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Luda [366]
3 years ago
14

Yakov lives in San Diego and runs a business that sells boats. In an average year, he receives $704,000 from selling boats. Of t

his sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Yakov does not operate this boat business, he can work as an accountant and receive an annual salary of $20,000 with no additional monetary costs. No other costs are incurred in running this boat business. Identify each of Yakov's costs in the following table as either an implicit cost or an explicit cost of selling boats. Complete the following table by determining Yakov's accounting and economic profit of his boat business. If Yakov's goal is to maximize his economic profit, he stay in the boat business because the economic he would earn as an accountant would be __________
Business
1 answer:
Stolb23 [73]3 years ago
7 0

Answer:

Yakov's explicit costs are the monetary costs that he pays while running his business:

Payment to manufacturer: $404,000

Wages and utility bills: $286,000

Total explicit costs: $690,000

Yakov's implicit costs are his opportunity costs, in other words, the things he gives up in order to run his business:

Rent he would get for his showroom: $3,000

Wage he would get as an accountant: $20,000

Total implicit costs: $23,000

Yakov's accounting profit is equal to revenue minus total explicit costs:

Accounting profit = $704,000 - $690,000

                             = $14,000

Yakov's economic profit is equal to revenue minus total costs (the sum of implic costs and explicit costs)

Economic profit = $704,000 - $713,000

                          = ($9,000)

Despite the fact that Yakov is not earning an economic profit selling boats, as an accountant, he would give up on the $704,000 that he is been making from selling boats. For that reason, he should keep the boat selling business.

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Mia has an investment that is worth $12,000 after 4 years. If the initial investment was $8,000, what is the annual simple inter
Alexus [3.1K]

Answer: 12.5 %

Explanation:

Hi, to answer this question we have to apply the simple interest formula:  

I = p x r x t  

Where:  

I = interest (investment after interests - principal; 12000-8000=4000)

P = Principal Amount (initial invest)  

r = Interest Rate (decimal form)  

t= time  

Replacing with the values given  

4,000= 8,000 (x) 4

Solving for x :

4,000= 32,000x

4,000/ 32,000 =x

x= 0.125

Since the interest rate is in decimal form, we have to multiply it by 100 to obtain the percentage.

0.125 x 100 = 12.5 %

Feel free to ask for more if needed or if you did not understand something.  

6 0
2 years ago
Parent Inc. purchased 30% of the common stock of Affiliate Co. on January 1, YR01 for $5,000 and appropriately accounted for thi
blondinia [14]

Answer:

net cash from investing activities = -$4,940

operating and financing activities are not affected.

Explanation:

the journal entries should be:

January 1, socks purchased

Dr Investment in Affiliate 5,000

    <u>Cr Cash 5,000</u>

December 31, dividends received

<u>Dr Cash 60</u>

    Cr Investment in Affiliate 60

December 31, Affiliate reports net income

Dr Investment in Affiliate 300

    Cr Revenue from investing activities 300

Only the cash flow from investing activities will be affected by Parent's investing in Affiliate. Since the company uses the equity method, the operating and financing cash flows are not affected.

The cash flow from investing activities will:

  • Decrease by $5,000 due to the purchase of stocks.
  • Increase by $60 due to the dividends received.
  • net cash from investing activities = -$4,940

4 0
3 years ago
A piece of property bought by XYZ Corporation a few years ago was sold for $5 M. The cost basis for this property was $2.75 M. T
Tanzania [10]

Answer:

True

Explanation:

Data given in the question

Sale value of the property = $5,000,000

Cost basis of property = $2,750,000

And, the taxable income is $12,150,000

So, based on the above information, the capital gain on the property is

= (Sale value of the property - Cost basis of property) × capital gain tax rate

= ($5,000,000 - $2,750,000) × 15%

= $337,500

We assume the capital gain tax rate is 15%

Hence, the given statement is true

8 0
2 years ago
A form of comparative analysis where customers show their opinions of another firm’s strengths vis-?-vis their competitors is a
Bezzdna [24]
The answer to this question is the term perceptual map. A pepceptual mapping is a technique used by marketers to visually map the customer's and possible customer's perception to a product versus to its competitor into a diagram. Perceptual mapping is also known as market maps. In perceptual mapping it also an analysis where the customers shows about an opinions of the competitors strenghts over them.
3 0
3 years ago
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeM
mihalych1998 [28]

Answer and Explanation:

The preparation of the schedule of cash collections from sales for October, November, and December is presented below:

Particulars    October      November           December  

Sales           $58,000      $65,000           $72,000  

Cash sales   $14,500             $16,250                  $18,000

                     ($58,000 × 0.25)   ($65000 × 0.25)         ($72,000 ×.25 )

Credit sale   $43,500              $48,750                    $54,000  

                     ($58,000 - $14,500)                  

September account receivable       $35,000      

current month payment      

October credit sale:       $13,050       $30,450  

                   ($43,500 × 30%)       (43500 ×70%)  

November credit sale                 $14,625                    $34,125

                                                           ($48,750 × 30%)            (48750 × 70% )

December credit sale:                                  $16,200  

                                                                                                 ($54,000 × 30% )

Total cash collected         $62,550  $61,325                    $68,325

($14,500 + $35,000 + $13,050)   ($16,250 + $30,450 + $14,625)        ($18,000 + $34,125 + $16,200)

5 0
3 years ago
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