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3 years ago

Webcom. Inc. had the following current assets and current liabilities at the end of two recent years:

Business

1 answer:

julsineya [31]3 years ago

5 0

Answer:

a. Current Ratio for the current year = 1.18

b. Current Ratio for the preceding year = 0.97

c. Quick Ratio for the current year = 0.98

d. Quick Ratio for the preceding year = 0.76

e. Working Capital for the current year = $3,231

f. Working Capital for the preceding year = –$513

Explanation:

Based on the information provided in the question, we first state the following formula to be used before answering the question:

Current asset = Cash and cash equivalents + Short-term investments, at cost + Accounts and notes receivable, net + Inventories + Prepaid expenses and other current assets ................... (1)

Current liabilities = Short-term obligations + Accounts payable ................. (2)

Current ratio = Current assets / Current liabilities ............................ (3)

Quick Ratio = (Current assets - Inventory) / Current liabilities ............... (4)

Working capital = Current assets - Current Liabilities ........................... (5)

We now calculate the answers as follows:

a. What is the Current Ratio for the current year?

Using equation (1), we have:

Current asset for the current year (in millions) = $8,297 + $422 + $7,041 + $3,581 + $1,479 = $20,820

Using equation (2), we have:

Current liabilities for the current year (in millions) = $4,815 + $12,774 = $17,589

Using equation (3), we have:

Current ratio for the current year = $20,820 / $17,589 = 1.18

b. What is the Current Ratio for the preceding year?

Using equation (1), we have:

Current asset for the preceding year (in millions) = $4,067 + $458 + $6,912 + $3,827 + $2,377 = $17,641

Using equation (2), we have:

Current liabilities for the preceding year (in millions) = $6,205 + $11,949 = $18,154

Using equation (3), we have:

Current ratio for the preceding year = $17,641 / 18,154 = 0.97

c. What is the Quick Ratio for the current year?

Using equation (4) and calculations from part a, we have:

Quick Ratio for the current year = ($20,820 - 3,581) / $17,589 = 0.98

d. What is the Quick Ratio for the preceding year?

Using equation (4) and calculations from part b, we have:

Quick Ratio for the preceding year = ($17,641 - 3,827) / $18,154 = 0.76

e. What is the Working Capital for the current year?

Using equation (5) and calculations from part a, we have:

Working Capital for the current year = $20,820 - $17,589 =$3,231

f. What is the Working Capital for the preceding year?

Using equation (5) and calculations from part b, we have:

Working Capital for the preceding year = $17,641 - $18,154 = –$513

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Shkiper50 [21]

In a perfectly competitive market, every seller takes the price of its product as set by market conditions.

<h3>What is a Perfect Competitive Market?</h3>

Perfect competition is an ideal type of market structure where all producers and consumers have full and symmetric information and no transaction costs. There are a large number of producers and consumers competing with one another in this kind of environment.

Perfect competition is a market structure where many firms offer a homogeneous product. Because there is freedom of entry and exit and perfect information, firms will make normal profits and prices will be kept low by competitive pressures.

<h3>What are some examples of Perfectly Competitive Markets?</h3>

3 Perfect Competition Examples

Agriculture: In this market, products are very similar. Carrots, potatoes, and grain are all generic, with many farmers producing them.
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1 year ago

Which of the following is not correct? a. The consumer price index gives economists a way of turning dollar figures into meaning

Marina CMI [18]

Answer:

The consumer price index is used to measure the quantity of goods and services that the economy is producing.

Explanation:

CPI or consumer price index is a measure of changes in the average prices of a basket of products and services in a given time. The selected goods and services are a fair representation of consumption expenditure in the economy. Economists use the CPI as a Macroeconomic indicator of inflation.

As a measure of inflation, the CPI statistics communicate increases or decreases in the prices of goods and services in the economy. It forms a basis for policy decisions by the government that aid in the prevention of reduced purchasing power of the dollar. CPI is all about changes in prices and nothing to do with the production of goods and services.

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3 years ago

Suppose you buy a 7 percent coupon, 20-year bond today when it’s first issued. If interest rates suddenly rise to 15 percent, wh

Mariana [72]

Answer: The value of the bond will decrease

Explanation:

The Interest rate has a negative inverse relationship with the value of a bond . When the interest rate increases the value of a bond decreases and when interest rate decreases the bond value increases. Bonds with low coupon rates tend to be more sensitive to interest rate changes this is known has coupon effect.

Bonds with long time frame (long term bonds), they also tend to be are more sensitive to changes in the interest rate this is known has the maturity effect. Therefore a change in the interest rate will cause a huge change in the value of a Bond with low coupon rate and long time period.

The Bond is a 20 year Bonds which qualifies it to be a long term bond and the coupon Rate is 7%, with these facts and knowing that long term bonds are more sensitive to interest rate changes we can conclude that the sudden increase of the interest rate to 15% will cause a huge decrease in the value of the bond

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2 years ago

Roger remembers from a business class he took years ago in college that there are several business forms to choose from. Each fo

earnstyle [38]

Answer:

This question is incomplete, the options are missing. The options are the following:

a) Partnership

b) C Corporation

c) S Corporation

d) Limited Liability Company

e) Limited Liability Partnership

And the correct answer is the option D: Limited Liability Company.

Explanation:

To begin with, the name of <em>"Limited Liability Company" </em>refers to a type of form of business, in the field of business law, that is helpful to adapt and use for some owners regarding the particular characteristics that this form gives to them. So once said that, this type of business form has the characteristics of both a corporation and a partnership so that means that it is quite flexible and can adapt depending on the situation that the owner is having. Moreover, one of the most important aspects of this type of form is the fact that the owner has a limited liability to what happens in the company so that means that his private assets are secure under this form.

6 0

3 years ago

Linda decides to open a kiosk in the mall selling baseball hats. It costs her $2280 to stock 100 hats and $3580 to stock 500 hat

Liula [17]

Answer with Explanation:

1. Marginal Cost per Unit

As we know:

Marginal Cost per Unit = Change in Cost / Change in Quantity Bought

= ($3580 - $2280) / (500 - 100)

= $3.25 per Unit

2. Fixed Cost to setup

The fixed cost would be $2280 because it is the cost that is required for setting up the kiosk. The cost $3580 is not relevant because it depends on the demand of the product. The least cost to set up kiosk is $2280.

3. Cost Function

Total Cost = Fixed Cost + Variable Cost

As we know that:

Variable Cost = Marginal cost per unit * Number of units = $3.25 * x = 3.25x

For Fixed cost $2280

By putting this value in the above equation, we have:

Total Cost = $2280 + 3.25x

C(x) = $2280 + 3.25x

And

For Fixed cost $3580

C(x) = $3580 + 3.25x

4. Revenue Function

Total Revenue = Selling Price per Unit * Total Units

Here

Selling price is $8 and total units are "x"

By putting values, we have:

Total Revenue = $8 * x

R(x) = 8x

5. Breakeven Point For $2280 and $3580

As we know that

Breakeven Point = Fixed Cost / Contribution Per unit

For Fixed Cost $2280:

Breakeven Point = $2280 / ($8 - $3.25)

= 480 Units

For Fixed Cost $2280:

Breakeven Point = $3580 / ($8 - $3.25)

= 754 Units

6. Profit Function

For Fixed Cost $2280:

Profit = Revenue Function - Cost Function

P(x) = 8x - ($2280 + 3.25x)

P(x) = 8x - $2280 - 3.25x

P(x) = 4.75x - $2280

For Fixed Cost $3580:

P(x) = 4.75x - $3580

7. Claire's Profit if she sells 1,000 bottles

Using the above profit function for fixed cost $2280, we have:

P(x) = 4.75x - $2280

Here x is 1,000 units, which means:

P(x) = 4.75 * 1,000 - $2280

P(x) = $4,750 - $2280 = $2,470

Using the above profit function for fixed cost $3,580, we have:

P(x) = 4.75x - $3,580

Here x is 1,000 units, which means:

P(x) = 4.75 * 1,000 - $3,580

P(x) = $4,750 - $3,580 = $1,170

5 0

2 years ago