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2 years ago

Financial managers increase value by accepting all investment projects that earn _____ the opportunity cost of capital.

1 answer:

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Financial managers increase value by accepting all investment projects that earn more than the opportunity cost of capital.

What is the opportunity cost of capital?

The opportunity cost of capital is the rate of return that could be earned from an alternative investment opportunity if the funds are released for other investment projects.

For an investment project to be acceptable and value-creating its rate of return should be more than the cost of capital, which is the cost of funding or financing the project.

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Sabrina, a production manager at Orrin Co., needs to measure the performance of 12 of her subordinates. She divides the number o

Tcecarenko [31]

Answer: Forced-distribution

Explanation:

The forced distribution is one of the type of method which is used by the various types of organizations or companies for the purpose of evaluating the performance of an employees by using the rating system parameter.

By using the forced distribution method the organizations are establishing the appraisal method by evaluating the productivity and the performance of an employees and it is also known as the management tool.

According to the given question, Sabrina is the production manager at the Orrin Corporation and they needs to measure the overall performance of the subordinates so she is using the forced distribution method by dividing each employees into the different types of categories such as Exceptional, below average, Average and above average.

Therefore, Forced Distribution is the correct answer.

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3 years ago

A monopolist finds that a person’s demand for its product depends on the person’s age. The inverse demand function of someone of

KiRa [710]

Explanation:

A manufacturer of computer memory chips produces chips in lots of 1000. If nothing has gone wrong in the manufacturing process, at most 7 chips each lot would be defective, but if something does go wrong, there could be far more defective chips. If something goes wrong with a given lot, they discard the entire lot. It would be prohibitively expensive to test every chip in every lot, so they want to make the decision of whether or not to discard a given lot on the basis of the number of defective chips in a simple random sample. They decide they can afford to test 100 chips from each lot. You are hired as their statistician.

There is a tradeoff between the cost of eroneously discarding a good lot, and the cost of warranty claims if a bad lot is sold. The next few problems refer to this scenario.

Problem 8. (Continues previous problem.) A type I error occurs if (Q12)

Problem 9. (Continues previous problem.) A type II error occurs if (Q13)

Problem 10. (Continues previous problem.) Under the null hypothesis, the number of defective chips in a simple random sample of size 100 has a (Q14) distribution, with parameters (Q15)

Problem 11. (Continues previous problem.) To have a chance of at most 2% of discarding a lot given that the lot is good, the test should reject if the number of defectives in the sample of size 100 is greater than or equal to (Q16)

Problem 12. (Continues previous problem.) In that case, the chance of rejecting the lot if it really has 50 defective chips is (Q17)

Problem 13. (Continues previous problem.) In the long run, the fraction of lots with 7 defectives that will get discarded erroneously by this test is (Q18)

Problem 14. (Continues previous problem.) The smallest number of defectives in the lot for which this test has at least a 98% chance of correctly detecting that the lot was bad is (Q19)

(Continues previous problem.) Suppose that whether or not a lot is good is random, that the long-run fraction of lots that are good is 95%, and that whether each lot is good is independent of whether any other lot or lots are good. Assume that the sample drawn from a lot is independent of whether the lot is good or bad. To simplify the problem even more, assume that good lots contain exactly 7 defective chips, and that bad lots contain exactly 50 defective chips.

Problem 15. (Continues previous problem.) The number of lots the manufacturer has to produce to get one good lot that is not rejected by the test has a (Q20) distribution, with parameters (Q21)

Problem 16. (Continues previous problem.) The expected number of lots the manufacturer must make to get one good lot that is not rejected by the test is (Q22)

Problem 17. (Continues previous problem.) With this test and this mix of good and bad lots, among the lots that pass the test, the long-run fraction of lots that are actually bad is (Q23)

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3 years ago

Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into ya

Schach [20]

Answer:

Port Ormond Carpet Company

1. Journal Entries:

Jan. 1:

Debit Materials $82,000

Credit Accounts payable $82,000

To record the purchase of materials on account.

Jan. 2:

Debit Work-in-Process - Spinning $42,600

Credit Materials $42,600

To record the materials requisitioned.

Jan. 2:

Debit Work-in-Process -Tufting $34,700

Credit Materials $34,700

To record carpet backing

Jan. 2:

Debit Overhead - Spinning $3,300

Debit Overhead - Tufting $2,900

Credit Materials $6,200

To record indirect materials used.

Jan. 31:

Debit Work-in-Process - Spinning $26,300

Debit Work-in-Process - Tufting $17,200

Credit Factory labor $43,500

To record direct labor costs.

Jan. 31:

Debit Overhead - Spinning $12,500

Debit Overhead - Tufting $11,900

Credit Factory labor $24,400

To record indirect labor costs.

Jan. 31:

Debit Overhead - Spinning $5,300

Debit Overhead - Tufting $3,100

Credit Factory Depreciation $8,400

To record depreciation costs.

Jan. 31:

Debit Overhead - Spinning $1,000

Debit Overhead - Tufting $800

Credit Factory Insurance $1,800

To record insurance costs.

Jan. 31:

Debit Work-in-Process - Spinning $22,400

Debit Work-in-Process - Tufting $18,250

Credit Factory Overhead $40,650

To record overhead costs applied.

Jan. 31:

Debit Work-in-Process - Tufting $90,000

Credit Work-in-Process - Spinning $90,000

To record the transfer to Tufting department.

Debit Finished Goods Inventory $153,200

Credit Work-in-Process- Tufting $153,200

To record the transfer to Finished Goods.

Jan. 31:

Debit Cost of Goods Sold $158,000

Credit Finished Goods $158,000

To record the cost of goods sold.

2. January 31 balances of the inventory accounts:

Finished Goods = $3,500

Work-in-Process - Spinning = $3,300

Work-in-Process - Tufting = $9,550

Materials = $600

3. Factory Overhead Accounts- Spinning:

Account Titles Debit Credit

Jan. 31 Materials (Indirect) 3,300

Indirect labor 12,500

Depreciation exp. 5,300

Factory insurance 1,000

Applied overhead 22,400

Overapplied overhead 300

Factory Overhead Accounts- Tufting:

Account Titles Debit Credit

Materials (Indirect) $2,900

Indirect labor 11,900

Depreciation expenses 3,100

Insurance expense 800

Applied overhead -WIP-Tufting 18,250

Underapplied overhead 450

Explanation:

a) Data and Calculations:

January 1 Inventories:

Finished Goods = $3,500

Work in Process- Spinning = $2,000

Work in Process - Tufting = $2,600

Materials = $4,800

Finished Goods

Account Titles Debit Credit

Beginning balance $8,300

Work-in-Process-Tufting 153,200

Cost of Goods Sold $158,000

Ending balance 3,500

Work-in-Process - Spinning

Account Titles Debit Credit

Beginning balance $2,000

Materials 42,600

Direct labor 26,300

Applied overhead 22,400

Work-in-Process -Tufting $90,000

Ending balance 3,300

Work-in-Process - Tufting

Account Titles Debit Credit

Beginning balance $2,600

Carpet backing 34,700

Direct labor 17,200

Applied overhead 18,250

WIP- Spinning 90,000

Finished Goods $153,200

Ending balance 9,550

Cost of Goods Sold

Finished Goods $158,000

Materials

Account Titles Debit Credit

Beginning balance $4,800

Accounts payable 82,000

Work-in-Process - Spinning $42,600

Work-in-Process - Tufting 37,400

Manufacturing overhead- Spinning 3,300

Manufacturing overhead- Tufting 2,900

Ending balance 600

8 0

3 years ago

Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positivel

Dmitry_Shevchenko [17]

Answer:

a) Portfolio ABC's expected return is 10.66667%

Explanation:

The expected return is based on the risk factor of a project. If a project has higher risk its rate of return will be higher. Portfolio ABC has one third of its funds invested in each stock. The return of on A and B are 20% and 10%. Their beta is 1.0 for both the stocks while stock C has beta 1.4. The portfolio expected return will be 10.66667%.

5 0

3 years ago

The Accounts Receivable balance for Lake, Inc. at December 31, 2017, was $ 20 comma 000. During 2018, Lake earned revenue of

elena-s [515]

Answer:

The required journals are:

Debit Bad debt expense $10,070

Credit Allowance for doubtful accounts $10,070

(To record bad debt for the year)

Explanation:

To understand the effects of the transactions, we need to journalize as follows:

Debit Accounts receivable $454,000

Credit Sales revenue $454,000

(To record sales transaction on account)

Debit Cash $325,000

Credit Accounts receivable $325,000

(To record collections on account)

Debit Allowance for doubtful accounts $5,600

Credit Accounts receivable $5,600

(To record write-off of accounts receivable)

With the above journals, the balance in accounts receivable will be: $20,000 + $454,000 - $325,000 - $5,600 = $143,400. The 5% of $143,400 will be $7,170.

The effect of the write-off was to throw the unadjusted allowance for doubtful account into debit as $2,700 - $5,600 = $2,900. The required bad debt expense will $10,070 ($7,170 + $2,900).

3 0

3 years ago