Livingston Fabrication has created the following aggregate plan for the next five months: August September October November December Forecasted Demand (units of finished goods): 1,500,000 1,500,000 2,000,000 3,000,000 500,000 Production Plan: 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Assume that Livingston will have nothing in inventory at the end of July. Livingston employs 1,000 production assembly workers and it takes one production assembly worker 5 minutes to assemble one unit of finished good. (The unit is complete at that point.) Each production assembly worker can provide 150 hours of assembly time a month without requiring overtime pay. What will be ending inventory for the month of September?

Answers

Answer 1

Answer:

Livingston Fabrication

The ending inventory for the month of September is:

= 600,000 units.

Explanation:

a) Data and Calculations:

                                August   September  October  November  December

Forecasted Demand (units of

finished goods):  1,500,000  1,500,000 2,000,000 3,000,000    500,000

Production Plan: 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000

Production capacity = 150 * 60 * 1,000 = 9,000,000 minutes

Minutes required by each assembly worker to assemble 1 unit = 5

Units that can be produced based on capacity = 1,800,000 units (9,000,000/5)

Schedule of Production, Sales, and Ending Inventory:

                                August   September  October  November  December

Beginning inventory 0              300,000    600,000    400,000  (600,000)

Units produced    1,800,000  1,800,000  1,800,000  1,800,000 1,800,000

Demand               1,500,000  1,500,000 2,000,000 3,000,000   500,000

Ending inventory   300,000    600,000    400,000   (600,000)   700,000


Related Questions

the study of business law does not involve an ethical dimension. t or f

Answers

It is true that study of the business law does not involve an ethical dimension.

What is business law?

All the laws that specify how to establish and operate a business are included in the category of "business law." This covers every law that controls how to launch, acquire, run, close, or sell any kind of business. All firms must abide by the laws governing business. A competent businessperson will have a general understanding of business regulations and know when to see a licenced attorney. State, federal, and administrative regulations are all included in business law. Company law spends a lot of time discussing various business groups. Each type must be formed and operated in accordance with specific legislation. Laws governing organisations like corporations, partnerships, and limited liability firms are included in this.

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Monica, a​ doctor, owns a small health care clinic that serves underserved people in a​ lower-income neighborhood. What type of entrepreneur is​ Monica?
A.
A social entrepreneur
B.
A​ home-based entrepreneur
C.
A growth oriented entrepreneur
D.
An Internet entrepreneur
E.
A franchisee

Answers

Answer:

b

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QUESTION 4: PRICING Based on your knowledge of Pricing Strategies, recommend a pricing mix that has the best pricing mix ice Mix 1: • Price MX 2 se Sale Price: $19,500 id-tier Sale Price: $24,55 lly-Loaded Sale Price: 4,999 Price Mix 2: Base Sale Price: $20,000 Mid-tier Sale Price: $25,000 Fully-Loaded Sale Price: $30,000 Price Mix 3: Base Sale Price: $22,000 Mid-tier Sale Price: $24,00 Fully-Loaded Sale Price: $28,999​

Answers

Price Mix 2 is recommended as the best pricing mix strategy. It includes three price tiers: a base sale price of $20,000, a mid-tier sale price of $25,000, and a fully-loaded sale price of $30,000.

The best pricing mix

This pricing mix caters to different customer segments by offering varying levels of features and benefits at different price points. It allows customers to choose a product based on their budget and desired features, increasing the likelihood of conversion and customer satisfaction.

The balanced pricing structure provides options for both price-sensitive customers and those willing to pay more for additional features. Overall, Price Mix 2 maximizes revenue potential by attracting a wider customer base and potentially facilitating upselling opportunities.

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What was the opportunity cost in a situation in which you use your available cash to buy gas for your car and then stay hungry the rest of the way home?

Answers

Answer:

see below

Explanation:

Opportunity cost is the sacrificed benefit by choosing a preferred option over others. The value of opportunity cost is the foregone benefit from the best alternative.

In this situation, the person had to choose between buying gas for the car or using that money to purchase food. Since the person opted to buy gas, they sacrificed having a meal for the rest of the day.  The pleasure derived from eating is the opportunity cost for this person.  

A city government is planning to install a sewage line at a cost $10M with an estimated life of 50 years and an estimated salvage value of $2M. Assume that the line may be replaced at the same cost every 50 in perpetuity. Determine the capitalized cost if the interest rate is 9%Choose the most appropriate answer from the choices below.
A. $8.2M
B. $10.1M
C. $12M
D. None of these

Answers

Answer:

B. $10.1M

Explanation:

The capitalized cost of this investment is the present value of the cost that has just been incurred as well as the present of the replacement asset every 50 years.

The present value of cost incurred is the same as the amount incurred since it is stated in today's terms i.e $10M

The present value of replacement asset=replacement cost/50 year effective interest rate

In 50 years' time, the old sewage line would be sold for $2M and another bought of $10M, effectively replacement is $8M($10M-$2M)

the effective interest rate for 50 years=(1+9%)^50-1=7335.75%

capitalized cost of the sewage line=$10+$8/7335.75%

capitalized cost of the sewage line=$10.1M

What is the foundation of a career strategy?

Answers

Explanation:

i think its self-assessment

Answer:

The correct answer is C. A career goal

Explanation:

For all Plato users

Which answer best illustrates what trade-offs are?

Which answer best illustrates what trade-offs are?

Answers

Maria chose to do homework. Her grade will improve

The free enterprise system is a type of economy that?

Answers

Answer:

The governemnt doesnt have many restrictions on buisness, Business has a lot of say in government activity.

Explanation:

Answer:

prevents governments from interfering with businesses.

Explanation:

Which is not true of strategic alliances?

Answers

Question Completion with Options:

a. Strategic alliances refer to cooperative agreements between potential or actual competitors.

b. A firm that enters long-term alliances is expanding its strategic flexibility by committing to its alliance partners.

c. Strategic alliances bring together complementary skills and assets from each partner.

d. Joint venture is not a type of strategic alliances.

Answer:

d. Joint venture is not a type of strategic alliances.

Explanation:

A Joint venture is one of the strategic alliances that companies can form.  Other forms of strategic alliances include equity and nonequity strategic alliances.  In the first place, a strategic alliance is a corporate arrangement that enables two or more companies to undertake some mutually beneficial projects.  With the alliance, each company still retains its independence, knowledge and resources are shared, and new products and markets are developed.

How do these three rules apply to your life? Explain them in your words and try to think about how they relate to your financial situation. (Hint: Think about how you earn money and how you spend money, also imagine that you have been offered a credit card with a starting line of credit at $1000)

Rule 1 - Don't have debt rise faster than income, because the debt burden will eventually crush you

Rule 2 - Don't have income rise faster than productivity, because you will eventually become uncompetitive

Rule 3 - Do all that you can to raise your productivity, because in the long run that's what matters most

Answers

The three rules below will help individuals achieve financial stability and security, which is critical for living a happy and stress-free life. They can learn new skills, enroll in courses, read books, and so on to increase their productivity levels.

Rule 1: Don't have debt rise faster than income, because the debt burden will eventually crush you.To avoid falling into a debt trap, one should prioritize their spending. It's always a good idea to live within one's means and avoid spending more than they earn.Rule 2: Don't have income rise faster than productivity, because you will eventually become uncompetitive.It's a good idea to focus on increasing productivity to achieve long-term financial stability. One must avoid situations where they are not productive but are earning more money, as this can make them uncompetitive in the long run.Rule 3: Do all that you can to raise your productivity, because in the long run that's what matters most.Productivity is the most critical factor in achieving financial stability. Increasing productivity can lead to higher earnings, which can help you reach your financial goals faster.

Individuals must always make efforts to improve their productivity.  It's always a good idea to live within one's means, avoid unnecessary debt, increase productivity, and invest in oneself. In conclusion, the above three rules can be beneficial to anyone looking to achieve financial stability.

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Piedmont Company purchased merchandise on account from a supplier for $45000, terms 1/10, n/30. Piedmont Company returned $7000 of the merchandise and received full credit.If Piedmont Company pays the invoice within the discount period, what is the amount of cash required for the payment

Answers

Answer:

$33,500

Explanation:

The Cash Required for Payment to Supplier is The Purchases Price less Credit Allowance and Cash Discount granted since Piedmont Company pays the invoice within the discount period.

If Piedmont Company had paid invoice out of  the discount period we would only deduct the Credit Allowance from the Purchase Price.

Cash Required for Payment Calculation :

Purchase Price                                        $45,000

Less Credit Allowance                            ($7,000)

Less Cash Discount $45,000 x 10%      ($4,500)

Cash Required for Payment                   $33,500

How does a proportional taxation system work?
A. It makes wealthier citizens pay a higher percentage of their
income in taxes.
B. It makes less wealthy citizens pay a higher percentage of their
income in taxes.
C. It requires all citizens to pay all of their income in taxes for
redistribution.
D. It makes all citizens pay the same percentage of their income in
taxes.

Answers

Answer:

D. It makes all citizens pay the same percentage of their income in

taxes.

Explanation:

A proportional tax system imposes the same tax rate for all individuals regardless of the level of income. For example, if the tax rate is set at 5%, all taxpayers will be taxed at that rate. A person earning $10,000 will pay $500 (5% of 10,000) while the one earning $100,000 ( 5% of 5000)will pay $5,000.

A proportion tax system is also known as the Flat rate system. It is easy to compute and implement. The propositional tax system may appear to be fair because it treats all taxpayers equally and encourages people to earn more. However, it places a heavy tax burden on low-income earners.

Sandra is a printing equipment operator for a large catalog publisher. What might be one task that Sandra performs as part of her job?

A. changing the plates on the large printer
B. editing the advertisement’s wording
C. photographing pictures of the items for sale
D. delivering catalogs to various stores

Answers

b is ur answer for this question cause it’s more acutel

This chapter is all about trade--imports and exports and the balance of payments.

Answers

I just need for point

In preparing a company's statement of cash flows using the indirect method, the following information is available: Net income $ 52,000 Accounts payable decreased by 18,000 Accounts receivable increased by 25,000 Inventories increased by 5,000 Depreciation expense 30,000 Net cash provided by operating activities was:

Answers

Answer:

Cash flows from operating activities:

Net income                                                                          $52,000

Adjustments to net income:

Depreciation expense $30,000Accounts receivable increased by ($25,000)Inventories increased by ($5,000) Accounts payable decreased by ($18,000)             ($18,000)

Net cash flow provided by operating activities                $34,000

FIVE
Your company’s Chief Finance Officer (CFO) recently read about the notion that adjusting the capital
structure can increase the market value of a firm drastically. The CFO liked this idea and has asked you
to do a preliminary study on this issue; he will entertain any proposal to increase the debt of the company
up to a maximum debt /equity (D/E) ratio of 30 percent.
Your company is currently very conservative with its leverage and has a D/E ratio of only 10 percent.
You estimate the beta of your stock to be 1.05, based on the last five’s data. The marginal tax rate is 30
percent. The long –term Treasury bond rate is 8 percent and market risk premium is 5 percent.
From an investment banker, you obtain the approximate relationship between the pre-tax cost of debt and
the D/E ratio as follows
% in x 125 100 75 50 25 0 -25
% in y -25 0 25 50 75 100 125
Page 6 of 6
In addition from the statement of changes in cash flows, you found that Earnings before Interest and Tax
to be Sh. 120 Million, depreciation to be Sh. 10.5 million, Capital Spending to be Sh. 15 million and the
net working capital is zero. The growth rate on future cash flows is estimated to be constant at 6 percent
p.a.
Required
(i) What is the total market value of the firm today when D/E is 10 percent
(ii) What D/E ratio would you advise the firm

Answers

1. The total market value of the firm today when D/E is 10 percent is 492.15 million. 2.  we would advise the firm to increase its D/E ratio to 30 percent to maximize its market value.

1. To calculate the total market value of the firm today, we can use the following formula:

Total Market Value = Equity Value + Debt Value

Equity Value = Earnings before Interest and Tax (EBIT) * (1 - Tax Rate) / Cost of Equity

Debt Value = Debt * Cost of Debt

Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium

Cost of Debt can be estimated using the relationship provided in the question. When D/E ratio is 10 percent, the cost of debt is 10 percent.

Plugging in the values, we get:

Equity Value = 120 * (1 - 0.3) / (0.08 + 1.05 * 0.05) = 430.63 million

Debt Value = 0.1 * 430.63 / (1 - 0.3) = 61.52 million

Total Market Value = 430.63 + 61.52 = 492.15 million

(ii) To advise the firm on the optimal D/E ratio, we can use the formula for the weighted average cost of capital (WACC):

WACC = Weight of Equity * Cost of Equity + Weight of Debt * Cost of Debt * (1 - Tax Rate)

To maximize the firm's market value, we need to find the D/E ratio that minimizes the WACC.

We can use the provided relationship between the pre-tax cost of debt and the D/E ratio to estimate the cost of debt for different D/E ratios. We can then calculate the WACC for each D/E ratio using the formula above.

Plotting the estimated cost of debt and WACC against the D/E ratio, we can see that the minimum WACC occurs at a D/E ratio of 30 percent.

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Auto Shoppe is considering the purchase of a new engine computer code reader for $30,000. Auto Shoppe can charge $50 for the service of reading the codes from a single car engine, while the actual cost of the reading would only be $10 per car engine. Suppose that the manager of Auto Shoppe is concerned about this purchase, and has stated that if Auto Shoppe were to buy the new engine computer code reader, "..the machine needs to pay for itself by the time we use it to read the codes of 200 car engines." The manager says this is because, "…those sorts of engine computer code readers go out of date very quickly, so if we don’t get our money back soon, we will probably just wind up replacing the machine before it ever breaks even." What would Auto Shoppe need to charge for the service of reading each car engine, to just break-even when it reads the codes from 200 car engines?

Answers

Answer:

Auto Shoppe

For Auto Shoppe to just break-even when it reads the codes from 200 car engines, it would charge $160 for the service of reading each car engine.

Explanation:

a) Data and Calculations:

Fixed cost of new engine computer code reader = $30,000

Service charge for reading the code from a single car engine = $50

Variable cost of reading per car engine = $10

Number of engines to read their codes = 200

To break-even, total costs must equal total revenue

Total costs = Fixed costs + Variable costs

= $30,000 + $10 * 200

= $32,000

Therefore, revenue should be equal to $32,000

The amount to charge in order to break-even is:

= $160 ($32,000/200)

b) This implies that to break-even at $50 selling price, the number of engines should be increased to 750 ($30,000/$40).  This is because the contribution margin per unit = $40 ($50 - $10) and the fixed costs = $30,000.

Congratulations, you've won the lottery! The jackpot was $10,000,000, and you have an important choice to make. You can either take your winnings in annual payments of $500,000 spread out over 20 payments (with the first payment coming immediately and then at the end of each year for the next 19 years), or you can take a one-time payment of $6,600,000 right now. What is the present value of your winnings if you opt for the annual payments and the market interest rate is 5%

Answers

Answer:

$6,542,660.43

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow each year from year 0 to 19 = $500,000

I = 5%

PV = $6,542,660.43

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

You are the manager of a monopoly. Your analytics department estimates that a typical consumer’s inverse demand function for your firm’s product is P = 200 – 20Q, and your cost function is C(Q) = 80Q.
a. Determine the optimal two-part strategy pricing strategy.
b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?

Answers

A two-part pricing strategy is one that could be realistic or possible for a monopolist or a firm operating in a very imperfectly competitive market.

Specifically, the firm would be selling a homogeneous product to a more-or-less homogeneous clientele with similar demand curves.

What is a per-unit price?

Unit pricing is a pricing method by which buyers can evaluate the actual costs of products. A unit price is the price per unit of the product, which can be evaluated for any product, irrespective of how made. Unit pricing has important applications both in the corporate world and in consumer economics.

Therefore, the correct answer is as given above.

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Company xyz made the following transactions 6 marks
 Borrowed loan of ksh 50000 to start a business
 Obtained Ksh 150,000 in cash from proceeds of sales
 Paid out ksh 240000 in form of salaries
 Purchased Ksh 600000 worth of machinery in cash
 Purchased a track valued at Ksh 1, 500 000 by paying Ksh 300000 in cash and getting a
loan for the reminder
 Paid rent of rent of Ksh 80000 and advertising of ksh 50,000 in cash each
Determine the value of the company’s assets, liability and equity​

Answers

Answer:

Company XYZ

Total assets     ksh 1,030,000

Total liabilities ksh 1,250,000

Total equity      ksh (220,000)

Explanation:

a) Data and Analysis:

Cash ksh 50,000 Loan payable ksh 50,000

Cash ksh 150,000 Sales revenue ksh 150,000

Salaries expense ksh 240,000 Cash ksh 240,000

Equipment ksh 600,000 Cash ksh 600,000

Track ksh 1,500,000 Cash ksh 300,000 Loan payable ksh 1,200,000

Rent Expense ksh 80,000 Advertising Expense ksh 50,000 Cash ksh 130,000

Assets:

Cash                    ksh 50,000

Cash                  ksh 150,000

Cash                ksh (240,000)

Equipment        ksh 600,000

Cash                ksh (600,000)

Track              ksh 1,500,000

Cash               ksh (300,000)

Cash                ksh (130,000)

Total assets  ksh 1,030,000

Liabilities:

Loan payable       ksh 50,000

Loan payable  ksh 1,200,000

Total liabilities ksh 1,250,000

Equity:

Sales revenue                ksh 150,000

Salaries expense         ksh (240,000)

Rent Expense                ksh (80,000)

Advertising Expense    ksh (50,000)

Total equity                ksh (220,000)

The following income statement is provided for Ramirez Company for the current year: Sales revenue (3,500 units × $21.00 per unit) $ 73,500 Cost of goods sold (variable; 3,500 units × $9.00 per unit) (31,500 ) Cost of goods sold (fixed) (5,000 ) Gross margin 37,000 Administrative salaries (7,000 ) Depreciation (5,000 ) Supplies (3,500 units × $3.00 per unit) (10,500 ) Net income $ 14,500 What amount was the company's contribution margin?

Answers

Answer:

Contribution margin = $31,500

Explanation:

Given:

Sales revenue (3,500 units × $21.00 per unit) = $73,500

Cost of goods sold (variable: 3,500 units × $9.00 per unit) = $31,500

Supplies (3,500 units × $3.00 per unit) = $10,500

Find:

Contribution margin

Computation:

Contribution margin = Sales Revenue - Variable cost - Supplies

Contribution margin = $73,500 - $31,500 - $10,500

Contribution margin = $31,500

Lynda is teaching her client proper workflow

Answers

Answer:

The correct option is (A) Purchase order > Pay bill

Explanation:

Since in the given scenario, it is mentioned tha lynda is teaching her customer so the proper workflow would be purchase order and after that pay bill

As the vendor is the person who engage in the process of the supply chain for making the products so for this the vendor would charge the amount

Here the purchase order means the order that issued to the vendor in which the desciption of the product is mentioned in terms of type, quantity and agreed price

And, the payment would be made when the goods are received physically

So, the correct option is (A) Purchase order > Pay bill

Lynda is teaching her client proper workflow

Final Assessment: Question 1 of 10
Which of the following is NOT one of the Principles of the Global
Principles of Business Conduct (Global Code)?
Select the best answer.
? Professional development and support
? Social responsibility
? Respect, diversity, and fair treatment
?) Accountability

Answers

Respect, diversity, and fair treatment are NOT one of the Principles of the Global Principles of Business Conduct. Thus option C is correct.

What is the global code of the product?

A defined set of guidelines for our professional behavior is provided through our global code of conduct. It offers the moral and social guidelines as to which we based our informed decision. All of what we do is supported by the Code, which is rooted in our values and principles.

The Global Business Standards do not list the Self-Respect Principle as one of their leading concepts. There are a number of fundamental ethical precepts on which there is broad agreement, including honesty, honoring promises, avoiding harm, helping those who are in need, respecting human and civil rights, and ideals of justice and equality. Therefore, option C is the correct option.

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a. Suppose the marginal propensity to consume (MPC) for a nation is 0.67. What is the tax multiplier for this nation

Answers

Assuming the marginal propensity to consume (MPC) for a nation is 0.67. The tax multiplier for this nation is: 2.03.

Tax multiplier

Using this formula

Tax multiplier=-MPC/1-MPC

Where:

Marginal propensity to consume (MPC)=0.67

Let plug in the formula

Tax multiplier=0.67/1-0.67

Tax multiplier=0.67/0.33

Tax muitiplier=2.03

Inconclusion the tax multiplier for this nation is: 2.03.

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Three important forms of financing long-term (capital) expenditures are:
O a. Accounts payable, notes payable, and cimmercial paper
O b.trade credit, bank loans, and commercial paper
O c. trade credit, accounts payable, and bank loans
O d. term loans, mortgage loans, and bonds

Answers

Answer:

O d. term loans, mortgage loans, and bonds

Explanation:

Term loans are credit facilities where the lender and borrower agree on the loan amount and a repayment schedule. It involves a large sum of money to be repaid over a long period making it ideal for acquiring capital.

Mortgage loans are long term debts used to finance the purchase of properties. It is ideal for expensive capital due to the lengthy time it takes to repay.

Bonds are long-term debt securities issued by corporations to finance long term projects.

STEP 5 Use practical examples from BRICK 'n TILE to differentiate between short and long-run costs. (10) TOTAL: [50]​

Answers

BRICK 'n TILE, a hypothetical company, can differentiate between short-run and long-run costs by considering examples such as immediate production costs (short-run) and investment in new production facilities (long-run).

Short-run costs refer to expenses that a company incurs in the immediate period, where some factors of production are fixed and cannot be easily adjusted. In the case of BRICK 'n TILE, short-run costs could include the costs of raw materials, labor, utilities, and maintenance for their existing production facilities. These costs are essential for the day-to-day operations and can be directly linked to the current level of production.

On the other hand, long-run costs encompass expenses that can be adjusted in the long term to adapt to changes in production levels and scale. For BRICK 'n TILE, an example of a long-run cost would be the investment in new production facilities or equipment. If the company decides to expand its operations or increase its capacity, they may need to construct a new manufacturing plant or purchase advanced machinery. These costs are incurred over an extended period and are associated with strategic decisions that affect the company's production capabilities in the long run.

Differentiating between short-run and long-run costs is crucial for effective financial planning and decision-making. Short-run costs help determine the immediate profitability of the company's operations, while long-run costs factor in the potential growth and expansion strategies. Understanding the distinction between these cost categories allows BRICK 'n TILE to make informed decisions regarding short-term production levels and long-term investment in infrastructure and technology.

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Determine the missing amount:
Assets=Liabilities+owners Equity x 272000 573000

Answers

Based on the given amounts of assets and liabilities, the missing amount of Owner's equity is $301,000

How to find the equity?

The Owners equity is one of the parts of the Accounting equation which is:

Assets = Liabilities + Owners Equity

The Assets in this instance is $573,000 and the Liabilities are $272,000.

The Owner's equity is the missing amount and it can be found as:

573,000 = 272,000 + Owners Equity

Owners Equity = 573,000 - 272,000

Owners Equity = $301,000

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On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,000,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows:



Date Spot Rate Forward Rate
(to January 31, 2021)
October 1, 2020 $ 0.25 $ 0.29
December 31, 2020 0.28 0.31
January 31, 2021 0.30 N/A


Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored.



Prepare journal entries for the foreign currency forward contract, foreign currency firm commitment, and export sale.
Determine the net benefit, if any, realized by Mertag from entering into the forward contract.

Answers

Answer: JANUARYYYYYYYYYYYYYYYYYYY

Explanation:

Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months SO IT WILL BE JANUARYYYY

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1. The industrial wood planers currently valued at $58,000 each were purchased two years ago for $65,000 each. The company plans to keep them for six more years. Jasmine uses the straight-line method to determine the depreciation for these machines. Be sure to follow FASB


a. What is the salvage value of each planner, and how is this amount determined? (2 points)

Answers

The salvage value of each planner is $23,000 and this is derived by first calculating the depreciation amount which is then deducted from Original cost of the asset.

How do we calculate our salvage value?

The salvage value of each industrial wood planer is the estimated value of the machine at the end of its useful life, after it has been fully depreciated. It is determined by subtracting the accumulated depreciation from the original cost of the asset.

In Jasmine's case, using the straight-line method of depreciation, the annual depreciation for each machine is calculated as follows:

$65,000 - $58,000 = $7,000 (depreciation per year)

The company plans to keep the machines for six more years, so the total amount of accumulated depreciation would be:

$7,000 x 6 = $42,000

Therefore, the estimated salvage value of each industrial wood planer would be:

= $65,000 - $42,000

= $23,000

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Sources of monopoly power A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero The main way it retains its market power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario.
Exclusive
Ownership Government-
of a Key Created Economies
Resource Monopolies of Sale
Patents are granted to inventors of a product
or process for a certain number of years. The
reason for this is to encourage innovation in the
economy. Without the existence of patents, it is
argued, research and development for improved
electronics is unlikely to take place, since there’s
nothing preventing another firm from stealing the
idea, copying the product, and producing it without
incurring the development costs.
Throughout much of the 20th century, many people
viewed South Africa’s De Beers Group as a monopoly
because it controlled a large percentage of diamond
production and sales.
In the electricity industry, low average total costs are
obtained only through large-scale production. In other
words, the initial cost of setting up all the necessary
wiring makes it risky and, most likely, unprofitable for
competitors to enter the market.

Answers

Answer:

1. Patents are granted to inventors of a product or process for a certain number of years. The reason for this is to encourage innovation in the economy. Without the existence of patents, it is argued, research and development for improved electronics is unlikely to take place, since there’s nothing preventing another firm from stealing the idea, copying the product, and producing it without incurring the development costs.

Government Created Monopoly.

Patents protect the intellectual property of a person or entity and prevent others from taking it and using it without rewarding the people who came up with it. The owners of the parents are able to dictate the selling of the resource and as such have a monopoly over it. Patents are granted by the government which makes this a Government created Monopoly.

2. Throughout much of the 20th century, many people viewed South Africa’s De Beers Group as a monopoly because it controlled a large percentage of diamond production and sales.

Ownership of Key Economic Resource.

As early as 1902, De Beers controlled 90% of the world's diamond production and under the leadership of J P Morgan, consolidated control over the diamond industry. They controlled many mines and also bought diamonds from other producers allowing them to control the diamond trade. Even though their control has waned of late, they still control around 35% of the world's diamond production which is a very significant percentage.

3. In the electricity industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary wiring makes it risky and, most likely, unprofitable for competitors to enter the market.

Economies of Scale

To survive in the Electricity industry the company would need to have an extensive network to permit them to benefit from Economies of Scale. This can be very difficult to set up so companies stay away from the industry thereby creating a monopoly for those already in it.

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