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2 years ago

Entrepreneurs use distributors to purchase resources and invest in the production of goods. True or false?.

1 answer:

4 0

Entrepreneurs do not use distributors to purchase resources and invest in the production of goods so this statement is FALSE.

<h3>How do Entrepreneurs purchase resources?</h3>

Entrepreneurs are able to invest in the production of the goods and services they provide by using their own funds and liability.

They do not use distributors but rather foot the bills as well as getting loans to be able to engage in the purchase of resources.

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LO 2.1Which of the following is the primary source of revenue for a service business?

malfutka [58]

Answer:

providing intangible goods and services

Explanation:

A service business is an organisation that provides services.

Examples of service businesses are airlines, insurance companies, and hospitals.

I hope my answer helps you

3 0

3 years ago

Read 2 more answers

(Appendix 11.1) Depreciation for Financial Statements and Income Tax Purposes Dinkle Company purchased equipment for $50,000. Th

Romashka-Z-Leto [24]

Answer and Explanation:

The computation is shown below:

For year 1

According to the Company's Books Depreciation

= (Orginal Cost - Salvage value) ÷ useful Life

= ($50,000 - $5,000) ÷ 10 years

= $4,500

According to the Income Tax Depreciation

= Cost × MACRS Rate for Year 1

= $50,000 × 20%

= $10,000

So, the difference in year 1 is

= $10,000 - $4,500

= $5,500

For year 2

According to the Company's Books Depreciation

= (Orginal Cost - Salvage value) ÷ useful Life

= ($50,000 - $5,000) ÷ 10 years

= $4,500

According to the Income Tax Depreciation

= Cost × MACRS Rate for Year 2

= $50,000 × 32%

= $16,000

So, the difference in year 1 is

= $16,000 - $4,500

= $11,500

7 0

3 years ago

ROI, Residual Income, and EVA with Different Bases Envision Company has a target return on capital of 12 percent. The following

lara [203]

Answer:

a. ROI = income / Assets

Book Value Current Value

Software Division 0.175 0.13

Consulting Division 0.164 0.182

Venture Capital Division 0.093 0.088

<u>Workings:</u>

i. Book value

Software Division = 12,250/70,000=0.175

Consulting Division = 16,400/100,000=0.164

Venture Capital Division = 56,730/610,000 =0.093

ii. Current value

Software Division = 11,700/90,000=0.13

Consulting Division = 20,020/110,000=0.182

Venture Capital Division= 51,920/ 590,000=0.088

b. Residual income = Income - {Asset x Return on capital 12% }

Book Value Current Value

Software Division 3850 900

Consulting Division 4400 6820

Venture Capital Division -16470 -18880

<u>Workings:</u>

i. Book value

Software Division = 12,250-(70,000*12%)=3850

Consulting Division = 16,400-(100,000*12%)=4400

Venture Capital Division = 56,730-(610,000*12%) =-16470

ii. Current value

Software Division = 11,700-(90,000*12%)=900

Consulting Division = 20,020-(110,000*12%)=6820

Venture Capital Division= 51,920-(590,000*12%)=-18880

c. Economic Value Added ( EVA ) = Net Income After Tax - ( Amount of Capital x Weighted Average Cost of Capital [WACC] )

C. Software Division

(Value Base)

Book Current

Sales 100,000 100,000

Income 12,250 11,700

Assets 70,000 90,000

Liabilities 10,000 10,000

Capital invested 60,000 80,000

(Asset - Liabilities)

Tax on Income(30%) 3675 3510

Income after Tax 8,575 8,190

(Income - Tax on

income) (A)

Capital invested 6,000 8,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B) 2,575 190

Consulting Division

(Value Base)

Book Current

Sales 200,000 200,000

Income 16,400 20,020

Assets 100,000 110,000

Liabilities 14,000 14,000

Capital invested 86,000 96,000

(Asset - Liabilities)

Tax on Income(30%) 4920 6006

Income after Tax 11,480 14,014

(Income - Tax on

income) (A)

Capital invested 8,600 9,600

* WACC - 10% ) (B)

EVA (C)=(A)-(B) 2,880 4,414

Venture Capital Division

(Value Base)

Book Current

Sales 800,000 800,000

Income 56,730 51,920

Assets 610,000 590,000

Liabilities 40,000 40,000

Capital invested 570,000 550,000

(Asset - Liabilities)

Tax on Income(30%) 17019 15576

Income after Tax 39,711 36,344

(Income - Tax on

income) (A)

Capital invested 57,000 55,000

* WACC - 10% ) (B)

EVA (C)=(A)-(B) -17,289 -18,656

8 0

2 years ago

Cryo-vac expects sales to increase 20% next year from the current level of $5,000,000. The firm has current assets of $1,000,000

MAVERICK [17]

Answer:

Consider the following calculations

Explanation:

Current Sales Level = $ 5000000 and Expected Sales Growth Rate = 20 %

Next Year Sales = 5000000 x 1.2 = $ 6000000

Expected Profit Margin = 8% and Expected Profit = 0.08 x 6000000 = $ 480000

Expected Dividend Payout = $ 200000

Increase in Retained Earnings = Expected Profit - Expected Dividend Payout = 480000 - 200000 = $ 280000

An increase in retained earnings such as the aforementioned unbalances the asset, liability, equity equation and hence, some of the asset-liability items need to change so as to rebalance the equation. The items that usually change are the current assets, fixed assets, and current liabilities except for the current portion of the firm's long-term debt as the same is a function of the firm's financing activities, whereas increment in the sale and consequent increment in other balance sheet items are operating activities.

Further, it is assumed that the current assets and current liabilities less notes payable (it is a short-term financing instrument and hence remains unchanged) all increase at the same rate as sales increment. Fixed Assets although increase to support higher sales level, but are part of the firm's investing activities and hence do not bear a direct proportional relationship with the increase in sales.

Change in Current Asset = (1.08 x 1000000) - 1000000 = $ 80000

Change in Fixed Assets = 300000 (already mentioned)

Change in Current Liabilities less Notes Payable = (750000 - 300000) x 1.08 - (750000 - 300000) = $ 36000

Therefore, Additional Financing Required = Change in Current Assets + Change in Fixed Assets - Change in Current Liabilities less Notes Payable - Increment in Retained Earnings = 80000 + 300000 - 36000 - 280000 = $ 64000

5 0

3 years ago

_______ believed that quality stemmed from "constancy of purpose," and that managers should stress teamwork, be helpful rather t

gayaneshka [121]

Answer:

Group of choices:

A- Max Weber

B- Mary Parker Follett

C-W. Edwards Deming

The correct answer is C-W. Edwards Deming.

Explanation:

William Edwards Deming (1900-1993) was a statistician, university professor, author of texts, consultant and disseminator of the concept of total quality. His works introduced the new management principles into the Japanese industry, and revolutionized their quality and productivity.

During World War II, Deming taught American technicians and engineers statistics that could improve the quality of war materials. But his work was ignored.

He went to Japan in 1950, when his industry and economy was in crisis. He taught Japanese administrators, engineers, and scientists how to produce quality products and services. They listened and applied their principles. They changed their way of thinking, their management style and their relationship with employees. By following Deming's philosophy, the Japanese turned their economy and productivity completely to become the world market leaders.

Thirty years later, Americans seeing how Japan became an industrial power in a short time, sought Deming's advice. Back in the United States in 1980, Deming starred in a NBC-broadcast show titled "If Japan Can ... Why Can't We?" Thus, the demand for its services grew dramatically.

5 0

3 years ago