Key Data

11. Consider whether each of the following events is likely to increase or decrease real GDP. In each case, do you think the well-being of the average person in society most likely changes in the same direction as real GDP? Why or why not?

a. A hurricane in Florida forces Disney World to shut down for a month.

b. The discovery of a new, easy-to-grow strain of wheat increases farm harvests.

c. Increased hostility between unions and management sparks a rash of strikes.

d. Firms throughout the economy experience falling demand, causing them to lay off workers.

e. Congress passes new environmental laws that prohibit firms from using production methods that emit large quantities of pollution.

f. More high school students drop out of school to take jobs mowing lawns.

g. Fathers around the country reduce their workweeks to spend more time with their children.

DataWeb reported the following in the most recent year of operations:

Compute the Price-earnings ratio (P/E), dividend yield (DY) and dividend payout ratio (PAYO).

The following data pertain to Marseilles Labs:

In the month of sales, one-quarter (25%) are cash and the other 75% are sold on credit, and collected in the following month.

Compute Marseilles Labs cash receipts in September.

Assume you have to find the optimal commodity tax rate for all the goods in an economy featuring only 17 goods. How many first order conditions would you have to find in your DWL minimisation problem?

Question 3

Partially correct

Mark 54.34 out of 98.00

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Developing a Master Budget
for a Merchandising Organization
Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2010.

Actual and forecasted sales for selected months in 2010 are as follows:

Monthly operating expenses are as follows:

Cash dividends of $17,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $4,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.

• Part A
• Part B
• Part C
• Part D
• Part E
• Part F

(c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2010. Do not include repayments of borrowings.

(d) Prepare a cash budget for each month of the second quarter ending June 30, 2010. Include budgeted borrowings and repayments.

Only use negative signs, if needed, for: excess receipts over disbursements, balance before borrowings and cash balances (beginning and ending).

(e) Prepare an income statement for each month of the second quarter ending June 30, 2010.

Only use negative signs to show net losses in income.

(f) Prepare a budgeted balance sheet as of June 30, 2010.

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 5,600 8,600 7,600 6,600 In addition, 6,600 grams of raw materials inventory is on hand at the start of the 1st quarter and the beginning accounts payable for the 1st quarter is $3,480. Each unit requires 8.60 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th quarter is 8,600 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labour-hours and direct labourers are paid $10.30 per hour. Required: 1. Prepare the company’s direct materials purchases budget and schedule of expected cash disbursements for materials for the upcoming fiscal year. 2. Prepare the company’s direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecast number of units produced.

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 7,500 grams of raw materials inventory is on hand at the start of the 1st quarter and the beginning accounts payable for the 1st quarter is $4,380.

Each unit requires 9.50 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desired ending inventory for the 4th quarter is 9,500 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labour-hours and direct labourers are paid $8.50 per hour.

Required:
1. Prepare the company’s direct materials purchases budget and schedule of expected cash disbursements for materials for the upcoming fiscal year.

2. Prepare the company’s direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecast number of units produced.

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 6,300 grams of raw materials inventory is on hand at the start of the 1st quarter and the beginning accounts payable for the 1st quarter is $3,180.

Each unit requires 8.30 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 40% of the following quarter’s production needs. The desired ending inventory for the 4th quarter is 8,300 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labour-hours and direct labourers are paid $10.90 per hour.

Required:
1. Prepare the company’s direct materials purchases budget and schedule of expected cash disbursements for materials for the upcoming fiscal year.

2. Prepare the company’s direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecast number of units produced.

How do the two articles below address the dividend discount model and show changes from original estimations to later estimations based on first quarter results? Any analysis of these two articles would be greatly appreciated so I may better understand the DDM.

The first article was written in April of 2018 and the second was written in July 2018.

April 2018 Article: https://seekingalpha.com/article/4166249-mcdonalds-corporation-target-price-147-according-dividend-discount-model

July 2018 Article: https://seekingalpha.com/article/4189029-mcdonalds-current-valuation-view?page=2

Consider the following statements regarding how government spending responds to changes in aggregate income, wealth, and interest rates.

A. Government spending responds directly to changes in aggregate income, wealth, and interest rates. Changes in aggregate income, wealth, and interest rates automatically cause government spending to change.

B. Government spending does not respond directly or indirectly to changes in aggregate income, wealth, or interest rates. Changes in aggregate income, wealth, and interest rates do not have any effect on government spending.

C. Government spending responds indirectly to changes in aggregate income, wealth, or interest rates. During a recession, aggregate income and wealth will fall and the government may decide to increase government spending to stimulate output and jobs in the economy.

Which of the statements are true?

Statements A and B

Statement C

Statement A

Statement B