M1: 4750
2500 billion in the economy
Answer:
Note Contract Date Principal Interest Rate Period of Note (Term)
1 March 7 $12,000 5 % 60 days
2. May 21 $18,000 7% 90 days
3. October 26 $ 14,000 4% 45 days
1. Maturity date = 6 May
Interest expenses = $12,000*5%*60/360
Interest expenses = $100
2. Maturity date = 19 August
Interest expenses = $18,000*7%*90/360
Interest expenses = $315
3. Maturity date = 10 December
Interest expenses = $14,000*4%*45/360
Interest expenses = $70
Answer:
Simple rate of return = 6.25%
Explanation:
As per the data given in the question,
Net operating income = saving - depreciation on machine
Investment = cost price - scrap value
So, we can calculate the simple rate of return by using following formula:
Simple rate of return = Net operating income ÷ investment
By putting the value, we get
= ($138,000 - $89,200) ÷ ($802,800 - $22,200)
= 0.0625
= 6.25%
Answer:
Quantitatively, Harlan Bikes is justified in deciding to close the department, but there are other qualitative factors that need to be considered which may result in the company loosing much more that they can save if the department is closed, such as for example a decrease in employee morale, a negative signalling effect to other stakeholders, a drop in sales in related products etc.
Explanation:
A decrease in employee morale can result especially if workers in other departments are no-longer sure about their future in the company, resulting from fears of their departments being closed. This can negatively affect productivity resulting in lower profits in other department.
A negative signalling effect means that other stakeholders such as investors and creditors may start questioning managements ability to profitably run the business, and the company will be perceived as more risky. Cost of debt and cost of equity capital for example, may go up, due to this higher perceived risk, and which may reduce the number of positive net present value projects that the company can undertake due to an increase in cost of capital.
If the company carries related products in other departments, it may also see a drop in sales in those sales, which will effectively reduced the savings that are estimated to be gained from closing the division.
