In the short-run, production should be stopped whenever: a. Expected selling price is less than average total cost. b. Expected selling price is less than average variable cost. c. Expected selling price is equal to marginal revenue. d. Expected selling price is greater than average total cost.
In: Economics
) Explain any two of the following statements with economic reasoning and appropriate diagram(s) a. A competitive firm’s supply curve in the short-run is a segment of MC curve. b. The long-run equilibrium of a perfectly competitive firm is both productively and allocatively efficient. c. A marginal revenue curve of a monopolist lies below the demand curve
.
In: Economics
2. If the demand function for X is Q = 100 - P, and the supply function for X is Q = 40 + 2P, determine the effects on: (a) equilibrium price, (b) quantity traded and (c) government revenue (or cost) if:
In: Economics
a) Derive the short-term cost function from the production
function.
b) What is the relationship between cost and supply function?
c) Show that when profit is maximized, a company chooses the
production quantity, where marginal revenue and marginal cost are
the same.
d) Show the market result in the case of a monopoly with deadweight
loss that goes with it.
In: Economics
Suppose that for ABC Company we have the following functions:
Inverse Demand Function: P = 360 - 0.8Q
Cost Function: 120 + 200Q
Marginal Revenue Function (MR) = 360 – 1.6Q
Marginal Cost (MC) = 200
Determine quantity (Q) and price (P) that maximizes profit for ABC Company. Show your calculations.
In: Economics
Companies come for campus placement where through interview
they
try to estimate the candidate’s future marginal revenue product
and
after the process decide the salary. After one year’s performance
(or
any decided tenure), the candidate is either promoted or sacked.
What
economic calculations are taken in account to arrive at the
decision?
Explain the answer in detail.
In: Economics
1) Explain external competitiveness.
2) What are the factors that influence decisions on pay level and pay mix?
3) What are the basic assumptions of labor market theories?
4) What is the significance of marginal revenue?
5) According to efficiency-wage theory, how do increased wages increase efficiency and lower labor costs?
In: Operations Management
Generally Accepted Accounting Principles: This question post with a minimum 100-word count requirement.This week we have learned about four of the generally accepted accounting principles – revenue recognition, expense recognition, the matching principle, and the historical cost principle. Briefly explain what is meant by each of these and how they are applied to accrual accounting.
In: Accounting
Income statements and balance sheets follow for Microsoft Corporation and Apple Inc. Refer to these financial statements to answer the requirements.
|
MICROSOFT CORPORATION Income Statements For the years ended June 30, |
||
|
(in millions) |
2016 |
2015 |
|
Revenue |
||
|
Product |
$61,502 |
$75,956 |
|
Service |
23,818 |
17,624 |
|
Total revenue |
85,320 |
93,580 |
|
Cost of revenue |
||
|
Product |
17,880 |
21,410 |
|
Service and other |
14,900 |
11,628 |
|
Total cost of revenue |
32,780 |
33,038 |
|
Gross margin |
52,540 |
60,542 |
|
Research and development |
11,988 |
12,046 |
|
Sales and marketing |
14,697 |
15,713 |
|
General and administrative |
4,563 |
4,611 |
|
Impairment, integration, and restructuring |
1,110 |
10,011 |
|
Operating income |
20,182 |
18,161 |
|
Dividends and interest income |
903 |
766 |
|
Interest expense |
(1,243) |
(781) |
|
Other income (expense), net |
(91) |
361 |
|
Income before taxes |
19,751 |
18,507 |
|
Provision for income taxes |
2,953 |
6,314 |
|
Net income |
$16,798 |
$ 12,193 |
Continued next page
|
MICROSOFT CORPORATION Balance Sheet As of June 30, |
||
|
(in millions) |
2016 |
2015 |
|
Current assets: |
||
|
Cash and cash equivalents |
$ 6,510 |
$ 5,595 |
|
Short-term investments |
106,730 |
90,931 |
|
Accounts receivable, net |
18,277 |
17,908 |
|
Inventories |
2,251 |
2,902 |
|
Other current assets |
5,892 |
5,461 |
|
Total current assets |
139,660 |
122,797 |
|
Property and equipment, net |
18,356 |
14,731 |
|
Equity and other investments |
10,431 |
12,053 |
|
Goodwill |
17,872 |
16,939 |
|
Intangible assets, net |
3,733 |
4,835 |
|
Other long-term assets |
3,642 |
3,117 |
|
Total assets |
$193,694 |
$174,472 |
|
Current liabilities: |
||
|
Accounts payable |
$ 6,898 |
$ 6,591 |
|
Short-term debt |
12,904 |
4,985 |
|
Current portion of long-term debt |
0 |
2,499 |
|
Accrued compensation |
5,264 |
5,096 |
|
Income taxes |
580 |
606 |
|
Short-term unearned revenue |
27,468 |
23,223 |
|
Other current liabilities |
6,243 |
6,647 |
|
Total current liabilities |
59,357 |
49,647 |
|
Long-term debt |
40,783 |
27,808 |
|
Long-term unearned revenue |
6,441 |
2,095 |
|
Deferred income taxes |
1,476 |
1,295 |
|
Other long-term liabilities |
13,640 |
13,544 |
|
Total liabilities |
121,697 |
94,389 |
|
Stockholders' equity: |
||
|
Common stock and paid-in capital |
68,178 |
68,465 |
|
Retained earnings |
2,282 |
9,096 |
|
Accumulated other comprehensive income |
1,537 |
2,522 |
|
Total stockholders' equity |
71,997 |
80,083 |
|
Total liabilities and stockholders' equity |
$193,694 |
$ 174,472 |
Continued next page
|
Apple Inc. Consolidated Statement of Operations |
||
|
Fiscal year ended |
||
|
(in millions) |
Sept. 24, 2016 |
Sept. 26, 2015 |
|
Net sales |
$ 215,639 |
$ 233,715 |
|
Cost of sales |
131,376 |
140,089 |
|
Gross margin |
84,263 |
93,626 |
|
Operating expenses |
||
|
Research and development |
10,045 |
8,067 |
|
Selling, general and administrative |
14,194 |
14,329 |
|
Total operating expenses |
24,239 |
22,396 |
|
Operating income |
60,024 |
71,230 |
|
Interest and dividend income |
3,999 |
2,921 |
|
Interest expense |
(1,456) |
(733) |
|
Other expense, net |
(1,195) |
(903) |
|
Income before provision for income taxes |
61,372 |
72,515 |
|
Provision for income taxes |
15,685 |
19,121 |
|
Net income |
$ 45,687 |
$ 53,394 |
Apple Inc. Consolidated Balance Sheets |
||
|
As of |
||
|
(in thousands) |
Sept. 24, 2016 |
Sept. 26, 2015 |
|
Cash and cash equivalents |
$ 20,484 |
$ 21,120 |
|
Short-term investments |
46,671 |
20,481 |
|
Accounts receivable, net |
15,754 |
16,849 |
|
Inventories |
2,132 |
2,349 |
|
Other current assets |
21,828 |
28,579 |
|
Total current assets |
106,869 |
89,378 |
|
Long-term marketable securities |
170,430 |
164,065 |
|
Property plant and equipment, net |
27,010 |
22,471 |
|
Goodwill |
5,414 |
5,116 |
|
Acquired intangible assets, net |
3,206 |
3,893 |
|
Other assets |
8,757 |
5,422 |
|
Total assets |
321,686 |
290,345 |
Table continued next page
Table continued
Apple Inc. Consolidated Balance Sheets—continued |
||
|
As of |
||
|
(in thousands) |
Sept. 24, 2016 |
Sept. 26, 2015 |
|
Accounts payable |
37,294 |
35,490 |
|
Accrued expenses |
22,027 |
25,181 |
|
Deferred revenue |
8,080 |
8,940 |
|
Current portion of LT debt and short-term debt |
11,605 |
10,999 |
|
Total current liabilities |
79,006 |
80,610 |
|
Deferred revenue – non-current |
2,930 |
3,624 |
|
Long-term debt |
75,427 |
53,329 |
|
Other non-current liabilities |
36,074 |
33,427 |
|
Total liabilities |
193,437 |
170,990 |
|
Stockholders’ equity |
||
|
Common stock no par value |
31,251 |
27,416 |
|
Retained earnings |
96,364 |
92,284 |
|
Accumulated other comprehensive income (loss) |
634 |
(345) |
|
Total stockholders’ equity |
128,249 |
119,355 |
|
Total liabilities and stockholders’ equity |
$ 321,686 |
$ 290,345 |
Required:
a. Compute the current ratio and quick ratio for both firms for fiscal 2016. Compare the ratios and determine which company is more liquid.
b. Compute the times interest earned and liabilities-to-equity ratios for both firms for fiscal 2016. Which company is more solvent?
c. Do you have any concerns about either company’s ability to meet its debt obligations? Explain.
In: Accounting
Income statements and balance sheets follow for Microsoft Corporation and Apple Inc. Refer to these financial statements to answer the requirements.
|
MICROSOFT CORPORATION Income Statements For the years ended June 30, |
||
|
(in millions) |
2016 |
2015 |
|
Revenue |
||
|
Product |
$61,502 |
$75,956 |
|
Service |
23,818 |
17,624 |
|
Total revenue |
85,320 |
93,580 |
|
Cost of revenue |
||
|
Product |
17,880 |
21,410 |
|
Service and other |
14,900 |
11,628 |
|
Total cost of revenue |
32,780 |
33,038 |
|
Gross margin |
52,540 |
60,542 |
|
Research and development |
11,988 |
12,046 |
|
Sales and marketing |
14,697 |
15,713 |
|
General and administrative |
4,563 |
4,611 |
|
Impairment, integration, and restructuring |
1,110 |
10,011 |
|
Operating income |
20,182 |
18,161 |
|
Dividends and interest income |
903 |
766 |
|
Interest expense |
(1,243) |
(781) |
|
Other income (expense), net |
(91) |
361 |
|
Income before taxes |
19,751 |
18,507 |
|
Provision for income taxes |
2,953 |
6,314 |
|
Net income |
$16,798 |
$ 12,193 |
|
MICROSOFT CORPORATION Balance Sheet As of June 30, |
||
|
(in millions) |
2016 |
2015 |
|
Current assets: |
||
|
Cash and cash equivalents |
$ 6,510 |
$ 5,595 |
|
Short-term investments |
106,730 |
90,931 |
|
Accounts receivable, net |
18,277 |
17,908 |
|
Inventories |
2,251 |
2,902 |
|
Other current assets |
5,892 |
5,461 |
|
Total current assets |
139,660 |
122,797 |
|
Property and equipment, net |
18,356 |
14,731 |
|
Equity and other investments |
10,431 |
12,053 |
|
Goodwill |
17,872 |
16,939 |
|
Intangible assets, net |
3,733 |
4,835 |
|
Other long-term assets |
3,642 |
3,117 |
|
Total assets |
$193,694 |
$174,472 |
|
Current liabilities: |
||
|
Accounts payable |
$ 6,898 |
$ 6,591 |
|
Short-term debt |
12,904 |
4,985 |
|
Current portion of long-term debt |
0 |
2,499 |
|
Accrued compensation |
5,264 |
5,096 |
|
Income taxes |
580 |
606 |
|
Short-term unearned revenue |
27,468 |
23,223 |
|
Other current liabilities |
6,243 |
6,647 |
|
Total current liabilities |
59,357 |
49,647 |
|
Long-term debt |
40,783 |
27,808 |
|
Long-term unearned revenue |
6,441 |
2,095 |
|
Deferred income taxes |
1,476 |
1,295 |
|
Other long-term liabilities |
13,640 |
13,544 |
|
Total liabilities |
121,697 |
94,389 |
|
Stockholders' equity: |
||
|
Common stock and paid-in capital |
68,178 |
68,465 |
|
Retained earnings |
2,282 |
9,096 |
|
Accumulated other comprehensive income |
1,537 |
2,522 |
|
Total stockholders' equity |
71,997 |
80,083 |
|
Total liabilities and stockholders' equity |
$193,694 |
$ 174,472 |
|
Apple Inc. Consolidated Statement of Operations |
||
|
Fiscal year ended |
||
|
(in millions) |
Sept. 24, 2016 |
Sept. 26, 2015 |
|
Net sales |
$ 215,639 |
$ 233,715 |
|
Cost of sales |
131,376 |
140,089 |
|
Gross margin |
84,263 |
93,626 |
|
Operating expenses |
||
|
Research and development |
10,045 |
8,067 |
|
Selling, general and administrative |
14,194 |
14,329 |
|
Total operating expenses |
24,239 |
22,396 |
|
Operating income |
60,024 |
71,230 |
|
Interest and dividend income |
3,999 |
2,921 |
|
Interest expense |
(1,456) |
(733) |
|
Other expense, net |
(1,195) |
(903) |
|
Income before provision for income taxes |
61,372 |
72,515 |
|
Provision for income taxes |
15,685 |
19,121 |
|
Net income |
$ 45,687 |
$ 53,394 |
Apple Inc. Consolidated Balance Sheets |
||
|
As of |
||
|
(in thousands) |
Sept. 24, 2016 |
Sept. 26, 2015 |
|
Cash and cash equivalents |
$ 20,484 |
$ 21,120 |
|
Short-term investments |
46,671 |
20,481 |
|
Accounts receivable, net |
15,754 |
16,849 |
|
Inventories |
2,132 |
2,349 |
|
Other current assets |
21,828 |
28,579 |
|
Total current assets |
106,869 |
89,378 |
|
Long-term marketable securities |
170,430 |
164,065 |
|
Property plant and equipment, net |
27,010 |
22,471 |
|
Goodwill |
5,414 |
5,116 |
|
Acquired intangible assets, net |
3,206 |
3,893 |
|
Other assets |
8,757 |
5,422 |
|
Total assets |
321,686 |
290,345 |
Table continued
Apple Inc. Consolidated Balance Sheets—continued |
||
|
As of |
||
|
(in thousands) |
Sept. 24, 2016 |
Sept. 26, 2015 |
|
Accounts payable |
37,294 |
35,490 |
|
Accrued expenses |
22,027 |
25,181 |
|
Deferred revenue |
8,080 |
8,940 |
|
Current portion of LT debt and short-term debt |
11,605 |
10,999 |
|
Total current liabilities |
79,006 |
80,610 |
|
Deferred revenue – non-current |
2,930 |
3,624 |
|
Long-term debt |
75,427 |
53,329 |
|
Other non-current liabilities |
36,074 |
33,427 |
|
Total liabilities |
193,437 |
170,990 |
|
Stockholders’ equity |
||
|
Common stock no par value |
31,251 |
27,416 |
|
Retained earnings |
96,364 |
92,284 |
|
Accumulated other comprehensive income (loss) |
634 |
(345) |
|
Total stockholders’ equity |
128,249 |
119,355 |
|
Total liabilities and stockholders’ equity |
$ 321,686 |
$ 290,345 |
Required:
a. Compute the current ratio and quick ratio for both firms for fiscal 2016. Compare the ratios and determine which company is more liquid.
b. Compute the times interest earned and liabilities-to-equity ratios for both firms for fiscal 2016. Which company is more solvent?
c. Do you have any concerns about either company’s ability to meet its debt obligations? Explain.
In: Accounting