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Answer:
When using dollar-value LIFO, the ending inventory at current year cost must first be converted to base year cost. The 12/31/Y2 inventory at base year cost is given as $60,000. Since the 12/31/Y1 inventory at base year cost was $45,000 ($40,000 base layer and $5,000 year 1 layer), a new layer of $15,000 was added in year 2 ($60,000 − $45,000). This layer must be restated using the year 2 price index. The year 2 price index is computed using the double-extension technique, as illustrated below.
Answer: A - 1,750
Explanation:From the above question, The contribution margin per ticket sold is $30 for the regular cruise and $90 for the executive. Fixed costs are $210,000.
What is the total number of regular cruises Blue Seas must sell in order to breakeven?
BEP in units = fixed cost/ contribution margin.
= $210,000/($30 * 4) = 1,750
Answer:
the tendency for managers to focus on immediate performance objectives at the expense of longer-term strategic objectives.
Explanation:
Short-termism is defined as the tendency for managers to focus on immediate performance objectives at the expense of longer-term strategic objectives.
Under Short-termism, managers of businesses or organizations gives so much priority to quick profits.
a. Risk Premium on J & M common stock = Return on Market - Risk Free Rate
Risk Premium on J & M common stock = 11% - 6%
Risk Premium on J & M common stock = 5%
b. Required Return = Rf + Beta * (RM - RF)
= 6% + 1.2*5%
= 6% + 6%
= 12%
So the required rate of return is 12% which should be atleast provided by J & M common stock.
c. J & M cost of common stock equity is the same as b that equals to 12%.