Calculate a​ one-year holding period return​ (HPR) for the following two investment​ alternatives: Which investment would you​ prefer, assuming they are of equal​ risk? Explain. The HPR for investment X is nothing​%. ​ (Enter as a percentage and round to two decimal​ places.)

Periodic inventory by three methods; cost of goods sold

The units of an item available for sale during the year were as follows:

There are 208 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the ending inventory cost and the cost of goods sold by three methods.

6-)

A budget is not intended to help you determine

Select one:

a. how much money you will have at the end of each month.

b. a plan for spending all of your income on current needs.

c. how much you can allocate for the future.

d. how to prevent excessive spending to achieve financial goals.

10-)

Which of the following will likely increase the premium of long-term care insurance?

Select one:

a. Waiting until you are retired to obtain the insurance

b. Having a longer waiting period before the policy goes into effect

c. Having a co-insurance provision

d. Choosing to receive benefits for a limited period

11-)

Stopping payment on a cheque

Select one:

a. is possible after the cheque clears in cases of disputes.

b. is free if your cheque book is lost or stolen.

c. can only be accomplished if the cheque has not cleared.

d. is a service frequently provided to most customers.

you must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a $500,000 investment and is expected to yield annual net income of $70,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $44,000. Compute the return on investment for each Fast & Great Burgers alternative. Using return on investment as your only criterion, which location (A or B) should the company open? (The chain currently generates an 22% return on total assets.)

Required information

[The following information applies to the questions displayed below.]

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).

1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?
2. Assume a target income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?
3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?

Problem 11-6AA Entries for payroll transactions LO P2, P3, P5

Francisco Company has 20 employees, each of whom earns $3,000 per month and is paid on the last day of each month. All 20 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general ledger:

FICA—Social Security Taxes Payable, $7,440; FICA—Medicare Taxes Payable, $1,740. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only.)

Employees' Federal Income Taxes Payable, $15,000 (liability for February only).

Federal Unemployment Taxes Payable, $720 (liability for January and February together).

State Unemployment Taxes Payable, $4,800 (liability for January and February together).

During March and April, the company had the following payroll transactions.

* FICA taxes are Social Security and Medicare, respectively.

Required:
Prepare journal entries to record the transactions and events for both March and April. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Journal entry worksheet

1. Mar 15. Record the cash payment of FICA (employees' and employer's) and employee income taxes of the month of February.

2. Mar 31. Record the (employee) payroll expenses and liabilities for the month of March.

3. Mar 31. Record the payment of payroll for March.

4. Mar 31. Record the employer’s payroll expenses and liabilities for the month of March.

5. Apr 15. Record the cash payment of FICA (employees' and employer's) and employee income taxes of the month of March.

6. Apr 15. Record the cash payment of SUTA taxes for the months of January, February and March.

7. Apr 30. Record the cash payment of FUTA taxes for the first quarter of the year.

8. Apr 30. Record the filing of Form 941 to the IRS, reporting the FICA taxes and the employees’ federal income tax withholdings for the first quarter.

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.25 direct labor-hours and direct laborers are paid $13.00 per hour.

In addition, the variable manufacturing overhead rate is $1.80 per direct labor-hour. The fixed manufacturing overhead is $87,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $27,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

Required 1:

Required 2&3:

Unipart, a manufacturer of auto parts, is considering two B2B (Business-to-Business) marketplaces to purchase its MRO (Maintenance, Repair, and Operating) supplies. Both marketplaces offer a full line of supplies at very similar prices for products and shipping. Both provide similar service levels and lead times. However, their fee structures are quite different. The first marketplace, Parts4u.com, sells all of its products with a 5 percent commission tacked on top of the price of the product (not including shipping). AllMRO.com’s pricing is based on a subscription fee of $10 million that must be paid up front for a two-year period and a commission of 1 percent on each transaction’s product price. Unipart spends about $150 million on MRO supplies each year, although this varies with their utilization. Next year will likely be a strong year, in which high utilization will keep MRO spending at $150 million. However, there is a 25 percent chance that spending will drop by 10 percent. The second year, there is a 50 percent chance that the spending level will stay where it was in the first year and a 50 percent chance that it will drop by another 10 percent. Unipart uses a discount rate of 20 percent. Assume all costs are incurred at the beginning of each year (so Year 1 costs are incurred now, and Year 2 costs are incurred in a year). From which B2B marketplace should Unipart buy its parts? (Hint: calculate the NPV cost incurred) PROCEDURE NEEDED (Excel or Paper Calculations)

Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020. 1. Larkspur Co. has developed the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 2025 Taxable amounts $400 $400 $400 $400 $400 Deductible amount — — — (2,200 ) 2. Cullumber Co. has the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 Taxable amounts $400 $400 $400 $400 Deductible amount — — (2,300 ) — Both Larkspur Co. and Cullumber Co. have taxable income of $3,900 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities. 1. Compute the net amount of deferred income taxes to be reported at the end of 2020, and indicate how it should be classified on the balance sheet for situation one.

2. Compute the net amount of deferred income taxes to be reported at the end of 2020, and indicate how it should be classified on the balance sheet for situation two.

Please describe the concept of investment spending, as well as what will happen to the aggregate demand curve if investment spending is increased autonomously. Also provide an example of spending that a macroeconomist would consider “investment spending.”

Identify the correct statement.

When interest rates fall, the firm’s cost of raising funds through bonds increases.

It is absolutely compulsory for the government to earn a profitable return on the money it earns by selling bonds.

When government borrowing rises, interest rates decline, thereby driving up private investment.

An increase in interest rate reduces the cost of borrowing by the firms.

When interest rates rise, fewer number of corporations offer new bonds to raise investment funds.

Assume that French budget deficits have raised the French prime interest rate relative to the U.S. T-bill rate. As a result, we would expect the U.S. dollar to depreciate and the U.S. net exports to rise.

True

False

Starting with a situation where there is a substantial budget deficit, when tax revenues grow faster than federal expenditures, the government will experience:

a declining budget deficit.

a declining budget surplus.

a balanced budget.

an increasing budget deficit.

an increasing national debt.

The ratio of U.S. government spending to GDP reached its peak during:

the Great Depression.

the bursting of the stock market bubble.

World War I.

World War II.

the real estate crisis.

When the price level increases, the effect of a change in government spending on real GDP will be understated.

True

False

A decrease in federal income tax rates is an example of fiscal policy that affects GDP through consumption adjustments.

True

False

Which of the following would not be considered an indirect tax?

A tax on the income of a computer manufacturer

A sales tax on cigarettes

A value-added tax

A tax on imported automobiles

A tax on wheat export

Which of the following is true of fiscal policy before the Great Depression of the 1930s?

Fiscal policy was made at the federal level.

The federal budget was determined mostly by economists and not by politicians.

National defense and foreign trade were the focus areas of the federal government while other areas of government policy were dealt by individual states.

Policies associated with national defense were made at the state level.

Environmental degradation and education were the focus areas of the federal government while other areas of government policy were dealt by individual states.

Under a progressive tax system:

the average tax rate remains constant with changes in real GDP.

the average tax rate increases with increases in real GDP.

government tax receipts increase when the economy is in a recession.

the average tax rate falls with increases in real GDP.

government tax receipts decrease when the economy is expanding.

Which of the following is a form of a direct tax?

Personal income tax

Value-added tax

Sales tax

Import tariff

Excise duty

Compared to the government in a typical industrial country, the government in a typical developing country:

plays a larger role in investment spending.

plays the same role in investment spending.

plays a smaller role in investment spending.

plays a more negative role in investment spending.

plays no role in investment spending.

A higher U.S. federal budget deficit may act to raise future U.S. interest payments to foreigners.

True

False

Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $25 million.

0.2

5

2

0.5

6

Which of the following will be observed if the U.S. federal government reduces fiscal spending, keeping other things constant?

The economy will approach potential GDP.

The aggregate expenditure in the economy will decrease.

The marginal propensity to consume will increase.

The average price level will increase.

The aggregate demand curve will shift to the right.

Which of the following statements is true of government spending?

An increase in government spending shifts the aggregate demand curve downward by a fraction of the rise in government spending.

Government spending is a part of monetary policy, not fiscal policy.

A decline in government spending brings about an expansion in the economy.

An increase in government spending raises the equilibrium level of income by a multiple of the original spending increase.

An increase in government spending increases the recessionary gap in the economy.

According to Ricardian equivalence, taxation and government borrowing have the same effect on spending in the private sector.

True

False

If Joe earns $80,000 per year and pays $20,000 in taxes, while Moe earns $100,000 and pays $22,000 in taxes, their tax system would best be described as:

discretionary.

regressive.

progressive.

lump-sum.

proportional.

If crowding out exists, contractionary fiscal policy will cause the aggregate demand curve to shift in by more than indicated by the government spending multiplier.

True

False

Suppose the Congress enacts a 5 percent decrease in annual military expenditures. Other things equal, this can be associated with:

a movement up along the aggregate demand curve.

a movement down along the aggregate demand curve.

a leftward shift of the aggregate demand curve.

a rightward shift of the aggregate demand curve.

a change in the slope of the aggregate demand curve.

_____, the lesser will be the effect of an increase in government spending on real GDP.

The steeper the aggregate supply curve

The smaller the crowding-out effect

The more rapidly money is converted into goods

The smaller the percentage of government spending financed by tax increases

The larger the government budget surplus

The U.S. government deficit as a percentage of GDP was much larger during World War II than it was in the 1980s and 1990s.

True

False

If all U.S. government bonds are held by U.S. citizens, then:

there is no tax liability for funding the U.S. government’s debt.

the tax rates are not increased to repay the outstanding debts.

there is no net change in national wealth when the national debt changes.

the bondholders will not earn interest on the bonds.

the tax liability for funding the debt is not offset by the interest earnings of bondholders.