A secret agreement among companies that may result from this interdependence

Functions of Money Jeffrey has had a busy day. Today he went to a financial manager to begin planning for his son's future. He o

Novosadov [1.4K]

Answer:

Store of value.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

The three (3) main functions of money all over the world are;

I. Medium of exchange.

II. Unit of account.

III. Store of value.

In this scenario, Jeffrey went to a financial manager to begin planning for his son's future by opening a college savings account. Thus, this is is an example of a store of value because the purchasing power was transferred from the present to the future.

In conclusion, money being a store of value makes it possible to transfer purchasing power between traders and buyers from the present to the future.

5 0

3 years ago

Which services are bannks most liikly to offer

gregori [183]

Answer:

checking accounts, saving accounts, certificates of deposit, and loans.

Explanation:

4 0

3 years ago

Heavy Metal Corporation is expected to generate the following free cash flows over the next five years.

mezya [45]

Answer:

Enterprise value of Heavy Metal= $1,080.766

Share price = $18.945 per unit

Explanation:

The value of a firm is the present value of the free cash flow discounted at the weighted average cost of capital

Year PV

1 52.1 × 1.14^(-1) = 45.70175439

2 68.6 × 1.14^(-2) = 52.40073869

3 78.6 × 1.14^(-3) = 53.05276117

4 74.4× 1.14^(-4) = 44.05077264

5 81.1 × 1.14^(-5) = 42.12079868

Year and beyond

81.1 × 1.04/(0.14-0.04) = 843.44

Total value = 45.70+ 52.40+53.052 + 44.050 +42.120+ 843.44 = 1080.766826

Enterprise value of Heavy Metal= $1,080.766

Share price = Total value - Debt value / number of shares

= (1,080.766 - 304 )/ 41 million units= $18.945 per unit

Share price = $18.945 per unit

4 0

3 years ago

Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $250 million of 8% bonds, dated January 1, on January 1, 2

stealth61 [152]

Answer:

A. 1-Jan-21

Dr Investment in Bond $250

Cr Cash $228

Cr Discount on bond investment $22

30-Jun-21

Dr Cash $10

Dr Discount on bond investment $1.40

Cr To Interest revenue $11.40

31-Dec-21

Dr Cash $10

Dr Discount on bond investment $1.47

Cr Interest revenue $11.47

B. $240 million

C. In Million)

31-Dec-21

Dr Fair value adjustment $9.13

Cr Unrealized holding gain or loss - NI $9.13

D. Net cash flow from operating activities= $208 Outflow

Cash flow from investing activities=$0.00

Explanation:

a. Preparation of the relevant journal entries on the respective dates.

1-Jan-21

Dr Investment in Bond $250

Cr Cash $228

Cr Discount on bond investment $22

($250-$228)

(Being to record the investment in bond )

30-Jun-21

Dr Cash $10

($250 * 8% * 6/12)

Dr Discount on bond investment $1.40

($11.40-$10)

Cr To Interest revenue $11.40

($228*10%*6/12)

(Being to record revenue recognition for bond interest and discount amortized)

31-Dec-21

Dr Cash $10

($250 * 8% * 6/12)

Dr Discount on bond investment $1.47

($11.47-$10)

Cr Interest revenue $11.47

($229.40*10%*6/12)

(Being to record revenue recognition for bond interest and discount amortized)

b. Calculation for what amount will Fuzzy Monkey report its investment in the December 31, 2016, balance sheet

Based on the information given we were told that the fair value of the bonds at December 31, 2021, was the amount of $240 million which means that the amount that Fuzzy monkey will report its investment on December 31, 2021 balance sheet will be the fair value amount of $240 million

c. Preparation of any entry necessary to achieve this reporting objective

(In Million)

31-Dec-21

Dr Fair value adjustment $9.13

($240 - $228 - $1.40 - $1.47)

Cr Unrealized holding gain or loss - NI $9.13

(Being to record adjusting entry to record investment at fair value)

d. Calculation for How would Fuzzy Monkey's 2016 statement of cash flows be affected by this investment

STATEMENT OF CASH FLOW (Partial) For 2021

(In million)

Cash flow from operating activities

Short term investment $228

Less: Interest received ($20)

Net cash flow from operating activities $208 Outflow

Cash flow from investing activities $0.00

6 0

3 years ago

13. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw

timurjin [86]

Answer:

80000 unit of Alpha

Explanation:

This is a Limiting factor/resource constraint question. In certain situations entities suffer from shortage of necessary resources (e.g: shortage of material, labor hours, machine hours), in such circumstances entities strive to allocate the constraint resources to the production of those products which generate the highest contribution per limiting factor and help maximize total contribution. In this case the limiting factor for Cane is Raw material.

Lets suppose that each unit of Alpha and Beta sell for $120 and $80 respectively and variable cost per unit of Alpha and Beta is $69 and $20 respectively. Each unit of Alpha and Beta require 2 and 5 pounds of raw material for production respectively.

Now that we have supposed the data we have to compute contribution per unit and then contribution per limiting factor and based on the ranking (i.e highest first) of contribution per limiting factor we decide which product should be given priority for resource allocation.

Lets calculate contribution per unit.

Alpha:

Contribution per unit= SP-VC

Where, SP stands for selling price and VC stands for variable cost.

CPU= 120-69

CPU=$51

Beta:

Contribution per unit= 80-40

CPU=$40

Now, lets calculate contribution per limiting factor.

Alpha:

CLF: $51÷2

CLF: $25.5 1st Rank

Beta:

CLF: $40÷5

CLF: $8 2nd Rank

So clearly Alpha has a greater contribution per limiting factor and it implies that Alpha will earn the highest contribution margin therefore Cane should produce and allocate resources to Alpha first and then Beta if there remains any?

Profit maximizing output:

It requires 2 pounds of raw material to produce one unit of Alpha (i.e 80000×2=160000) Therefore Cane should produce 80000 units of Alpha only in order to maximize its profits.

3 0

3 years ago