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mezya [45]
3 years ago
9

A. Given the historical cost of product Z is $20, the selling price of product Z is $25, costs to sell product Z are $3, the rep

lacement cost for product Z is $21, and the normal profit margin is 40% of sales price, what is the market value that should be used in the lower-of-cost-or-market comparison?
a. $18.
b. $20.
c. $21.
d. $22.
B. What is the amount that should be used to value the inventory under the lower-of-cost-or-market method?
a. $18.
b. $20.
c. $21.
d. $22.
Explain your work for both parts to get a thumbs-up.
Business
1 answer:
Vlada [557]3 years ago
6 0

Answer:

1.

c. $21

2.

b. $20

Explanation:

1.

In lower-of-cost-or-market comparison, the cost of the product and the realizable value of the product are compared and lower is used to value the available inventory.

In the given Scenario the realizable value of product Z is the recoverable value of the product.

Hence The replacement value of $21 should be used in the lower-of-cost-or-market comparison.

2.

Calculate the net recoverable value for the product Z

Net recoverable value = Selling price of product Z - Cost to sell product Z

Net recoverable value = $25 - $3 = $22

Now by comparing the cost and net realizable value the lower value is cost of $20.

Hence $20 will be used in order to value the inventory.

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valentinak56 [21]

Answer:

Present Value = $9,417.69  (Approx)

Explanation:

Given:

Annual payment = $1,400

Total payments = 25

Rate = 8% = 0.08

Computation:

First payment [7 years from now ]

So,

Present Value = $1,400(1/1.08⁶)[1 - (1/1.08)²⁵] / 0.08

Present Value = $1,400[6.72692]

Present Value = $9,417.69  (Approx)

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3 years ago
The balance of Chiaki's average balance checking account at the beginning of the last cycle was $100, and the only transaction f
Ne4ueva [31]
The correct answer is $90
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3 years ago
Read 2 more answers
The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An inv
jek_recluse [69]

Answer:

D. $0.93

Explanation:

Upmove (U) = High price/current price

                    = 42/40

                    = 1.05

Down move (D) = Low price/current price

                          = 37/40

                          = 0.925

Risk neutral probability for up move

q = (e^(risk free rate*time)-D)/(U-D)

  = (e^(0.02*1)-0.925)/(1.05-0.925)

  = 0.76161

Put option payoff at high price (payoff H)

= Max(Strike price-High price,0)

= Max(41-42,0)

= Max(-1,0)

= 0

Put option payoff at low price (Payoff L)

= Max(Strike price-low price,0)

= Max(41-37,0)

= Max(4,0)

= 4

Price of Put option = e^(-r*t)*(q*Payoff H+(1-q)*Payoff L)

                               = e^(-0.02*1)*(0.761611*0+(1-0.761611)*4)

                               = 0.93

Therefore, The  value of each option using a one-period binomial model is 0.93

8 0
3 years ago
Suggest and critically discuss a model that helps managers to decide to adopt an offensive or defensive route. Support your answ
Artist 52 [7]

Answer:

Please find the complete question in the attached file.

Explanation:

In order to study the impact on five forces and thereby decipher an offensive or defense strategy to stay competitive and maintained, management must employ a prototyping approach as Porters 5 Headed framework. Samsung, for example, should adopt a great combination because of its subsequent globalization.

Providers' bargaining power — In this industry, several companies offer low-cost services, which indicates the suppliers have much less bargaining energy.

Consumers' trading strength - Since Hyundai either works in a totally competitive environment or an oligopolistic marketplace across the globe.

The threat of new entries – The risk is significantly greater because new entries from low-cost China carriers can eat Samsung share since they are tax- and licensing-friendly.

The danger of competing among established businesses - That's also relatively significant because profits are thin and innovative developments are continually making the industry as a whole and tough.

Barriers to business – The biggest barriers are an initial investment, high marketing, and distribution expenses, and constant innovation.

6 0
3 years ago
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Ymorist [56]

Answer:

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The formula for amortization expense = (Cost of patent - Residual value ) / Useful life of patent)

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The legal life would not count due patent in business use for limited life compare to legal life of patent.

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