to carefully review the specific terms and conditions of the policy to understand the coverage provided.

Therefore, the given statement is true. The loss sustained crime coverage form is designed to provide coverage for losses that occurred prior to the policy's inception, as long as certain conditions are met.

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How to reduce income tax? Check all applicable answers. Open a health Savings Account Contribute to a Roth retirement account Do a side gig or a freelance job Get a higher education credit on your college expenses Claim European travel expenses on your home business selling cookies and juices to local scools. Contribute to a Traditonal retirement account

Answers

There are several ways that can be used to reduce the amount of income tax you pay. The most common strategies are:Contributing to a Traditional retirement account.Opening a health savings account.Contributing to a Roth retirement account.Doing a side gig or freelance job.Claiming European travel expenses on your home business.

Several methods for reducing your income tax bill are described in more detail below:Contributing to a Traditional retirement account:

A Traditional IRA or 401(k) is a pre-tax retirement account. Any amount contributed to the account is tax-deductible, and it reduces your taxable income for the year. Contributions are taxed when they are withdrawn from the account.Opening a health savings account:

A health savings account, or HSA, is a tax-advantaged savings account. It is used in combination with a high-deductible health insurance plan. Money deposited in an HSA is tax-deductible, and any interest or gains are tax-free. Withdrawals for medical expenses are also tax-free.Contributing to a Roth retirement account:

A Roth IRA or 401(k) is an after-tax retirement account. Contributions are made with money that has already been taxed. However, withdrawals are tax-free.Doing a side gig or freelance job:

Working a side gig or freelance job can help you earn extra income. These jobs often provide tax benefits, such as the ability to deduct expenses related to your work.

Additionally, self-employed individuals may qualify for certain tax credits.Claiming European travel expenses on your home business:

If you sell cookies and juices to local schools, you may be able to claim European travel expenses as a business deduction. However, this strategy may be risky, as it could be subject to scrutiny by the IRS.Getting a higher education credit on your college expenses:

If you pay college tuition for yourself or a dependent, you may be eligible for a tax credit. The American Opportunity Tax Credit and the Lifetime Learning Credit are two tax credits that are available to eligible individuals.

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6 9 12 ! What is the unifying force of quality? Customer satisfaction Leadership Training Organizational culture
Light bulb L50 (minimum length of time until 50% of the bulbs are burned out and 50% a

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1- The unifying force of quality is D) Organizational culture.

2- The quality "dimension" indicated by the light bulb L50 (minimum length of time until 50% of the bulbs are burned out and 50% are still operating) is B) Durability.

1- Organizational culture is the underlying values, beliefs, and behaviors that guide the actions of individuals within an organization. It serves as a unifying force that shapes and influences how quality is perceived and pursued throughout the organization. A strong organizational culture that emphasizes and prioritizes quality can have a significant impact on various aspects of the organization, such as customer satisfaction, leadership, and training.

By fostering a culture that values quality, organizations can create an environment where employees are motivated to deliver high-quality products or services, customer satisfaction is prioritized, and leaders actively support and promote quality initiatives. Thus, organizational culture acts as the unifying force that aligns and integrates different aspects of quality within an organization.

2-Durability refers to the ability of a product to withstand wear, pressure, or damage over time. The light bulb L50, which measures the minimum length of time until 50% of the bulbs are burned out and 50% are still operating, is an indication of the durability of the light bulbs. It shows how long the bulbs can continue to function without burning out or failing. This dimension is specifically related to the longevity and reliability of the light bulbs

. By measuring the L50 value, manufacturers and consumers can assess the durability and expected lifespan of the light bulbs. Therefore, the quality dimension indicated by the light bulb L50 is Durability.

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the complete question is:

1-What is the unifying force of quality?

A- Customer satisfaction

b-Leadership:

c- Training

D- Organizational culture

2-Light bulb L50 (minimum length of time until 50% of the bulbs are burned out and 50% are still operating) is an indication of this quality "dimension"

a) Serviceability

b) Durability

C)Reliability

d) Performance

According to Keynes, as income increases consumption expenditure also increases but increase in consumption is_______than the increase in income.
Smaller
Larger
Equal
Constant

Answers

According to John Maynard Keynes, as income rises, consumption expenditure also rises but the increase in consumption is equal to the increase in income. Let's understand the concept of consumption and income below.

In economics, consumption is defined as the acquisition of goods and services by individuals or households for their satisfaction. It is the total spending by individuals on their needs or wants.

Income is the amount of money that an individual receives during a specific period, usually measured in a month or year. It includes the wages, salaries, and other earnings from work as well as income from investments.

Keynes' theory of consumption: Keynes proposed a theory of consumption that is based on marginal propensity to consume. According to him, people do not consume their entire income but rather a part of it.

He believed that there is a positive relationship between income and consumption expenditure but it is not a 1:1 ratio. Keynes further argued that as income increases, consumption expenditure also increases, but the increase in consumption is less than the increase in income.

This is because people tend to save a portion of their income. The marginal propensity to consume decreases as income rises. In simple words, the more a person earns, the less they spend. Hence, the increase in consumption is equal to the increase in income.

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O t 3 ences Following is the cost information for Camp Rainbow's operations last summer: Week 1 5677AWN7 2 3 4 8 Number of Cost to Run Camp $8,050 8,460 10,900 11,100 Campers 90 118 156 174 188 184 17

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Camp Rainbow's total fixed operating costs are $2,862.80 and the variable operating cost per child is $57.35.

What are total fixed operating costs and variable operating cost per child?

The highest level of activity is Week 5 with 188 campers.

The lowest level of activity is Week 1 with 90 campers.

Variable cost per child = (Cost to Run at Highest Activity Level - Cost to Run at Lowest Activity Level) / (Number of Campers at Highest Activity Level - Number of Campers at Lowest Activity Level)

Variable cost per child = ($13,670 - $8,050) / (188 - 90)

Variable cost per child = $5,620 / 98

Variable cost per child ≈ $57.35

Fixed cost = Cost to Run at Highest Activity Level - (Variable cost per child × Number of Campers at Highest Activity Level)

Fixed cost = $13,670 - ($57.35 × 188)

Fixed cost ≈ $2,862.80.

Full question:

Following is the cost information for Camp Rainbow's operations last summer:

Week Number of Cost to Run

Campers Camp

1 90 $8,050

2 118 8,460

3 156 10,900

4 174 11,100

5 188 13,670

6 184 14,300

7 170 12,325

8 156 11,270

Required: Using the high-low method, calculate Camp Rainbow's total fixed operating costs and variable operating cost per child.

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Based on systems theory, the types of practices the coaching team runs is a transformational process.

Systems theory is a transdisciplinary study that examines the nature of complex systems. It is an alternative paradigm to reductionism, which is concerned with identifying the components and elements that make up a system and how they interact. Instead, systems theory examines how components function and interact within a larger context or environment.System theory can be applied to a wide range of fields, including biology, psychology, engineering, and business. It can be used to analyze the interactions between individuals, groups, organizations, and entire societies.Types of practices the coaching team runsThe types of practices the coaching team runs is a transformational process. Transformational coaching is a process in which the coach and client work together to achieve a goal. It is a process that is focused on change and growth. Transformational coaching can be used in a variety of settings, including business, education, and personal development.In transformational coaching, the coach and client work together to identify the client's goals and develop a plan to achieve them. The coach provides guidance and support throughout the process, helping the client to overcome obstacles and stay on track. Through this process, the client develops the skills and knowledge necessary to achieve their goals.

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Long-term forecasts are usually less accurate than short-term forecasts because
A) short-term forecasts have a larger standard deviation of error relative to the mean than long-term forecasts.
B) short-term forecasts have more standard deviation of error relative to the mean than long-term forecasts.
C) long-term forecasts have a smaller standard deviation of error relative to the mean than short-term forecasts.
D) long-term forecasts have a larger standard deviation of error relative to the mean than short-term forecasts.
E) none of the above

Answers

The correct answer is D) long-term forecasts have a larger standard deviation of error relative to the mean than short-term forecasts.

Long-term forecasts tend to be less accurate than short-term forecasts because they are subject to more uncertainties and variables over a longer time horizon. Factors such as changes in market conditions, technological advancements, and economic fluctuations become more difficult to predict accurately over extended periods. These uncertainties contribute to a larger standard deviation of error in long-term forecasts compared to short-term forecasts, where the impact of these factors is generally more limited.

Short-term forecasts benefit from having a more immediate and clearer understanding of current conditions, making it easier to make accurate predictions within a shorter time frame. The shorter time horizon allows for a better estimation of variables and reduces the potential impact of unforeseen events or changes in circumstances.

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Q.2 Amjad rising Inc, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider mode, but also makes custom designed paragliders. Management has designe

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The overall profitability of Blue Sky Outfitters is Rs. 130,332. Activity Based Costing (ABC) is a costing approach that assigns the costs of the resources used in the production of products to the individual products. The primary aim of ABC is to determine the profitability of products more accurately. Profitability is the ability of a company to generate profit. It is determined by comparing a company's earnings to its expenses. A company is profitable when its earnings are higher than its expenses.

Computation of profitability: Standard Model: Activity Rate Total Cost of Activity Total Activity used Total Cost of Activity Number of gliders Number of direct labor hours per glider Direct Material Cost per glider Direct labor cost per glider Direct labor cost per unit Selling price per unit Profitability Per unit profitability Rs. 20 per glider 20 x 200 = 4000 4000/200 = Rs. 203 hrs x 19.5 = Rs. 58.550.5 x 19.5 = Rs. 9.758.5 + 564 + 634 = Rs. 1,206 1850 - 1206 = Rs. 644 644 x 200 = Rs. 128,800 Total profitability= Rs. 128,800

Custom Design: Activity Rate Total Cost of Activity Total Activity used Total Cost of Activity Number of orders Number of Custom designs Direct Labor hours per glider Direct Material Cost per glider Direct labor cost per glider Direct labor cost per unit Selling price per unit Profitability Per unit profitability Rs. 1 per order 1 x 2000 = 2000 2000/20 = Rs. 100 3 x 200 = Rs. 600 3 x 200 = Rs. 19.56 x 19.5 = Rs. 1173 + 634 + 117 = Rs. 868 2400 - 868 = Rs. 1532 Total profitability = Rs. 1532

Overall profitability: Standard Model = Rs. 128,800 Custom Design = Rs. 1532 Total profitability = Rs. 130,332. Hence, the overall profitability of Blue Sky Outfitters is Rs. 130,332.

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Which of the following is an example of a major external environmental factor that a company must consider when analyzing the international marketing environment?
a. economic factors
b. product factors
c. promotional factors
d. pricing factors
e. advertising factors

Answers

Economic factors is an example of a major external environmental factor that a company must consider when analyzing the international marketing environment. Option(a) economic factors.

The international marketing environment is made up of a range of elements, such as economic, political, legal, sociocultural, and technological factors that can have a significant impact on the marketing practices of firms when they expand internationally.

The external environmental factors that affect a company's marketing activities are broken down into two categories: uncontrollable and controllable. The uncontrollable environmental factors are those that a firm has no control over and must adapt to them. The controllable environmental factors are those that the firm can control or change to some extent.

For example, uncontrollable factors include political, legal, social, and economic factors. Controllable factors, on the other hand, include product, price, promotion, and distribution factors. The economic factor, therefore, is an example of a major external environmental factor that a company must consider when analyzing the international marketing environment.

Therefore, economic factors Option(a) play a vital role in shaping a company's international marketing approach.

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Assume taxes are zero and the consumption function is C = 0.90(Y) + $300. Based on this information, the saving function is S= (Yd) - $

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To determine the saving function based on the given information, we need to start by defining the terms.

C = Consumption

Y = Total income (or output)

Yd = Disposable income (income after taxes)

S = Saving

The consumption function is given as C = 0.90(Y) + $300.

To find the saving function, we need to subtract consumption (C) from disposable income (Yd), as saving is the difference between income and consumption. S = Yd - C

Since taxes are assumed to be zero, disposable income (Yd) is equal to total income (Y). Substituting this into the equation, we have: S = Y - C

Now we substitute the given consumption function into the equation:

S = Y - (0.90(Y) + $300)

Simplifying the equation, we have:S = Y - 0.90Y - $300

Combining like terms, we get:S = 0.10Y - $300

Therefore, the saving function based on the given information is: S = 0.10Y - $300

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You are having a discussion on short-term securities with your grandpa. Your grandpa states that ‘Since bank bills are instruments that typically have a maximum maturity of 180 days, they are of no use in meeting funding requirements for longer than 180 days.’ Critically analyse and discuss this statement.
The company ALTA Ltd issued a bank accepted bill to fund its working capital requirement. The bill is issued for 60 days, with a face value of $150,000 and a yield of 2.5% per annum to the original discounter. After 25 days, the bank bill is sold by the original discounter into the secondary market for $138,222. The purchaser holds the bill to maturity. What is the yield received by the holder of the bill at the date of maturity?
The Atony Ltd. company raised $1.5m through a 10-year bond issue on the 31st of December 2020. The bond pays 3.4% per annum in coupons, with coupons paid quarterly. Calculate the price of the bond on the 12th of August 2025, given a market yield of 4.5% per annum. In your answer, identify whether the bond is trading at a discount or a premium, and explain the logic as to why this is the case. Note: You can write down the calculations by hand and attach a photo of your answer in the answer sheet.

Answers

It should be noted that the yield received by the holder of the bank bill at maturity is approximately 21.4%.

How to calculate the value

Amount paid by the original discounter: $138,222

Face value received by the purchaser at maturity: $150,000

Holding period: 60 days - 25 days = 35 days

The yield can be calculated using the formula:

Yield = (Face Value - Purchase Price) / (Purchase Price) * (365 / Holding Period)

Yield = ($150,000 - $138,222) / ($138,222) * (365 / 35)

Yield ≈ 0.214 or 21.4%

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Which of the following refers to a problem that firms with structurally sophisticated global networks are most likely to face? A) environmental volatility B) competition from domestic firms C) low cost savings D) import tariffs

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Environmental Volatility refers to a problem that firms with structurally sophisticated global networks. Option A is the correct answer.

Significant environmental problems and sustainability difficulties have an impact on businesses. A company's bottom line is impacted by climate change, pollution, and global warming since these major environmental challenges have a negative influence on revenue and employee productivity. Option A is the correct answer.

Important sustainability issues that have an impact on the entire planet are currently being faced. We can't effectively address environmental problems on our own. Businesses, on the other hand, are more equipped than individuals to create real change. This is why sustainable business practices are the most efficient means of bringing about long-term change that is advantageous to both firms and customers worldwide.

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Jun1, 2020 Business paid $800 cash for the monthly rent. Please show which of the following entries is right
A. Dr. Unearned Revenue; Cr. Cash
B. Dr. Rent Expense; Cr. Cash
C. Dr. Accounts Payable; Cr. Cash
D. Dr. Prepaid Rent; Cr. Cash

Answers

If Jun1, 2020 Business paid $800 cash for the monthly rent. The correct entry for the transaction would be Dr. Rent Expense; Cr. Cash. The correct option is B.

It is correct to enter the transaction as Dr. Rent Expense; Cr. Cash. The accrual accounting principle dictates that expenses be recorded as they are incurred in this entry.

The business registers the expense for the monthly rent payment by debiting Rent Expense. The net income will be decreased by this expense, which will be shown on the income statement.

The company reflects the reduction in its cash balance brought on by the payment of rent by crediting Cash. The balance sheet shows this decline in cash which has an effect on the company's liquidity. The correct option is B.

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Despite grappling with severe shortages in food and medicines amid the debilitating coronavirus pandemic, the Communist-nun island nation of Cuba plans to develop and export its own Covid-19 vaccines by the end of the year. So far, the country has announced five coronavirus vaccine candidates, two of which (Soberana 2, Abdala) are in their final phase 3 trials. Last month, researchers at the Finlay Institute in Havana announced that their Soberana 2 vacoge appears to be highly effective and is entering the final stage of clinical trials. Cuba plans to develop and export its own Covid-19 vaccines by the end of the year Prime Minister of India has appointed you as the chairperson to study the above mentioned vaccines and provide him with recommendation on whether to procure these vaccines, if so how many and by when He has given complete freedom to you to from your own group/team. In this context briefly answer the following

a. Would you use group or team? Provide appropriate justification for your answer
b. What is the purpose of the group/team?
c. Which type of group/team you will form and why?

Answers

For studying the vaccines and providing recommendations on whether to procure these vaccines, if so how many and by when, a team should be formed.

a) This is because a team is a group of people working together towards a common goal or objective that requires collective effort. In this case, the goal is to study the vaccines and provide recommendations, which requires a collaborative effort among members. Thus, forming a team would be more appropriate.

b)The purpose of the team is to study the vaccines and provide recommendations on whether to procure these vaccines, if so how many and by when.

c)I will form a cross-functional team for studying the vaccines and providing recommendations. This is because cross-functional teams are composed of individuals from different functional areas who work together to achieve a common goal. In this case, the goal is to study the vaccines and provide recommendations on whether to procure these vaccines, if so how many and by when. Since the team members come from different backgrounds and bring diverse perspectives and expertise, they are better equipped to handle complex problems and make informed decisions. Therefore, forming a cross-functional team would be more appropriate.

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Assume that sales are expected to increase by 4% next year, core profit margin is expected to be 12% of sales, and current NOA is expected to grow at the same growth rate of sales. If the required return on operations is 8%, current sales are $898664, current NOA is $387094, what is the expected ReOI for the coming year?

Answers

Given information are as follows Current sales, Sales are expected to increase by 4%, core profit margin is expected to be 12% of sales, the current NOA is expected to grow at the same growth rate of sales, and required return on operations is 8%.

Now, we need to determine the expected Re OI for the coming year. We can start solving the problem by finding the expected NOA for the coming year. The formula to calculate the expected NOA is; Expected

NOA = Current NOA x (1+sales growth rate)

Expected NOA = $387,094 x (1+4%)

Expected NOA = $402,697

Next, we can find the expected sales for the coming year.

The formula to calculate the expected sales is;

Expected Sales = Current Sales x (1+sales growth rate)

Expected Sales = $898,664 x (1+4%)

Expected Sales = $933,396

Now, we can find the expected Re

OI for the coming year using the following formula;

Expected ReOI = (Expected Sales - Expected Operating Expenses) x (1 - Tax Rate) - Expected Required Return on Operations

We can find the expected operating expenses by multiplying the expected sales by the expected cost of goods sold. The expected cost of goods sold is

Expected Cost of Goods Sold = Expected Sales x (1 - Core Profit Margin)

Expected Cost of Goods Sold = $933,396 x (1 - 12%)

Expected Cost of Goods Sold = $819,609

We can now find the expected Re OI by using the following formula

Expected Re OI = ($933,396 - $819,609) x (1 - 35%) - 8%

Expected Re OI = $96,416 x 0.65 - 8%

Expected Re OI = $60,501.6 - 8%

Expected Re OI = $55,701.52

Therefore, the expected Re OI for the coming year is $55,701.52.

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Use the following information for the Problems below. (Static) [The following information applies to the questions displayed below.] The following year-end information is taken from the December 31 ad

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Here is the schedule of cost of goods manufactured and income statement for Leone Company:

The Cost of Goods

**Schedule of Cost of Goods Manufactured**

For the Year Ended December 31, 2023

Direct materials:

* Raw materials inventory, beginning $166,850

* Raw materials purchases $925,000

* Less: Raw materials inventory, ending $182,000

= $837,850

Direct labor $675,480

Indirect labor $159,475

Factory overhead:

* Depreciation expense—Factory equipment $49,325

* Maintenance expense—Factory equipment $35,400

* Factory utilities $33,000

= $127,150

Total manufacturing costs $1,819,855

Add: Beginning work in process inventory $15,700

Less: Ending work in process inventory $19,380

Cost of goods manufactured $1,805,775

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Income Statement

For the Year Ended December 31, 2023

Sales $4,462,500

Cost of goods sold:

Finished goods inventory, beginning $167,350

Cost of goods manufactured $1,805,775

Less: Finished goods inventory, ending $136,490 = $3,662,635

Gross profit $800,865

Operating expenses:

Selling expenses:

Advertising expense $28,750

Sales salaries expense $392,560

Rent expense—Selling space $26,100 = $447,410

Administrative expenses:

Office salaries expense $63,000

Depreciation expense—Office equipment $7,250

Rent expense—Office space $22,000 = $92,250

Total operating expenses $539,660

Net income $261,195

Answers

The bond is trading at a premium. The yield to maturity on a $1,000 face value bond is 3.5%, which means that the bond is offering a lower yield compared to the market rate.

Given that the bond has a coupon rate of 4% and a face value of $1,000, it pays annual coupons of $35 ($1,000 * 4%). However, since the bond is trading at $1,037, which is above its face value, it is trading at a premium.

This means that investors are willing to pay more than the face value of the bond to receive the fixed coupon payments and the return of the face value at maturity. The premium reflects the higher demand for the bond and the lower yield it provides compared to the prevailing market rates.

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A company enters into a short futures contract to sell 5,000 units of a commodity for 70 cents per unit. The initial margin is $4,000 and the maintenance margin is $3,000. What is the futures price per unit above which there will be a margin call? What happens if the company does not meet the margin call?

Answers

The main answer is the futures price per unit above which there will be a margin call is $0.76. If the company does not meet the margin call, then the broker will close out the position in the market in order to bring the margin account back up to the maintenance level.

Explanation:A futures contract is a contract between two parties in which one party agrees to sell and the other party agrees to buy a particular commodity at some point in the future at a specified price.Short futures contractIn a short futures contract, the seller is obligated to sell the commodity at a future date for a predetermined price. Here, the company has entered into a short futures contract to sell 5,000 units of a commodity for 70 cents per unit.Initial margin and Maintenance marginThe initial margin is the amount of money required by the broker to be deposited by the buyer or seller of the futures contract in order to cover potential future losses.

The maintenance margin is the minimum amount of money required to be held in the account in order to keep the futures contract open.Margin callThe futures price per unit above which there will be a margin call can be calculated as follows:70 cents * 5,000 = $3,500 is the total amount of money that the seller will receive for selling 5,000 units of the commodity at 70 cents per unit.$4,000 - (5,000 * 70 cents) = $1,500 is the amount of money available for potential future losses.$1,500 / 5,000 = $0.30 is the maximum amount per unit that the futures price can fall before a margin call is triggered.The futures price per unit above which there will be a margin call is $0.76 ($0.70 + $0.06).If the company does not meet the margin call, then the broker will close out the position in the market in order to bring the margin account back up to the maintenance level.

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Carla Vista Corporation issued 2,800, 6%, 5-year, $1,000 bonds dated January 1, 2022, at 100. Interest is paid each January 1.
(a)Prepare the journal entry to record the sale of these bonds on January 1, 2022.
(b)Prepare the adjusting journal entry on December 31, 2022, to record interest expense

Answers

(a) A journal entry debiting Cash for $2,800,000 and crediting Bonds Payable for $2,800,000. (b) Journal entry on December 31, 2022, debiting Interest Expense for $168,000 and crediting Interest Payable for $168,000 to account for the accrued interest expense on the bonds.

The journal entry to record the sale of the bonds on January 1, 2022 would be as follows:

Date: January 1, 2022

Account Debit Credit

Cash $2,800,000

Bonds Payable $2,800,000

The company received cash of $2,800,000 from the issuance of 2,800 bonds at $1,000 each. The Bonds Payable account represents the liability for the bonds issued.

The adjusting journal entry on December 31, 2022, to record interest expense would be as follows:

Date: December 31, 2022

Account Debit Credit

Interest Expense $168,000

Interest Payable $168,000

The bonds have a stated interest rate of 6% annually, so the interest expense for one year would be calculated as: $2,800,000 (bonds face value) × 6% (interest rate) = $168,000. Since the interest payment date is on January 1, the company needs to accrue interest expense for the portion of the year that has passed (from the issuance date to December 31, 2022). The Interest Payable account represents the accrued interest that is payable on the next interest payment date.

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Crane Manufacturing Company uses a job order cost system and keeps perpetual inventory records

June

1 Purchased raw materials for $25,200 on account.

8 Raw materials requisitioned by production:

Direct

materials

Indirect

$10,080

materials

1.260

15

Paid factory utilities, $2.646 and repairs for factory equipment, $10,080.

25

25

Incurred $114.000 of factory labor

Time tickets indicated the following

Direct Labor

(7.000 hrs $12

per hel

$84,000

Indirect Labor

(3.000 hrs $10

30,000

App

hou

$114.000

25 Applied manufacturing overhead to production based on a predetermined overhead rate of $9 per direct labor hour worked.

28 Goods costing $18,120 were completed in the factory and were transferred to finished goods inventory.

30 Goods costing $15,120 were sold for $20,120 on account.

Answers

Based on the information provided, we can prepare the journal entries for the transactions that occurred in June in Crane Manufacturing Company:

June 1: