Answer:
$80,000
Explanation:
Calculation for the net income for Dana's Dress Shop using the traditional format
NET INCOME USING TRADITIONAL FORMAT
Using this formula
NET INCOME=Gross Margin -Total Selling & Administrative Expenses
Where,
Gross Margin =$140,000
Total Selling & Administrative Expenses=$60,000
Let plug in the formula
NET INCOME=$140,000-$60,000
NET INCOME=$80,000
Therefore the NET INCOME will be $80,000.
Answer:
a. 4 years and 4.22 years
b. -$31,350 and $27,615
c. Project Nuts
Explanation:
a. The formula to compute the payback period is shown below:
= Initial investment ÷ Net cash flow
For project soup, it would be
= $600,000 ÷ $150,000
= 4 years
For project nuts, it would be
= $900,000 ÷ $213,000
= 4.22 years
b. The computation of the Net present value is shown below
= Present value of all yearly cash inflows after applying discount factor - initial investment
For project soup, it would be
= $568,650 - $600,000
= -$31,350
The present value is computed below:
= Annual cash flow × pvifa for 5 years at 10%
= $150,000 × 3.791
= $568,650
For project nuts, it would be
= $927,615 - $900,000
= $27,615
The present value is computed below:
= Annual cash flow × pvifa for 6 years at 10%
= $213,000 × 4.355
= $927,615
Kindly refer pvifa table
c. The project Nuts should be accepted as it has positive net present value.
Answer: B) counseling
Explanation:
Counseling is the process of rendering professional advice and guidance to individuals through personal interviews, testing interests and aptitudes by utilizing psychological methods. In the case above the supervisor is trying to counsel Xanat due to her deteriorating performance, by assessing her and suggesting possible solutions to her condition.
<span>Implicit Cost Explicit Cost
The wholesale cost for the pianos that Darnell pays the manufacturer $452,000
The salary Darnell could earn if he worked as an accountant $48,000
The wages and utility bills that Darnell pays $301,000
The rental income Darnell could receive if he chose to rent out his showroom $38,000
B.
Profit ($)
Accounting Profit 842,000 - 452,000 - 301,000 = 89,000
Economic Profit 842,000 - 452,000 - 301,000 - 48,000 - 38,000 = 3,000
C. Economic Profit as an accountant = 48,000 + 38,000 - 89,000 = -$3,000. Thus, Darnell should stay in the Piano business to maximize the Economic Profit.</span>
Answer:
D. lowers the discount rate but not if it auctions more credit
Explanation:
Discount rate adjustment and Federal Reserve's auction have the following effects on reserves.
Discount rate adjustment: a <em>higher discount rate</em> will encourage investment in the US economy, thus leading to <em>increased reserves</em> as investment inflows increase.
On the other hand, a <em>lower discount rate</em> encourages investment outflow into other jurisdictions with higher yields, <em>thus reducing reserves</em>.
Auction: <em>auctioning more credit</em> will result in the movement of investment flows into the Federal Reserve (<em>an increase in reserves</em>) as investors invest in auctions. Vice versa.
Therefore, a mix of lower discount rate and not auctioning more credit will result in lower reserves.
