A rational decisionmaker

A consultant predicts that there is a 25 percent chance of earning $500,000 and a 75 percent chance of earning $100,000. The exp

antiseptic1488 [7]

Answer:

$173,205

Explanation:

According to the scenario, computation of the given data are as follows:

Given data:

Earning (X1) = $500,000

Chances of X1 (Y1) = 25%

Earning (X2) = $100,000

Chances of X2 (Y2) = 75%

Expected Profit (Z) = $200,000

Formula for solving the problem are as follows:

Standard deviation = [ (X1 - Z)^2 × Y1 + (X2 - Z)^2 × Y2 ]^1/2

By putting the value in the formula, we get

Standard deviation = [ ($500,000 - $200000)^2 × 0.25 + ($100,000 - $200,000)^2 × 0.75 ]^1/2

= [ $22,500,000,000 + $7,500,000,000 ]^1/2

= ($30,000,000,000)^1/2

= $173,205.08 or $173,205

Hence, $173,205 is the correct answer.

6 0

3 years ago

A company settles a long-term note payable plus interest by paying $68,000 cash toward the principal amount and Page 565 $5,440

Juli2301 [7.4K]

Answer:

$68,000

Explanation:

The long-term note payable is a debt that is formally established through a written agreement. An example of long-term note payable is a bank loan.

When the principal and the interests of a long-term note are paid, they represent Cash outflows from the business and are recorded in the Cashflow Statement. However, their treatments are different. Another way to put it is that they bring a reduction in the cash of the organisation.

The $68,000 principal amount paid is an outflow from the company that is recorded in the financing activity section of the Cash Flow Statement

The Interest of $5,440 is also an outflow from the business but it is reported in the operating activity section of the Cash Flow Statement. The reason for its report is that it is actually reported in the Organisation's Statement of Income as an expense for the year. It, therefore, qualifies as an operating activity expense or outflow.

7 0

3 years ago

From an operations standpoint, one of the goals of the firm under the theory of constraints is to increase throughput while simu

OverLord2011 [107]

Answer:

True

Explanation:

The theory of constraints focuses on establishing the most important limiting factor or constraint in a business and improve it in order to improve the whole company's performance.

In simple terms, a company recognizes their greatest weakness and tries to improve it, so that it no longer represents a limitation.

This theory was originally developed for manufacturing companies, and it was meant to reduce bottlenecks (manufacturing constraints). Therefore one of its main goals is to lower inventory levels and operating costs while increasing production output.

8 0

3 years ago

Question 1

eimsori [14]

Answer:

Explanation:

I think it's A.

You should always question the source. You might be lucky and discover what they've not said about their product. Or you may discover it is simply not true.

A few years back (many in fact), there was a product on the market call Laetrile. It was produced from peach pits. It has an overwhelming popularity that Sloan Kettering (the Cancer Clinic in New York -- the oldest and largest one in the world), spent some of their needed grant money to test Laetrile. The results -- nothing. Imagine what happened to those who marketed this product. Word got around. People with Cancer are pretty desperate. They and their loved ones will try anything.

But the facts on the internet help to dispel this kind of thing.

5 0

2 years ago

Sean Davis is the owner, president, and primary salesperson for Davis Manufacturing. Because of this, the company's profits are

Natali5045456 [20]

Answer:

The related cash flows to Sean are as follows;

a. $424,000

b. $592,000

c.$399,808

d. $512,885

Explanation:

In this question, we are asked to calculate cash flows to Davis manufacturing given that debt is issues and equity is issued for a number of hour-week

We proceed as follows;

a. For a 40 - hour week and Debt is issued

Mathematically, the cash flow is calculated below as follows;

Cash Flow = EBIT - Interest on debt = $594,000 - ($1.7 million x 10%) = $424,000

b. For a 50 - hour week and Debt is issued

Mathematically, the cash flow is calculated as follows;

Cash Flow = EBIT - Interest on debt = $762,000 - ($1.7 million x 10%) = $592,000

c. For a 40 - hour week and Equity is issued

Mathematically, the cash flow is calculated as follows;

In this case, there will be no interest cost

The firm's value will be increased by the amount of infusion but ownership of sean will be diluted.

New ownership of Sean = $3.5 million / ($3.5 million + $1.7 million) = 0.67307692307

Mathematically, the cash flow is calculated as follows

Cash Flow to Sean = EBIT x new share = $594,000 x 0.67307692307 = $399,808

d. For a 50 - hour week and Equity is issued

The calculation is as above and there is also no interest course

Cash Flow = EBIT x new share = $762,000 x 0.67307692307 = $512,885

KINDLY NOTE EBIT IS EARNINGS BEFORE INTEREST AND TAXES

5 0

3 years ago