1. six months ago, you purchased 100 shares of stock at a price of $43.89 per share. the stock paid a quarterly dividend of $.10 per share. today, you sold all your shares for $45.13 per share. what is the total amount of your capital gains on this investment?
Answers
The total amount of capital gains on this investment is $104.
The total cost of the investment was:
100 shares x $43.89 per share = $4,389
Next, we need to determine the total amount of dividends paid out over the six-month period. The stock paid a quarterly dividend of $.10 per share, so over six months, that would be:
2 quarters x $.10 per share x 100 shares = $20
. Today, you sold all your shares for $45.13 per share, so the total proceeds were:
100 shares x $45.13 per share = $4,513
We subtract the total cost of the investment (including dividends) from the total proceeds from the sale:
Total capital gains = Total proceeds - Total cost of investment
Total cost of investment = $4,389 + $20 = $4,409
Total proceeds = $4,513
Total capital gains = $4,513 - $4,409 = $104
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Related Questions
How does this information about the author influence your opinion about the reality of this source? Discuss at least one other type of source or document that would help you analyze the benefits and drawbacks of free enterprise.
Answers
The correct answer to this open question is the following.
Although the question is incomplete because it has no specific reference to any information or text, we can say the following.
Probably, the question refers to the author called Brooks, who expresses his arguments supporting Capitalism and the free enterprise system as the better form of an economic system. As he is a firm believer in the free enterprise system, his thoughts are biased.
So to have a better perspective, we need at least, another source on the subject. That is why I did my research and found a book that seems to be a good source of the free enterprise system. It is called "Capitalism and Freedom," written by economist Milton Friedman.
Answer:
Brooks is the president of an organization founded to protect the American free enterprise system. As a result, he is likely biased toward free enterprise and will be more likely to argue in its favor without considering its drawbacks. Another source that would be helpful would be an article that describes the negative economic and social characteristics of free enterprise.
Explanation:
What three equal payments, one in 2 years, one in 4 years, and one in 7 years would replace one single payment of $27,000 due today at an interest rate of 4. 17% compounding monthly?
Answers
Effective annual rate (EAR) = (1 + r / n)^n - 1
=$27,000 (1+4. 17% /7)^7- 1 =0.9538
The term "effective interest rate" (EIR), "effective annual interest rate," "annual equivalent rate" (AER), or simply "effective rate" refers to the percentage of interest on a loan or financial product that would be charged if compound interest accumulated over a year without any payments. The amount due each year in arrears, based on the nominal interest rate, is the compound interest. It is used to compare interest rates between loans and has different compounding intervals, such as weekly, monthly, half-yearly, or yearly. As compounding is not taken into account when calculating annual percentage rates (APR), the effective interest rate may be higher depending on how that term is defined in your area. In contrast, the periodic rate in the EIR is annualised with compounding.
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Which statement is true? A savings plan and a budget don't really have anything to do with eachother. It doesn't do much do much good to have a savings plan if you dont know how to budget you money.
Answers
Answer: It doesn't do much do much good to have a savings plan if you dont know how to budget you money.
Explanation:
Budgeting and saving go hand in hand because budgeting enables us know what amount of our money we can save after spending on what we need to maintain our lifestyle.
If we don't have a budget or know how to budget our money, we will not know the amount to put towards a savings plan and if we start a savings plan without budgeting, we might end up in a situation where we have to withdraw from the savings constantly in order to meet our financial obligations.
$1,500 at 12% interest for two years
Answers
Your initial $1,500 investment will have increased to $1,860 after two years of investing at 12% interest.
How does simple interest work?Simple interest is interest calculated solely on the principal borrowed or deposited. The interest rate is multiplied by the principal payment, and then the time factor is added. Investments increase more slowly because simple interest does not compound over time.
$1,500 at 12% interest for two years, amount will be:
simple interest= (Principal amount X rate of interest X time) / 100
= ($ 1500 X 12 X 2) / 100
= $ 360
Amount = Principal + interest
= 1500 + 360
= $ 1860
What is the simple interest calculation formula?Simple interest is calculated using the following formula: S.I. = P R T, where P denotes the principal amount, R the yearly percentage rate of interest, and T denotes the length of time, which is commonly given as the number of years. The interest rate is expressed as a percentage, or r%, and as r/100.
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what is Communication,
Answers
This is a receipt for a purchase made at a restaurant in
Sacramento, California.
The total cost of the food and drinks before taxes was
The buyer paid vin sales tax.
Based on the receipt, Sacramento has a sales tax rate
of
Answers
Answer:
10.00 , .85 , 8.5
Explanation:
Answer:
This is a receipt for a purchase made at a restaurant in Sacramento, California.
The total cost of the food and drinks before taxes was
✔ $10.00
.
The buyer paid
✔ $0.85
in sales tax.
Based on the receipt, Sacramento has a sales tax rate of
✔ 8.5%
.
Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget:
October: $42000
November: $45000
December: $50400
Whistle Works sells each whistle for $12. They have a desired ending inventory for production of 20% of the next month's budgeted sales in units. How many units does Whistle Works need to produce in November?
Answers
The number of units that Whistle Works need to produce in November is 3,840 Units.
Here, we are going to calculate the number of units that Whistle Works need to produce in November.
Units for November = Total Sales / Selling Price Per Unit
Units for November = $45,000 / $12
Units for November = 3,750 Units
Units for December = Total Sales / Selling Price Per Unit
Units for December = $50,400 / $12
Units for December = 4,200 Units
Units to be Produced in November = 80% * Expected Sales in November + 20% * Expected Sales in December
Units to be Produced in November = 80 % * 3,750+ 20% * 4,200
Units to be Produced in November = 3,000 + 840
Units to be Produced in November = 3,840 Units
Therefore, the number of units that Whistle Works need to produce in November is 3,840 Units.
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i need help with Question B5 (a) short essay. im completely lost please help me :(
Answers
Express the elements in pointwise which are required in employment notice
Answers
It's too short. Write at least 20 characters to explain it well.
levi is a marketing manager for trailblazer customer outfitters. he is currently finalizing the corporate marketing strategy and is reviewing factors outside of the organization. he wants to ensure the marketing strategy is adjusted to reflect these factors. levi is most likely conducting a(n)
Answers
Levi is a marketing manager for trailblazer customer outfitters. He is currently finalizing the corporate marketing strategy and is reviewing factors outside of the organization. Levi is most likely conducting strategic planning.
Marketing is the set of activities, institutions, and processes for creating, communicating, delivering, and exchanging offers of value to customers, clients, partners, and society at large.
The main purpose of marketing is to get people interested in a company's products and services. This is done through market analysis, research, examining the interests of the company's ideal customers, and engaging them through messages that are educational and helpful to the company's target audience.
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Which of the following are signs of a market failure?.
Answers
Answer:
Productive and allocative inefficiency.
Monopoly power.
Missing markets.
Incomplete markets.
De-merit goods.
Negative externalities.
fill in the blank. income elasticity of demand and cross-price elasticity of demand measure responsiveness to changes in___, and thus tell us by how much___.
Answers
The statement is completed as: Income elasticity of demand and cross-price elasticity of demand measure responsiveness to changes in price, and thus tell us by how much demand will change.
Income elasticity of demand measures how much the quantity demanded of a good or service changes in response to a change in income, while cross-price elasticity of demand measures how much the quantity demanded of one good or service changes in response to a change in the price of another good or service.
These measures of elasticity help us to understand how sensitive consumers are to changes in income and price, and can be used to make predictions about how demand will change in response to these factors.
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a positive mold with a smooth surface will produce a good finish on which surface of the laminated product in the hand lay-up method?
Answers
A positive mold with a smooth surface will produce a good finish on the outer surface of the laminated product in the hand lay-up method.
In the hand lay-up method of laminating, a positive mold is used to shape and form the final product. The positive mold has a shape that corresponds to the desired shape of the finished product. When the laminate material, such as fiberglass or carbon fiber, is applied to the mold, it takes on the shape of the mold.
The smooth surface of the positive mold plays a crucial role in achieving a good finish on the laminated product. The smooth surface ensures that the laminate material adheres evenly to the mold, minimizing the occurrence of air pockets, wrinkles, or other imperfections. This results in a smooth and consistent outer surface of the laminated product.
A positive mold with a smooth surface is particularly important when a high-quality finish is desired, such as in the production of consumer products, automotive parts, or aerospace components. The smooth mold surface allows for precise replication of details and contours, enhancing the overall aesthetic appeal and functionality of the laminated product.
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1. The daily demand for a popular CD in a music store is approximately M200, 20). The cost of keeping the CD on the shelves is 5.04 per disc per day. It costs the store $100 to place a new order. There is a 7-day lead time for delivery. Determine the store's optimal inventory policy given that the store wishes to limit the probability of shortage to at most.02. 2. The daily demand for camera films at a gift shop is N300, 5). The cost of holding a roll in the shop is 5.02 per day, and the fixed cost of placing a replenishment order is $30. The shop's inventory policy is to order 150 rolls whenever the inventory level drops to 80 units. It simultaneously maintains a buffer of 20 rolls at all times. a. (a) Determine the probability of running out of stock. b. (b) Given the data of the situation, recommend an inventory policy for the shop given that the shortage probability cannot exceed
Answers
To determine the store's optimal inventory policy, we can use the Economic Order Quantity (EOQ) model. The store's optimal inventory policy would be to order approximately 3,162 CDs when the inventory level reaches 1,400 CDs, with no additional safety stock.
To determine the store's optimal inventory policy, we can use the Economic Order Quantity (EOQ) model, taking into account the demand, holding cost, ordering cost, and lead time.
Given information:
Daily demand (D) = 200 CDs
Holding cost (H) = $0.04 per disc per day
Ordering cost (S) = $100
Lead time (L) = 7 days
Maximum probability of shortage (P) = 0.02
First, let's calculate the EOQ using the following formula:
EOQ = √((2DS) / H)
EOQ = √((2 x 200 x 100) / 0.04)
= √(400,000 / 0.04)
= √10,000,000
= 3,162.28 (approximately)
The optimal order quantity would be approximately 3,162 CDs.
Next, let's calculate the reorder point (ROP) to determine when to place a new order:
ROP = D x L
ROP = 200 x 7
= 1,400 CDs
The reorder point would be 1,400 CDs.
To limit the probability of shortage to at most 0.02, we need to determine the safety stock. The safety stock is the buffer stock held to account for uncertainties in demand and lead time. It is calculated using the formula:
Safety stock = z x √(D x (σL)² + (σD)² x L)
Here, z is the Z-value corresponding to the desired service level. Since the maximum probability of shortage is 0.02, the desired service level would be (1 - 0.02) = 0.98. The corresponding Z-value can be obtained from a standard normal distribution table.
Assuming the standard deviation of demand (σD) is 20 CDs and the standard deviation of lead time (σL) is 0 (since it is not provided in the question), we can calculate the safety stock:
Safety stock = Z x √(200 x (0²) + (20²) x 7)
Since σL = 0, the safety stock would be 0.
In summary, the store's optimal inventory policy would be to order approximately 3,162 CDs when the inventory level reaches 1,400 CDs, with no additional safety stock. This policy aims to limit the probability of shortage to at most 0.02.
The correct question is:
The daily demand for a popular CD in a music store is approximately M200, 20). The cost of keeping the CD on the shelves is $.04 per disc per day. It costs the store $100 to place a new order. There is a 7-day lead time for delivery. Determine the store's optimal inventory policy given that the store wishes to limit the probability of shortage to at most.02.
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The Extra Stores Company has been using the integrated information technology systems for procurement functions, including sourcing, negotiation, ordering, receipt, and post-purchase
review. This is an example of.
O CRM
• E-Procurement
• CM and E-Procurement
© Hardware
Answers
The Extra Stores Company's use of integrated information technology systems for procurement functions, including sourcing, negotiation, ordering, receipt, and post-purchase review, is an example of e-procurement.
E-procurement refers to the utilization of electronic platforms and technologies to automate and streamline the procurement process. It involves the use of information technology systems to manage various procurement activities, from sourcing suppliers to making purchases and evaluating supplier performance.
In the given scenario, the Extra Stores Company is implementing integrated information technology systems for its procurement functions.
This implies that they have implemented a system that allows them to perform procurement activities electronically, utilizing software and online platforms. This system likely includes features such as online sourcing and negotiation with suppliers, electronic ordering and receipt processes, as well as post-purchase review capabilities.
By leveraging e-procurement, the Extra Stores Company can enhance the efficiency and effectiveness of its procurement operations. It can reduce manual paperwork, streamline processes, improve communication with suppliers, and gain better visibility and control over its procurement activities.
Ultimately, e-procurement can lead to cost savings, time savings, and improved decision-making in the procurement function.
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To be more efficient in formatting tasks, it is important to follow best practices when designing type. Which scenarios
show the applications of best practices when designing type? Check all that apply.
Joe uses an 8-point font.
Angelo uses one type of font in his document.
Jeremiah underlines words for emphasis.
Akilah indents and adds space between her paragraphs.i
Amy uses the hyphenation feature in her justified paragraphs.
Answers
Answer:
2 and 5
Explanation:
Scenarios that show the applications of best practices when designing type is
Angelo uses one type of font in his document.Amy uses the hyphenation feature in her justified paragraphs.Thus the correct option is B and E.
What is formatting?Document formatting describes the way a document is set up. It involves requirements on how a document should look. Formatting makes documentation appear professional and appealing.
While making any document it is required to choose one type of font which makes it a structured and systematic manner. various styles of font may distract the focus of the reader while taking look at the document.
Use of the hyphenation feature in her justified paragraphs to make it more clear and more structured to achieve a more uniform line length, Word's hyphenation feature enables the insertion of line breaks and hyphens within words.
Therefore, options B and E are the appropriate answer.
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Blogs are used for all of the following except
O professional development
O editing corporate documents
O sharing news
O promotions
Answers
Answer:
B - editing corporate documents
Answer:
I thing promotions
Explanation:
please mark me branlast
A Texas governor can use "executive orders" to accomplish all the following, excepta. set policies.b. create task forces.c. abolish boards and commissions.d. punish elected officeholders.
Answers
A Texas governor can use executive orders to accomplish all the following except punish elected officeholders. The correct answer is option d.
The power of the Texas governor to issue executive orders comes from the state's constitution and state law. Executive orders are directives issued by the governor that carry the force of law and can be used to implement policies, establish task forces, and reorganize state agencies.
Executive orders can be issued by the governor when the state legislature is not in session or when the legislature has given the governor the authority to do so. However, the power of the governor to issue executive orders is not absolute, and it can be challenged in court if it exceeds the governor's legal authority.
Although the Texas governor has broad powers to issue executive orders, they do not have the authority to punish elected officeholders through executive orders. Any disciplinary action taken against elected officials must follow the legal procedures outlined in the Texas Constitution and state laws.
For example, the governor may call for an investigation into allegations of wrongdoing by an elected official, but any disciplinary action or removal from office would require a legal process such as impeachment or recall.
So, the correct answer is option d. punish elected officeholders.
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In a sell or process further decision, the company should process further if the extra
a. cost of processing further is the same as the extra revenue. b. revenue from processing further is less than the extra cost. c. cost of processing further is less than the extra revenue.
d. cost of processing further is greater than the extra revenue.
Answers
In a sell or process further decision, the company should process further if the cost of processing further is less than the extra revenue. This means that the additional costs incurred in the further processing should be outweighed by the additional revenue generated. Option C.
Option c, "the cost of processing further is less than the extra revenue," aligns with this principle. If the cost of processing further is lower than the extra revenue obtained from the additional processing, it indicates that the company can make a profit by continuing the process.
Options a and b are not optimal choices. If the cost of processing further is the same as the extra revenue (option a), it would result in a break-even situation, where there is no net gain for the company. Similarly, if the revenue from processing further is less than the extra cost (option b), it would lead to a loss for the company.
Option d, "the cost of processing further is greater than the extra revenue," would also result in a loss for the company. It implies that the additional costs outweigh the potential revenue, indicating an unfavorable financial outcome.
Therefore, option c, where the cost of processing further is less than the extra revenue, is the most suitable condition for the company to decide to process further.
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For each of the following scenarios, A) State the management decision problem. B) State the marketing researcher's problem, and C) Compose 2 Research Questions and Hypotheses.
) Buffalo Wild Wings has noticed decreased customer traffic on Monday-Thursday evenings over the past year.
) Sony is considering changing its PS4 advertising campaign of the past two years
Answers
A new advertising campaign for the PS4, focusing on specific features or highlighting unique gaming experiences, will positively influence consumer attitudes, leading to increased purchase intent.
Scenario 1:
A) Management Decision Problem: Buffalo Wild Wings needs to address the decreased customer traffic on Monday-Thursday evenings and find ways to improve the situation.
B) Marketing Researcher's Problem: The marketing researcher needs to understand the reasons behind the decreased customer traffic.
C) Research Questions and Hypotheses:
Hypothesis: The decreased customer traffic is due to increased competition from other local restaurants offering weekday evening promotions or discounts.
Scenario 2:
A) Management Decision Problem: Sony needs to determine whether changing its PS4 advertising campaign is necessary and if it will have a positive impact on sales and customer perception.
B) Marketing Researcher's Problem: The marketing researcher needs to assess the effectiveness of Sony's current PS4 advertising campaign, evaluate consumer attitudes and preferences.
C) Research Questions and Hypotheses:
Hypothesis: The current PS4 advertising campaign has not effectively resonated with the target audience, leading to lower consumer perception and purchase intent.
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~PLEASE HELP~
Why is it important to develop an idea of your potential career cluster now?
Answers
Answer:
It is important for you to get a idea what you would to be in because it is going to help you understand your purpose in life. It is going to help you choose the right college for you.
Explanation:
The tendency to embrace a plurality of styles by the 1980s, in contradiction to the idea of "branding" and maintaining a uniform corporate identity, is illustrated by?.
Answers
The tendency to embrace a plurality of styles by the 1980s, in contradiction to the idea of "branding" and maintaining a uniform corporate identity, is illustrated by the MTV (Music Television) logo.
The MTV (Music Television) logo exemplifies the 1980s trend of embracing a variety of styles, in contrast to the concept of "branding" and maintaining a consistent corporate identity.
The channel's logo was changed to something more resembling the one we know today in 1981. This design featured a large "M" with a much smaller "TV" in the "M's" bottom right corner. This was followed by the words "Music Television." Because of this branding, MTV was able to maintain the highest viewership for viewers aged 15 to 28 at the time.
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Which of the following represents an isocost line?
C = TC + FC
C = FC + VC
C = TC - VC
C = wL + rK
Answers
The equation C = wL + rK represents an isocost line, showing combinations of labor and capital that can be purchased at a given total cost.
C = wL + rK represents an isocost line.
An isocost line shows the various combinations of inputs (in this case, labor and capital) that can be purchased at a given total cost (C).
In the equation C = wL + rK, w represents the wage rate for labor, L represents the quantity of labor, r represents the rental rate for capital, and K represents the quantity of capital.
By varying the quantities of labor and capital, the total cost remains constant along the isocost line.
Therefore, option D) C = wL + rK correctly represents an isocost line.
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Mei starts a job with a $72,000 annual salary that is paid twice a
month. How much should she expect her gross pay to be on her
first paycheck?
Answers
$3000
Explanation:
just diveide the number by 24
A model that shows the trade-offs and opportunity costs of producing an additional unit of a good relative to what must be given up in the production of another good.
Answers
Answer:
production possibilities curve (PPC)
Explanation:
The PPC is used to explain the tradeoffs that producers face when having to choose between 2 different alternative products or services. The more they choose of one product, the less they will be able to produce of the other product. Opportunity costs are the associated costs or benefits lost resulting from choosing one activity or investment over another alternative.
Type in a sentence using the word Financial planning wrong
Answers
Below you will find the closing stock prices for eBay over a three-week period. Calculate the simple three-day and five-day moving averages for the stock. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)Date Close4/23/2012 $ 37.834/24/2012 37.654/25/2012 37.254/26/2012 37.514/27/2012 36.774/30/2012 36.945/1/2012 37.015/2/2012 37.055/3/2012 37.745/4/2012 37.845/7/2012 37.775/8/2012 37.935/9/2012 38.265/10/2012 38.415/11/2012 38.243-day 5-day4/23/2012 4/24/2012 4/25/2012 $ 4/26/2012 4/27/2012 $4/30/2012 5/1/2012 5/2/2012 5/3/2012 5/4/2012 5/7/2012 5/8/2012 5/9/2012 5/10/2012 5/11/2012
Answers
To calculate the simple three-day and five-day moving averages for eBay's stock prices, we add up the closing prices for the number of days in the moving average and divide by the number of days.
The simple three-day moving averages are:
April 25th: ($37.83 + $37.65 + $37.25) / 3 = $37.58
April 26th: ($37.65 + $37.25 + $37.51) / 3 = $37.47
April 27th: ($37.25 + $37.51 + $36.77) / 3 = $37.18
April 30th: ($37.51 + $36.77 + $36.94) / 3 = $37.07
May 1st: ($36.77 + $36.94 + $37.01) / 3 = $36.91
May 2nd: ($36.94 + $37.01 + $37.05) / 3 = $37.00
May 3rd: ($37.01 + $37.05 + $37.74) / 3 = $37.27
May 4th: ($37.05 + $37.74 + $37.84) / 3 = $37.54
May 7th: ($37.74 + $37.84 + $37.77) / 3 = $37.78
May 8th: ($37.84 + $37.77 + $37.93) / 3 = $37.85
May 9th: ($37.77 + $37.93 + $38.26) / 3 = $37.98
May 10th: ($37.93 + $38.26 + $38.41) / 3 = $38.20
May 11th: ($38.26 + $38.41 + $38.24) / 3 = $38.30
The simple five-day moving averages are:April 27th: ($37.83 + $37.65 + $37.25 + $37.51 + $36.77) / 5 = $37.20
April 30th: ($37.65 + $37.25 + $37.51 + $36.77 + $36.94) / 5 = $37.14
May 1st: ($37.25 + $37.51 + $36.77 + $36.94 + $37.01) / 5 = $37.10
May 2nd: ($37.51 + $36.77 + $36.94 + $37.01 + $37.05) / 5 = $37.06
May 3rd: ($36.77 + $36.94 + $37.01 + $37.05 + $37.74) / 5 = $37.10
May 4th: ($36.94 + $37.01 + $37.05 + $37.74 + $37.84) / 5 = $37.32
May 7th: ($37.01 + $37.05 + $37.74 + $37.84 + $37.77) / 5 = $37.48
May 8th: ($37.05 + $37.74 + $37.84 + $37.77 + $37.93) / 5 = $37.87
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countries with strong balance sheets and declining budget deficits tend to have lower interest rates.
Answers
In countries with sound financial position and declining budget deficits, interest rates are frequently lower.
A company's balance sheet, often known as a "statement of financial position," contains a list of its assets, liabilities, and equity (net worth). The core of any company's financial statements is made up of the income statement, cash flow statement, and balance sheet.
A balance sheet gives you a brief snapshot of the financial state of your business at any particular time. Business leaders can examine the financial health of their company using a balance sheet, an income statement, and a cash flow statement. when an economy has a sound balance sheet and a declining budget deficit.
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I have a very quick question. So im applying for Early college and i need some future educational goals and maybe im just thinking about it too much but what are some goals?? like are they asking for what i plan on doing in my future as in job?? Or what??
Answers
Answer:
Explanation:
They are pretty much asking what you want to pursue. For example, if you are going for a career in Information Technology, one of your goals may be learn Robotics or Artificial Intelligence. Another goal may be to learn the necessary skills and work for a startup. The goals are anything that you want to achieve, and in this case it would be related to the field that you are going to study in the college that you are applying to. Therefore, simply write what you think you want your life to be like in the future with what you learn in college.
2. Reggies sells office chairs to their regular customers for $200. The chairs cost is as follows: DM $50 per chair, DL $25 per chair, Var MOH $25 per chair, and Fix MOH $40 per chair. They normally sell 5,000 chairs in a month, and they have sufficient capacity to make and sell another 2,000. Gina, who is not a regular customer, talks to Reggie about buying 1,000 chairs but at a price of only $105 per chair. How much would operating income increase or decrease (-) if Reggie accepted the special order (assuming existing sales unaffected)?
3. Olivia's has 3 separate branches in its business. The Mountain West branch has been losing money according the following report:
Sales 1,000
-variable costs (600)
=Contribution Margin 400
-Fixed expenses (500)
Operating Income (100)
Olivia is considering shutting down the Mountain West branch. If she did that, she knows that: (1) all variable costs would be avoidable, and (2) of the fixed costs, $125 of them are common (or allocated fixed costs). Olivia also knows that, if the Mountain West Branch were shut down, the contribution margin of the West Coast Branch would increase by $100 due to Mountain West customers switching to West Coast. What would be the effect if Olivia shut down the Mountain West Branch? (better off is a positive number, worse off is a negative number)
4. Marshall has a car wash service. For each car, it costs Marshall $3.00 but Marshall is able to sell the service for $6 per car. Marshall services 1,000 car per month. Marshall is considering adding a hand-wax/dry feature to the car wash. If Marshall did that, he would need to spend another $2.50 per car on labor and materials, but he would then be able to charge $9 for the service per car. If Marshall adds the hand-wax/dry feature, how much better or worse off will he be (assuming the same quantity of 1,000 cars)?
Answers
If Reggie accepts the special order from Gina at a price of $105 per chair, the operating income would decrease by $5,000.
Olivia would be better off by $25 if she shut down the Mountain West branch.
If Marshall adds the hand-wax/dry feature to the car wash, he would be better off by $1,500.
For the special order from Gina, we need to calculate the incremental costs and compare them to the incremental revenue. The incremental cost per chair is ($50 + $25 + $25 + $40) = $140. The incremental revenue per chair is ($105 - $0) = $105. Therefore, the total decrease in operating income would be $140 * 1,000 - $105 * 1,000 = -$5,000.
In the case of Olivia's Mountain West branch, if she shuts it down, she can avoid all variable costs, which are $600. Of the fixed costs, $125 are common costs that cannot be avoided. The West Coast branch's contribution margin would increase by $100 due to customers switching from the Mountain West branch. Therefore, Olivia would be better off by $600 - $125 + $100 = $25.
For Marshall's car wash, without the hand-wax/dry feature, the contribution margin per car is ($6 - $3) = $3. If he adds the feature, the contribution margin per car would be ($9 - $3 - $2.50) = $3.50. Therefore, Marshall would be better off by ($3.50 - $3) * 1,000 = $500.
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