Consider a closed economy in which the depreciation rate is 10% per year, the rate of population increase is 2% per year, the rate of technological progress is 1% per year Andy the households save 30% of their income. Suppose the aggregate production function is; Y=f(K, AL)= 9K^4/5 (AL)^1/5 Where Y is output, K is capital, A is the level of technology and L is labor input.
a) Derive the production function in per effective worker terms.
b) Solve for the steady-state values of capital per effective worker (k*), output per effective worker (y*), consumption per effective worker (c*), and savings per effective worker (s*).
c) Derive the equation for the growth rate of output per worker, the growth rate of capital per worker, the growth rate of output and growth rate of capital. What are the values of the growth rates derived?
In: Economics
old Corporation is considering a project. The data for the 3
year project are given below. Should the manager of Gold
Corporation accept this project? Use the NPV criteria to make your
decision.
Sales revenue, each year: $50,000
Variable costs, each year: $12,000
Fixed costs, each year: $0
Sunk costs: $30,000
Initial outlay: $45,000
Depreciation, each year: $15,000
Tax rate: 20%
WACC: 12%
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The project should not be accepted because it has an NPV of -$15,179 |
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The project should be accepted because it has an NPV of $35,221 |
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The project should be accepted because it has an NPV of $41,441 |
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The project should be accepted because it has an NPV of $50,359 |
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The project should be accepted because it has an NPV of
$125,221 |
In: Finance
ACCOUNTING FOR LIABILITIES:
Based on the information provided in the company’s Annual Report for Financial Year 2035 you have to answer the following sub-questions. On 1 July 2035 Glorious Ltd issues $3 million in six-year debentures that pay interest each six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent. Interest expense is determined using the effective-interest method. Required: (a) Determine the issue price
(b) Provide the journal entries at: (i) 1 July 2035
(ii) 30 June 2036
(iii) 30 June 2037
In: Accounting
Marley, an employee, entertains one of his clients on June 1 of
the current year to try to close a large sale for his company.
Entertainment expenses Marley paid are:
Cab fares
$50
Dinner, at which the deal was discussed
230
Tips at restaurant
30
Marley’s best course of action would be to:
a.
Take a $310 deduction on his tax return
b.
Take a $260 deduction on his tax return
c.
Take a $195 deduction on his tax return
d.
Seek reimbursement from his company
In: Accounting
6. You are saving for a new house and you put $25,000 per year in an account paying 4.5%. The first payment is made today.
A.) How much will you have at the end of 3 years? (Show Work)
B. Also build a table/schedule to show your account each year (include beginning balance and ending balance each year, interest earned).
In: Finance
The following information was taken from the records of Raiders Inc. for the year 2017. Income tax applicable to income from continuing operations $260,000; income tax applicable to loss on discontinued operations $36,000; income tax applicable to unusual gain $45,000; income tax applicable to unusual loss $28,000. There is also unrealized holding gain on available-for-sale securities $20,000.
| Unusual gain $145,000 | Cash dividends declared $200,000 |
| Loss on discounted operations $115,000 | Retained earnings January 1, 2017 $850,000 |
| Administrative expenses $336,000 | Cost of goods sold $1,200,000 |
| Rent Revenue $60,000 | Selling expenses $430,000 |
| Unusual loss $90,000 | Sales $2,700,000 |
| Shares outstanding during 2017 were 200,000. |
Instructions:
(a). Prepare multiple-step income statement for 2017.
(b). Prepare retained earnings statement for 2017.
(c). Show how comprehensive income is reported using the two statement format.
In: Accounting
In: Nursing
In year 0, Longworth Partnership purchased a machine for $57,250
to use in its business. In year 3, Longworth sold the machine for
$44,300. Between the date of the purchase and the date of the sale,
Longworth depreciated the machine by $24,900. (Loss amounts
should be indicated by a minus sign. Leave no answer blank. Enter
zero if applicable.)
a. What is the amount and character of the gain (loss)
Longworth will recognize on the sale?
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b. What is the amount and character of the gain (loss) Longworth will recognize on the sale if the sale proceeds are increased to $69,000?
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c. What is the amount and character of the gain (loss) Longworth will recognize on the sale if the sale proceeds are decreased to $20,200?
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In: Accounting
DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.
| Month | ||||||||
| 1 | 2 | 3 | 4 | |||||
| Throughput time (days) | ? | ? | ? | ? | ||||
| Delivery cycle time (days) | ? | ? | ? | ? | ||||
| Manufacturing cycle efficiency (MCE) | ? | ? | ? | ? | ||||
| Percentage of on-time deliveries | 91 | % | 86 | % | 82 | % | 78 | % |
| Total sales (units) | 3030 | 2900 | 2752 | 2649 | ||||
Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:
| Average per Month (in days) | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 | 2 | 3 | 4 | |||||||||||||||||||||||||||||||||||||||||||
| Move time per unit | 0.9 | 0.7 | 0.9 | 0.9 | ||||||||||||||||||||||||||||||||||||||||||
| Process time per unit | 2.9 | 2.8 | 2.7 | 2.6 | ||||||||||||||||||||||||||||||||||||||||||
| Wait time per order before start of production | 19.0 | 20.8 | 23.0 | 24.8 | ||||||||||||||||||||||||||||||||||||||||||
| Queue time per unit | 4.4 | 5.1 | 5.9 | 6.8 | ||||||||||||||||||||||||||||||||||||||||||
| Inspection time per unit | 0.7 | 0.9 | 0.9 | 0.7 | ||||||||||||||||||||||||||||||||||||||||||
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Required 1 1-a. Compute the throughput time for each month. 1-b. Compute the delivery cycle time for each month. (Round your answers to 1 decimal place.)
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2. Evaluate the company’s performance over the last four months. (Indicate the effect of each trend by selecting "Favorable" or "Unfavorable" or "None" for no effect (i.e., zero variance).
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3-a. (Month 5) Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.
3-b. (Month 6) Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.
(Round your answers to 1 decimal place.)
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In: Accounting
(a) Prepare a Statement of Cash Flows for the year ended 30 June 2020 using the direct method, ignoring GST.
Show all workings on the Workings page.
(b) Using the relevant information from the question above, identify two (2) specific items (including their values) which causes a difference between Net Profit and Net Cash from Operating Activities and analyse why it causes a difference.
The following financial statements relate to Clarke Ltd for the financial year ended 30 June 2020.
Balance Sheet as at 30 June
| 2020 | 2019 | |
| ASSETS | $ | $ |
| Current Assets | ||
| Cash | 212,500 | 176,000 |
| Accounts Receivable | 100,000 | 200,000 |
| Allowance for Doubtful Debts | (10,000) | (5,000) |
| Inventory | 45,000 | 42,000 |
| Prepaid rent | 5,000 | 2,500 |
| Total current assets | 352,000 | 415,000 |
| Non-Current Assets | ||
| Land | 550,000 | 500,000 |
| Equipment | 900,000 | 800,000 |
| Accumulated Depreciation - Equipment | (650,000) | (560,000) |
| Total non-current assets | 800,000 | 740,000 |
| TOTAL ASSETS | 1,152,500 | 1,155,500 |
| LIABILITIES & EQUITY | ||
| Liabilities | ||
| Accounts Payable | 45,000 | 35,000 |
| Wages Payable | 30,000 | 15,000 |
| Income Tax Payable | 28,000 | 24,000 |
| Loan Payable | -- | 400,000 |
| Total liabilities | 103,000 | 474,000 |
| Owner's Equity | ||
| Share Capital | 750,000 | 500,000 |
| Retained Profits | 249,500 | 181,500 |
| Revaluation Surplus | 50,000 | 0 |
| Total Equity | 1,049,500 | 681,500 |
| TOTAL LIABILITIES AND EQUITY | 1,152,500 | 1,155,500 |
Clarke Limited's Income Statement for the year ended June 2020
| Revenue | $ |
| Net Sales | 750,000 |
| Cost of Sales | 225,000 |
| Gross Profit | 525,000 |
| Expenses | |
| Wage expense | 300,000 |
| Depreciation Expense - Equipment | 90,000 |
| Bad Debt Expense | 10,000 |
| Rent expense | 4,000 |
| Interest expense | 3,000 |
| Total expenses | 407,000 |
| Net Profit Before Tax | 118,000 |
| Income Tax Expense | 35,400 |
| Net Profit After Tax | 82,600 |
Additional information:
Interest expense is classified as an operating cash flow.
The company paid dividends in 2020.
Land was revalued during the 2020 financial year.
In: Accounting