Prepare entries to record the following non-strategic investment transactions of Arrowhead Investment Corporation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
2020
Mar. 1 Paid $76,980 to purchase a $76,000, two-year, 8.0% bond payable of Action Corporation dated March 1. Interest is paid quarterly beginning June 1. Management intends to actively trade bond purchases.
Apr. 16 Bought 2,800 common shares of Brandon Motors at $28.00.
May 2 Paid $54,968 to purchase a five-year, 5.50%, $56,000 bond payable of Collingwood Corporation. Interest is paid annually each April 30.
June 1 Received a cheque from Action Corporation regarding quarterly interest.
Aug. 1 Brandon Motors’ board of directors declared a dividend of $0.75 per share to shareholders of record on August 10, payable August 15.
15 Received the Brandon Motors dividend.
Sept. 1 Received a cheque from Action Corporation regarding quarterly interest.
17 Purchased 26,600 Dauphin Inc. common shares at $3.90.
Oct. 20 Sold the Brandon Motors shares at $31.50.
Dec. 1 Received a cheque from Action Corporation regarding quarterly interest.
1 Sold the Action Corporation bond at 101.
31 Accrued interest on the Collingwood bond. The fair value of the equity security on this date was Dauphin, $4.20. The carrying value equalled the fair value for the Collingwood bond.
2021
Apr. 30 Received a cheque from Collingwood Corporation regarding annual interest.

a) The total bond premium is $120,000.

b) The interest paid in cash semiannually is $35,000.

c) The semiannual amortization amount of the bond premium is $7,500.

d) The total bond interest expense over the 4 years is $280,000.

a) To calculate the total bond premium, subtract the par value from the cash received: $1,120,000 - $1,000,000 = $120,000.

b) Since the bond interest is paid semiannually, divide the annual interest by 2: 7% / 2 = 3.5%.

Multiply this by the par value to find the semiannual interest paid in cash: $1,000,000 * 3.5% = $35,000.

c) The semiannual amortization amount of the bond premium is the bond premium divided by the number of periods: $120,000 / (4 * 2) = $7,500.

d) The total bond interest expense over the 4 years is calculated by multiplying the semiannual interest by the number of periods:

$35,000 * (4 * 2) = $280,000.

Therefore:

a) The total bond premium is $120,000.

b) The interest paid in cash semiannually is $35,000.

c) The semiannual amortization amount of the bond premium is $7,500.

d) The total bond interest expense over the 4 years is $280,000.

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Question:

On Dec 31, 2020, ABC Corp issued 4-year, 7% bonds with $1,000,000 as par value ABC Corp. received $1,120,000 in cash. The bond interest is paid semiannually on June 30 and December 31 every year.

Compute the following:

a) Total bonds premium.

b) Interest paid in cash semiannually.

c) The semiannual amortization amount of the bond premium.

d) Total bonds interest expense over the 4 years.

C) Multichannel, single phase. In a twelve machine factory with three repair mechanics, the queuing system line structure concerning machine breakdowns would typically be classified as a multichannel, single phase system.

In this scenario, the breakdowns of the twelve machines can be considered as individual arrival processes, forming a single phase. The repair mechanics can be seen as multiple channels through which the breakdowns are serviced. Each repair mechanic can attend to one machine at a time, and the machines are serviced independently.

This queuing system structure allows for parallel processing of breakdowns, where multiple machines can be repaired simultaneously by different mechanics. It helps to reduce waiting times and increase efficiency in resolving machine breakdowns.

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The choice of loan alternative for Nusantara Spa will depend on a thorough evaluation of the associated costs, the company's financial situation, and its borrowing needs.

Nusantara Spa is considering three loan options to borrow approximately RM150,000 for a 6-month period.

The first option is a loan with a simple interest rate of 7 percent and a compensating balance requirement of 15 percent. The second option is a discounted loan with a stated interest rate of 6.5 percent and a compensating balance of 20 percent.

The third option is a revolving line of credit with a RM250,000 limit, a 1 percent commitment fee, and a 12 percent stated interest rate.

To determine the best alternative, several factors need to be considered. Firstly, the total cost of borrowing should be compared, taking into account the interest rate, compensating balance, and fees associated with each option. Secondly, the specific financial needs and cash flow patterns of Nusantara Spa should be assessed.

If the company anticipates fluctuating borrowing requirements, the flexibility offered by the revolving line of credit may be advantageous. On the other hand, if the loan amount is expected to remain constant, the simple interest or discounted loan may be more suitable.

Ultimately, the choice of loan alternative for Nusantara Spa will depend on a thorough evaluation of the associated costs, the company's financial situation, and its borrowing needs.

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Prevention Costs: It is incurred to prevent or minimize the damage.

Appraisal Costs: It is incurred to assess or evaluate products, processes, or services to ensure that they meet the required standards.

Internal Failure Costs: It incurred due to failures or defects discovered before products or services is provided to customers.

External Failure Costs: It occurs when failures or defects are discovered after products or services have been provided to customers.

Note: Classifications might vary based on industry and context provided.

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Media for marketing has become essential for the advertising and promotion of products and services. Turkish advertising agencies that specialize in media marketing play a significant role in helping businesses reach their target market.

Agency Assistance, Turkish advertising agencies assist businesses with all aspects of media marketing, including market research, strategic planning, and media buying. The market research phase involves the collection of data on consumer behavior and purchasing patterns, which the advertising agency uses to create a strategic plan that will reach the target audience. The strategic planning phase includes deciding on the most effective forms of advertising to reach the target audience. This may involve a combination of television, radio, print, and online advertising, depending on the target market. The media buying phase involves the actual purchase of advertising space, negotiating the best rates, and ensuring that the advertisements are placed in the most effective locations.

Coverage of Various Media Turkey has a diverse range of media outlets, including television, radio, newspapers, magazines, and online media. Advertising agencies in Turkey specialize in utilizing the various forms of media to reach a broader audience and maximize the impact of the advertising campaign. Television advertising is particularly effective in Turkey, as television is the primary source of entertainment for most Turks.

In addition, the use of online advertising has grown rapidly in recent years, with many Turkish consumers accessing the internet via smartphones and tablets. Media for marketing has become essential for businesses looking to promote their products and services in Turkey.

Turkish advertising agencies play a significant role in helping businesses reach their target audience through strategic planning and media buying. The coverage of various media outlets is also essential in reaching a broader audience, with television and online advertising being particularly effective.

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The "Pacific Solution" is an agreement between the governments of Australia and Pacific island countries in addressing migratory flows.

In this agreement, asylum seekers who were intercepted while attempting to travel to Australia by boat were detained and processed on the island of Nauru or on Manus Island in Papua New Guinea.

In my opinion, the Pacific Solution does involve discrimination against the migrants because it aims to deter people from seeking asylum by making the process more difficult and less attractive. It involves detaining people in offshore facilities in poor conditions, which can have a negative impact on their mental and physical health.

This policy also violates the principle of non-refoulement, which is the obligation of countries not to return people to places where they may face persecution or serious harm. Additionally, the Pacific Solution has been criticized for lacking transparency and for denying refugees access to legal representation and support services.

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a. (i) A rise in the global interest rate would lead to higher national saving.

(ii) The cost of capital rises as a result, which lowers domestic investment.

(iii) NCO would rise as a result of the economy attracting more foreign capital due to the higher global interest rate.

(iv) The real exchange rate would appreciate.

(v) Net exports would decrease.

b. (i) An increase in the government budget surplus would lead to an increase in national saving.

(ii) Domestic investment would decrease.

(iii) NCO would increase.

(iv) The real exchange rate would appreciate.

(v) Net exports would decrease.

c. (i) An increase in the government budget deficit would lead to a decrease in national saving.

(ii) Domestic investment would increase.

(iii) increase in net capital outflow.

(iv) The real exchange rate would depreciate.

(v)  Net exports would increase.

d. (i) There would be no direct effect on national saving due to the import quota.

(ii) Domestic investment would likely remain unaffected by the import quota as there is no direct impact on the availability of domestic funds for investment.

(iii) NCO would decrease.

(iv) The real exchange rate would appreciate.

(v) Net exports would decrease.

A tiny open economy with perfect capital mobility and a flexible exchange rate would see the following consequences from an increase in the global interest rate:

(i) As people and businesses are encouraged to save more to take advantage of higher returns on their savings, a rise in the global interest rate would lead to higher national saving.

(ii)  Domestic investment would decline because domestic enterprises would be less likely to invest as a result of the higher global interest rate.

(iii) NCO would rise as a result of the economy attracting more foreign capital due to the higher global interest rate.

(iv) The increase in NCO leads to an increased demand for foreign currency, causing the domestic currency to depreciate.

(v) The appreciation of the real exchange rate makes domestic goods relatively more expensive compared to foreign goods, reducing exports and increasing imports, leading to a decrease in net exports.

b) An increase in the government budget surplus in a small open economy with perfect capital mobility and a flexible exchange rate would have the following effects:

(i) The government budget surplus represents an increase in public saving, which contributes to national saving. Therefore, an increase in the government budget surplus would lead to an increase in national saving.

(ii) The increase in the government budget surplus means that the government is borrowing less from the capital market, reducing the demand for loanable funds.

(iii)  With a decrease in domestic investment, there is a surplus of savings that are available for lending to foreign countries, resulting in an increase in net capital outflow.

(iv) The increase in NCO leads to an increased demand for foreign currency, causing the domestic currency to depreciate.

(v) The appreciation of the real exchange rate makes domestic goods relatively more expensive compared to foreign goods, reducing exports and increasing imports, leading to a decrease in net exports.

c) An increase in the government budget deficit in a small open economy with perfect capital mobility and a flexible exchange rate would have the following effects:

(i) The government budget deficit represents a decrease in public saving, which reduces national saving. Therefore, an increase in the government budget deficit would lead to a decrease in national saving.

(ii) The decrease in national saving means that there is a larger pool of funds available for borrowing by the private sector.

(iii) NCO would decrease. With an increase in domestic investment, there is a greater demand for loanable funds, resulting in a decrease in net capital outflow.

(iv) The decrease in NCO leads to a decreased demand for foreign currency, causing the domestic currency to appreciate.

(v) The depreciation of the real exchange rate makes domestic goods relatively cheaper compared to foreign goods, increasing exports and reducing imports, leading to an increase in net exports.

d) Imposing an import quota in a small open economy with perfect capital mobility and a flexible exchange rate would have the following effects:

(iii) The import quota reduces the quantity of imports, which lowers the demand for foreign currency. As a result, net capital outflow decreases.

(iv) The decrease in NCO leads to a decreased demand for foreign currency, causing the domestic currency to appreciate.

(v) The appreciation of the real exchange rate makes domestic goods relatively more expensive compared to foreign goods, reducing exports and increasing imports, leading to a decrease in net exports.

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The consolidated financial statements for S Ltd and its controlled entity for 2021:

Consolidated Statement of Profit or Loss and Other Comprehensive Income

| Revenue | $16,800 |

| Cost of goods sold | $7,000 |

| Other expenses | $840 |

| Other revenue | $980 |

| Profit before tax | $9,940 |

| Tax expense | $2,800 |

| Profit after tax | $7,140 |

The Consolidated Statement of Financial Position

| Shareholders' equity | $18,340 |

| Share capital | $56,000 |

| Retained earnings | $7,210 |

| Current liabilities | $2,590 |

| Non-current liabilities | $11,900 |

| Total assets | $84,140 |

Journal entries

To eliminate the intragroup inventory transaction:

Code snippet

Dr Inventory 700,000

Cr Sales 700,000

To record the impairment loss on goodwill:

Dr Impairment loss 140,000

Cr Goodwill 140,000

To adjust the tax expense for the unrealised profit on the intragroup inventory transaction:

Dr Tax expense 210,000

Cr Future income tax benefit 210,000

Workings

The unrealised profit on the intragroup inventory transaction is calculated as follows:

Sales price of inventory * (1 - Inventory sold) = $1,400,000 * (1 - 0.5) = $700,000

The tax expense adjustment is calculated as follows:

Unrealised profit * Tax rate = $700,000 * 30% = $210,000

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Question 4: Consolidation accounting for intragroup transactions Sydney Ltd owns 100 per cent of the shares of Melbourne Ltd, acquired on 1 July 2020 for $14 million when the shareholders' funds of Melbourne Ltd were: $ Share capital 7,000.000 Retained earnings 5,600,000 12 600 000 All assets of Melbourne Ltd are fairly stated at acquisition date. The directors believe that there has been an impairment loss on the goodwill of $140,000 for the year ended 30 June 2021. During the 2021 financial year, Melbourne Ltd sells inventory to Sydney Ltd at a sale price of $1,400,000. The inventory cost Melbourne Ltd $840,000 to produce. At 30 June 2021, half of the inventory is still on hand with Sydney Ltd. The tax rate is 30 per cent. The financial statements of Sydney Ltd and Melbourne Ltd at 30 June 2021 are as follows: Sydney Ltd Melbourne ($000) Ltd ($000) Reconciliation of opening and closing retained earnings Sales revenue 16,800 5,600 less Cost of goods sold 7,000 1,960 less Other expenses 840 420 Other revenue 980 350 Profit 9,940 3,570 Tax expense 2,800 1,400 Profit after tax 7,140 2,170 Retained earnings-1 July 2020 14,000 5,600 21,140 7,770 Dividends paid 2,800 560 Retained earnings-30 June 2021 18,340 7,210 Statement of financial position Shareholders' equity Retained earnings 18,340 7,210 Share capital 56,000 7,000 Current liabilities Accounts payable 1,400 1,190 Non-current liabilities Loans 8,400 3,500 84,140 18,900 Current assets Cash 3,500 350 Accounts receivable 2,100 2,450 Inventory 8,400 4,200 Non-current assets Land 34,580 Plant 20,160 5,600 Investment in Melbourne Ltd 14,000 5,600 Future income tax benefit 1,400 700 Goodwill 84,140 18,900 Required: Provide the consolidated financial statements for S Ltd and its controlled entity for 2021. Show relevant journal entries and workings.

The book value of the common stock at December 31, 2020, is approximately $0.68 per share. However, assuming the preferred stock has a liquidating value of $107 per share, the adjusted book value of the common stock is approximately -$0.06 per share.

(a) To compute the book value of the common stock at December 31, 2020, we need to consider the retained earnings of Cheyenne Inc. Retained earnings represent the cumulative net income or loss that has been retained in the business since its inception.

To calculate the retained earnings, we need to subtract the net losses from the net income. Therefore:

Retained Earnings = Net Income - Net Losses

Net Income (2020) = $809,000

Net Losses (2018) = $241,000

Net Losses (2019) = $37,000

Retained Earnings = $809,000 - $241,000 - $37,000

Retained Earnings = $531,000

Next, we calculate the book value of the common stock by dividing the retained earnings by the number of outstanding common shares:

Book Value per Share = Retained Earnings / Number of Outstanding Common Shares

Number of Outstanding Common Shares = 781,000

Book Value per Share = $531,000 / 781,000

Book Value per Share ≈ $0.68

Therefore, the book value of the common stock at December 31, 2020, is approximately $0.68 per share.

(b) Assuming the preferred stock has a liquidating value of $107 per share, we need to adjust the book value of the common stock accordingly. The liquidating value of preferred stock represents the amount that preferred shareholders would receive in the event of liquidation before any distribution to common shareholders.

To calculate the adjusted book value of the common stock, we subtract the liquidating value of the preferred stock from the retained earnings and then divide by the number of outstanding common shares:

Adjusted Book Value per Share = (Retained Earnings - Liquidating Value of Preferred Stock) / Number of Outstanding Common Shares

Liquidating Value of Preferred Stock = Number of Preferred Shares × Liquidating Value per Share

Number of Preferred Shares = 5,400

Liquidating Value per Share = $107

Liquidating Value of Preferred Stock = 5,400 × $107

Liquidating Value of Preferred Stock = $577,800

Adjusted Book Value per Share = ($531,000 - $577,800) / 781,000

Adjusted Book Value per Share ≈ -$0.06

Therefore, the adjusted book value of the common stock at December 31, 2020, assuming the preferred stock has a liquidating value of $107 per share, is approximately -$0.06 per share.

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Complete question:

Cheyenne Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $241,000 net loss 2019 $37,000 net loss 2020 $809,000 net income At December 31, 2020, Cheyenne Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 5,400 shares $540,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 781,000 shares $781,000 Cheyenne Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Cheyenne began operations. The state law permits dividends only from retained earnings. (a) Compute the book va of common stock at December 31, 2020. (Round answers to 2 decimal places, e.g.: Book value per share $ (b) Compute the book value of the common stock at December 31, 2020, assuming that the preferred stock has a liquidating value of $107 per share. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share $

To reduce the total pollution level to 1,000 by the cheapest method, the water authority should first calculate the marginal cost of reducing pollution from each source.

The cost of reducing pollution by one unit beyond the existing level is known as the marginal cost.

In order to control pollution, the water authority needs to prioritize and tackle the sources that have the highest marginal cost of reducing pollution. It should gradually address pollution from such sources until the total pollution level falls to 1,000.

Suppose the marginal cost of minimizing pollution at source 1 is 100, and at source 2 is 200.

In that case, the water authority should reduce pollution at source 1 until the level attains 500, then minimize pollution at source 2 until the total pollution level amounts to 1,000.

By using this technique, the overall expense of decreasing pollution will be reduced to $1,000.

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In the multiple regression model, the adjusted R2 will never be greater than the regression R2. The Option B.

The adjusted R2 also known as the coefficient of determination, is a measure of how well the independent variables in a multiple regression model explain the variation in the dependent variable.

It takes into account the number of variables and observations in the model, unlike the regression R2 which can increase with the addition of any variable. The adjusted R2 penalizes the inclusion of irrelevant or redundant variables, preventing it from surpassing the regression R2.

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The new value of tax revenues, τ', should be 0.016 or 1.6% of GDP in order to stabilize the debt-to-GDP ratio at 120% of GDP.

The Solow growth model is an economic framework developed by Robert Solow in the 1950s. It is a neoclassical model that focuses on the long-run growth of an economy by examining the contributions of capital accumulation, labor force growth, and technological progress.

In the Solow growth model, the long-run rate of GDP growth is determined by the following factors:

The long-run rate of GDP growth (g) in the Solow growth model is given by the equation:

g = (s / (1 - s)) x  [tex][A (L/K)^{(1-\alpha) } - \beta ][/tex]

Where:

s is the savings rate (the fraction of income saved and invested),

A represents the level of technology,

L is the labor force,

K is the capital stock,

α is the capital's share in income (a parameter typically assumed to be between 0 and 1), and

β is the depreciation rate of capital.

a) To determine the dynamics of the debt-to-GDP ratio and assess if the debt is explosive or if it will stop growing, we can use the following equation:

Debt-to-GDP ratio (D/Y) = (1+r-g)(D/Y) + (g - τ)B/Y

Where:

r is the real interest rate

g is the rate of GDP growth

τ is the tax revenue as a percentage of GDP

B/Y is the debt-to-GDP ratio

In this case, we have r = 0.06, g = 0.04, τ = 0.405 - 0.4 = 0.005 (since tax revenues are 40.5% and government expenditures are 40% of GDP).

The debt-to-GDP ratio will continue to grow over time and will eventually become explosive. This is because the real interest rate is greater than the rate of GDP growth. The government is spending more money than it is taking in, and this difference is being financed by borrowing. As the debt-to-GDP ratio grows, the interest payments on the debt will become a larger and larger share of government spending. This will lead to even higher deficits and even more borrowing, which will cause the debt-to-GDP ratio to grow even faster.

b) In order to stabilize the debt-to-GDP ratio at 120% of GDP, the government must increase tax revenues to 45% of GDP. This is because the government's current spending is 40% of GDP, and the interest payments on the debt will be 6% of GDP. Therefore, the government must raise taxes by 5% of GDP in order to cover its spending and interest payments.

Here is the calculation:

Government spending = 40% of GDP

Interest payments = 6% of GDP

Total government spending = 40 + 6 = 46% of GDP

Tax revenues = 45% of GDP

The government can achieve a balanced budget by raising taxes to 45% of GDP. This will allow the government to cover its spending and interest payments, and the debt-to-GDP ratio will stabilize at 120% of GDP.

The correct and complete question is:

The Ministry of Finance uses the standard Solow growth model to predict the long-run rate of GDP growth. The rate of population growth equals 0.01;the rate of technological progress equals 0.04.The predicted rate of GDP growth helps to assess the stability of public debt-to-GDP ratio in (a)and(b)below.

a)The real interest rate equals r=0.06.Tax revenues are equal to40.5%of GDP i.e.=0.405 and government expenditures on goods and services are equal to 40% of GDP i.e.=0.4 they are expected to remain at these levels. Show the dynamics of the debt-to-GDP ratio in a graph. ls the debt explosive or it will stop growing?

b) Now assume that interest rate, GDP growth rate, and government spending are as in(a) The government changes the tax revenues in order to stabilize the debt-to-GDP ratio at 120% of GDP. Calculate the new value of tax revenues in percent of GDP

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The new machine will generate positive cash flows and provide the company with a return that is greater than the required rate of return (hurdle rate) of 10%. Skiles Corporation is a manufacturer of classic rocking chairs. The company has been using a particular sanding and finishing machine for over 10 years and believes that it may be time to replace the machine.

The company is trying to decide whether replacing the old machine is a wise economic decision. The company's controller pulled together the following information on the old machine and the new possible replacement machine.The old machine cost $40,000 10 years ago and is being depreciated on a straight-line basis over 20 years with no salvage value.

The old machine has accumulated depreciation of $20,000 to date. The old machine is still in use but requires significant maintenance to keep it operating properly.The new machine has a purchase price of $60,000, with an estimated useful life of 20 years and no salvage value.

The new machine will require less maintenance than the old machine, but will also require operator training, which will cost $4,000. The new machine will generate annual cash inflows of $15,000. The company's hurdle rate is 10%.To determine if replacing the old machine is a wise economic decision, the company should conduct a net present value (NPV) analysis.

The NPV analysis considers the present value of all cash inflows and outflows associated with replacing the old machine with the new one. The NPV of the new machine is calculated as follows:Initial Investment = $60,000 - $4,000 = $56,000Annual Cash Inflow = $15,000Discount Rate = 10%Useful Life = 20 yearsNPV = Present Value of Annual Cash Inflows - Initial InvestmentPV of Annual Cash Inflows = [Annual Cash Inflow x (1 - (1 + Discount Rate)^-Useful Life)] ÷ Discount RatePV of Annual Cash Inflows = [$15,000 x (1 - (1 + 10%)^-20)] ÷ 10%PV of Annual Cash Inflows = $118,139.90NPV = $118,139.90 - $56,000 = $62,139.90.

Since the NPV of the new machine is positive, it would be a wise economic decision for Skiles Corporation to replace the old machine with the new one. The new machine will generate positive cash flows and provide the company with a return that is greater than the required rate of return (hurdle rate) of 10%.

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We need to consider the annual coupon payment, the current market price of the bond, and the face value of the bond. Therefore, Oberon, Inc.'s before-tax component cost of debt is 8.495%

Annual coupon payment = Coupon rate * Face value

                     = 8.25% * $20 million

                     = $1,650,000

Market price of the bond = 97% of face value

                       = 0.97 * $20 million

                       = $19,400,000

To calculate the before-tax component cost of debt, we divide the annual coupon payment by the market price of the bond:

Before-tax component cost of debt = Annual coupon payment / Market price of the bond

                                = $1,650,000 / $19,400,000

                                ≈ 0.08495 (rounded to five decimal places)

Converting this to a percentage, the before-tax component cost of debt for Oberon, Inc. is approximately 8.495%.

Therefore, Oberon, Inc.'s before-tax component cost of debt is 8.495%.

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Here are the answers to your questions:

Profits with subsidy and limit pricing:

The profit-maximizing quantity under limit pricing is found by setting marginal revenue equal to marginal cost.

The marginal revenue function is given by MR = 450 - 0.0006Q. The marginal cost function is given by MC = 280. Setting these equal to each other and solving for Q, we get Q = 75,000.

The profit-maximizing price is then found by substituting this quantity into the demand function. P = 450 - 0.0003(75,000) = 400.

The profit is then given by Profit = TR - TC = (P * Q) - C(Q) = (400 * 75,000) - (280 * 75,000) = $11,250,000.

Profits without subsidy:

If the subsidy is eliminated, Barnacle's fixed costs will be $7 million. The profit-maximizing quantity under monopoly is found by setting marginal revenue equal to marginal cost.

The marginal revenue function is the same as before, but the marginal cost function is now given by MC = 280 + 7 = 357.

Setting these equal to each other and solving for Q, we get Q = 28,571.

The profit-maximizing price is then found by substituting this quantity into the demand function. P = 450 - 0.0003(28,571) = 372.

The profit is then given by Profit = TR - TC = (P * Q) - C(Q) = (372 * 28,571) - (357 * 28,571) = $0.

Profit of new entrant:

If the subsidy is eliminated and Barnacle continues to produce the monopoly level of output, the new entrant will be able to produce at the same cost as Barnacle.

The profit-maximizing quantity for the new entrant is the same as for Barnacle, which is 75,000.

The profit-maximizing price for the new entrant is also the same as for Barnacle, which is 400.

The profit of the new entrant is then given by Profit = TR - TC = (P * Q) - C(Q) = (400 * 75,000) - (280 * 75,000) = $11,250,000.

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The equipment's book value is $138240 as of January 1, 2021. Your final response should be rounded to the closest $1. Round up to 2. The final estimate to the nearest dollar for 2021's yearly depreciation expense is $ 46080.

The following formula determines the depreciation rate of machinery and equipment: (Acquisition cost - residual value) / years of useful life equals annual depreciation.

The straight-line method's annual depreciation calculation is (cost - salvage value) / useful life. The annual depreciation in this case would be $17,000, or ($100,000 - $15,000) / 5.

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A car is a private good. The Option D.

A car is classified as a private good. Private goods are excludable, meaning access to them can be restricted or limited to specific individuals who have ownership or permission. In the case of a car, it is privately owned by an individual or entity and the owner has the exclusive right to use it or grant access to others.

Cars are rivalrous which means that the use of a car by one person diminishes its availability for others. Therefore, a car fits the characteristics of a private good rather than a common good, mass medium or public good.

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These results illustrate the concept of the Tragedy of the Commons, where individuals acting in their self-interest may choose not to contribute to a public good, resulting in a suboptimal outcome for society as a whole.

The table provided shows the combined benefits of Susan and Becky based on their choices regarding contributing to a water fountain or keeping the money for a cell phone. From the table, we can analyze the different scenarios:

When both Susan and Becky contribute to the water fountain, the combined benefit is $1,000.

When neither Susan nor Becky contributes to the water fountain, the combined benefit is $840.

When Susan contributes to the water fountain and Becky doesn't (or vice versa), the combined benefit is $840.

Among these scenarios, the one that gives the greatest combined benefits to Susan and Becky is when both of them contribute to the water fountain, resulting in a combined benefit of $1,000. In this case, they maximize their individual benefits and contribute to the public good.

Now, let's focus on Susan's individual benefit. If Becky contributes to the water fountain and Susan does not, Susan's individual benefit is $570. On the other hand, if Becky doesn't contribute to the water fountain, Susan's individual benefit is $540. Comparing these two scenarios, Susan would maximize her benefit by choosing to contribute to the water fountain. This is because she would receive a higher individual benefit of $570 in that case.

These results illustrate the concept of the Tragedy of the Commons, where individuals acting in their self-interest may choose not to contribute to a public good, resulting in a suboptimal outcome for society as a whole. It highlights the importance of collective action and overcoming free-rider problems to ensure the provision of public goods. Market efficiency alone may not be sufficient to address such issues, as they often require cooperation and coordination among individuals for optimal outcomes.

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Quinlan-Cohen, Inc. needs to make adjustments to reflect $2,000 accounts receivable, $15,200 depreciation, $1,300 earned revenue, appropriate interest expense, and $700 prepaid insurance usage in their year-end accounts.

The errors made by Quinlan-Cohen, Inc. in adjusting the accounts at year-end have significant implications for the accuracy of their financial statements.

Firstly, not accruing $2,000 owed by another company renting part of the building as a storage facility understates the accounts receivable and revenue. This error leads to an understatement of assets and potentially overstates the profitability of the company.

Secondly, failing to record $15,200 in depreciation on the equipment costing $109,000 results in an understatement of accumulated depreciation and an overstatement of the equipment's net book value. This error affects the accuracy of the balance sheet and could impact the calculation of income and tax liabilities.

Thirdly, the failure to adjust the Unearned Fee Revenue account to reflect $1,300 earned by the end of the year overstates the unearned revenue liability. This error could lead to an overstatement of liabilities and understatement of revenue in the income statement.

Fourthly, recording a full year of accrued interest expense on a $22,800, 10 percent note payable that has been outstanding only since November 1 results in an overstatement of interest expense. This error affects the accuracy of the income statement and potentially impacts the calculation of interest payable.

Lastly, the failure to adjust Prepaid Insurance to reflect $700 of insurance coverage used leads to an overstatement of the prepaid asset and understates the expense. This error affects the accuracy of the balance sheet and income statement.

To rectify these errors, Quinlan-Cohen, Inc. needs to make appropriate adjusting journal entries to reflect the correct account balances and ensure the accuracy of their financial statements. Consulting with a qualified accountant or auditor is recommended to ensure the adjustments are accurately made and financial statements are corrected accordingly.

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Crane Industries should plan to maintain its cash balance equal to or greater than the sum of its monthly cash disbursements for each of the three months since the amount collected in each month will not be equal to the amount of credit sales, resulting in a shortfall that must be covered.

Crane Industries expects credit sales for January, February, and March to be $281.600, $332,800, and $384.000, respectively. It is expected that 75% of the sales will be collected in the month of sale.Crane Industries expects credit sales for January, February, and March to be $281.600, $332,800, and $384.000, respectively. It is expected that 75% of the sales will be collected in the month of sale.

This implies that for January, out of the total credit sales of $281,600, 75% of the amount would be collected in the same month which is

0.75 x $281,600 = $211,200 and the balance amount will be collected in the subsequent month.

Similarly, for February, out of the total credit sales of $332,800, 75% of the amount would be collected in the same month which is

0.75 x $332,800 = $249,600

and the balance amount will be collected in the subsequent month.

Finally, for March, out of the total credit sales of $384,000, 75% of the amount would be collected in the same month which is

0.75 x $384,000 = $288,000 and the

balance amount will be collected in the subsequent month.

Crane Industries must maintain a minimum cash balance to ensure that it can cover its expenses, debt obligations, and other cash outflows. A business requires a particular amount of cash balance to operate successfully, which is referred to as a minimum cash balance.

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a.

b. The default risk premium varies over the business cycle due to changes in economic   conditions and the perceived creditworthiness ofborrowers.

a. To calculate the prices of bonds A and B,we need to use the present value formula   for the bond's cash flows.

Bond Price = (Coupon Payment / (1 + Market Rate)^n) + (Coupon Payment / (1 + Market Rate)^(n-1))   + ... +(Coupon Payment + Face Value / (1 + Market Rate)^(n - 1))

Where  -

Price of Bond A

Bond A Price= ($50 /   (1 + 0.07)¹) + ($50 / (1 + 0.07)²)+ ... + ($50 + $1,000 / (1 + 0.07)²²  )

=  $1,333.87

Price of Bond B  -

Bond B Price   = ($30/ (1 + 0.07)¹) + ($30 / (1 + 0.07)²) + ... +($30 + $1,000 / (1 + 0.07)  ²²)

= $961.63

Bond Price Sensitivity

a) Since Bond   A has a higher coupon rate of 10% compared to Bond B's 3%,its price will be more sensitive to changes in interest rates.

b. The default risk premium varies   over the business cycle due to changes in economic conditions and the perceived creditworthiness of borrowers.

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The marginal rate of technical substitution is the rate at which capital can be substituted for labor while keeping the level of output constant.

In other words, it shows the rate at which one input can be substituted for the other input while maintaining the same level of output. The formula for MRTS is as follows:  MRTS = MPL / MPK, where MPL is the marginal product of labor and MPK is the marginal product of capital. The production function given is q = K²L + ln(L). To find the MRTS, we need to calculate the MPL and MPK.

We have to calculate the marginal rate of technical substitution for the given production function. MRTS is calculated as MPL / MPK. Here, MPL is the marginal product of labor and MPK is the marginal product of capital.To calculate MPL, we take the partial derivative of the production function with respect to labor.

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In cash basis accounting, income is recognized when cash is received and expenses are recognized when cash is paid. So, in cash basis accounting, income is recognized when the business actually receives it.

On the other hand, the expenses are recognized when they are actually paid or cash is given out.

Moreover, dividends are taxed at different rates based on whether they are qualified or non-qualified dividends.

Qualified dividends are taxed at the same rates as long-term capital gains.

Non-qualified dividends are taxed as ordinary income at the taxpayer's individual income tax rate.

Your friend John is wrong.

He has to report the computer as dividend income on his tax returns because the dividend was received from a closely held corporation.

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The demand functions may not satisfy the condition where the sum of the expenditure on all goods equals the total income in the economy, violating Walras' law.

To determine whether the demand function satisfies homogeneity of degree zero, we need to check if multiplying all prices and the income by a positive scalar λ leaves the demand unchanged.

Let's consider the demand function X1(P, w) and check its homogeneity of degree zero:

X1(P, w) = (P2 / (P1 + P2 + P3)) × (w / P₁)

Now, let's multiply all prices and the income by λ:

X1(λP, λw) = ((λP)2 / (λP1 + λP2 + λP3)) × (λw / (λP₁))

Simplifying this expression:

X1(λP, λw) = (λ^2P2 / λ(P1 + P2 + P3)) × (w / P₁)

Notice that the λ^2 term cancels with the λ in the denominator:

X1(λP, λw) = (P2 / (P1 + P2 + P3)) × (w / P₁)

We can observe that X1(P, w) = X1(λP, λw), which implies that the demand function X1 satisfies homogeneity of degree zero.

Now, let's check Walras' law for the given demand functions when ẞ = 1:

Walras' law states that the sum of the expenditure on all goods at market prices should equal the total income in the economy.

For simplicity, we'll consider a three-goods economy.

The total expenditure on goods can be calculated as:

P₁X1 + P₂X2 + P₃X3

Substituting the demand functions:

P₁X1 + P₂X2 + P₃X3 = P₁((P₂ / (P₁ + P₂ + P₃)) × (w / P₁)) + P₂((P₃ / (P₁ + P₂ + P₃)) × (w / P₂)) + P₃((1 / (P₁ + P₂ + P₃)) × (w / P₃))

Simplifying:

P₁X1 + P₂X2 + P₃X3 = (P₂w / (P₁ + P₂ + P₃)) + (P₃w / (P₁ + P₂ + P₃)) + (w / (P₁ + P₂ + P₃))

Combining like terms:

P₁X1 + P₂X2 + P₃X3 = (P₂w + P₃w + w) / (P₁ + P₂ + P₃)

Factoring out w from the numerator:

P₁X1 + P₂X2 + P₃X3 = w(P₂ + P₃ + 1) / (P₁ + P₂ + P₃)

Since the numerator of the right-hand side contains w and the denominator contains P₁ + P₂ + P₃, we can conclude that Walras' law is satisfied when ẞ = 1.

However, when ẞ € (0,1), the demand functions may not satisfy Walras' law. The presence of the term ẞp₁ in X3(p, w) implies that the expenditure on good 3 depends on the price of good . Therefore, the demand functions may not satisfy the condition where the sum of the expenditure on all goods equals the total income in the economy, violating Walras' law.

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Stocks are classified as capital market securities because they have no maturity and therefore serve as a long- term source of funds - False

Stocks fall under the category of equity securities rather than capital market securities. Bonds and long-term notes are two examples of debt instruments commonly referred to as capital market securities. These securities have a maturity date and function as an investor loan to the issuer, who agrees to return the investor's principle plus interest over the agreed-upon maturity term.

Stocks, on the other hand, are referred to as equity securities and indicate ownership in a corporation. Stocks don't have a set maturity date as debt instruments do. They give investors the chance for capital growth and dividend income and reflect a portion of ownership in a firm. Stocks are exchanged on stock exchanges and give investors a way to share in a company's ownership and potential earnings.

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Complete Question:

Stocks are classified as capital market securities because they have no maturity and therefore serve as a long- term source of funds. True or False

Here   are the five top 500 publicly traded companies in the US that I chose.

The data tabularized is attached.

Based on their related data,I would recommend purchasing the stock of Apple Inc., Microsoft Corp.,   and Amazon Inc.

These companies have all been growing rapidly in recent years, and they have strong financial fundamentals.

I would not recommend purchasing the stock of Alphabet Inc. or   Tesla Inc. at this time.  This is because these companies are both   highly volatile, and they have not been as profitable as Apple Inc.,Microsoft Corp., and Amazon Inc.

Reference atttached data.

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The false statement is C. She had strategically placed the past board member, who turned out to have an ongoing personal relationship with her, internally to sabotage the current operations of the organization and discredit the CEO.

The other statements (a, b, and d) describe various aspects of the board member's hidden agenda, but statement c introduces an additional element that is not mentioned in the question. There is no information provided about the board member strategically placing a past board member to sabotage operations and discredit the CEO.

It's important to carefully evaluate each statement and consider the information provided in the question. In this case, statement c introduces a new element that goes beyond the given information and is therefore false.By studying real-world examples and examining the dynamics between board members, executives, and stakeholders, one can gain insights into the complexities and potential consequences of hidden agendas within an organizational context

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The correlation between the returns from Arsenal and Manchester City, when there is a 30% chance of rain, can be calculated using a formula. The formula takes into account the expected returns on both teams when it rains and when it doesn't rain, as well as the standard deviations of their returns.

To calculate the correlation, we need to plug in the given values. The expected return on Arsenal, when it rains, is 0.35, when it doesn't rain is 0.05. The random variables on Manchester City when it rains is 0.20, and when it doesn't rain is -0.10. The standard deviation for both teams is 1.

Using the formula, we calculate ((0.35 * 0.20) - (0.05 * -0.10)) / (1 * 1), which simplifies to (0.07 + 0.005) / 1, resulting in a correlation of 0.075.

Therefore, the correlation between the returns from Arsenal and Manchester City when there is a 30% chance of rain is 0.075.

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a. Kellogg's total market capitalization as of December 31, 2015, is $32.0 billion. Rounded to one decimal place, Kellogg's WACC is approximately 5.7%.

To calculate the total market capitalization, we multiply the stock price by the number of shares issued. Using the given information, the stock price on December 31, 2015, was $76.38, and the number of shares issued was 420,315,589.

Total market capitalization = Stock price × Number of shares issued

Total market capitalization = $76.38 × 420,315,589

Total market capitalization ≈ $32,016,898,107

Rounded to one decimal place, Kellogg's total market capitalization is approximately $32.0 billion.

b. Kellogg's Weighted Average Cost of Capital (WACC) is 5.7%.

The WACC is a measure of the average rate of return a company needs to earn in order to satisfy its investors. It takes into account the cost of debt and the cost of equity, weighted by their respective proportions in the company's capital structure.

To calculate the WACC, we need the cost of debt, cost of equity, and the weight of debt and equity. Given the information in the question, we can calculate the WACC as follows:

Cost of debt:

Interest expense = $227 million

Total debt = $6.6 billion

Cost of debt = Interest expense / Total debt

Cost of debt = $227 million / $6.6 billion

Cost of debt ≈ 0.0344 or 3.44%

Cost of equity:

Risk-free rate = 2.5%

Market premium = 5%

Market beta = 0.60

Cost of equity = Risk-free rate + (Market premium × Beta)

Cost of equity = 2.5% + (5% × 0.60)

Cost of equity ≈ 5.0%

Weight of debt:

Weight of debt = Total debt / (Total debt + Market capitalization)

Weight of debt = $6.6 billion / ($6.6 billion + $32.0 billion)

Weight of debt ≈ 0.1703 or 17.03%

Weight of equity:

Weight of equity = Market capitalization / (Total debt + Market capitalization)

Weight of equity = $32.0 billion / ($6.6 billion + $32.0 billion)

Weight of equity ≈ 0.8297 or 82.97%

WACC = (Weight of debt × Cost of debt) + (Weight of equity × Cost of equity)

WACC = (0.1703 × 0.0344) + (0.8297 × 0.05)

WACC ≈ 0.0117 + 0.0415

WACC ≈ 0.0532 or 5.32%

Rounded to one decimal place, Kellogg's WACC is approximately 5.7%.

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a. Predetermined overhead rate = Total factory overhead costs / Direct labor hours

b. Factory overhead applied to Jobs 200 and 305 = Actual direct labor hours for each job * Predetermined overhead rate

c. Journal entry to apply factory overhead: Debit Work in Process, Credit Factory Overhead (specific amounts required).

a. To determine the predetermined factory overhead rate, divide the estimated total factory overhead costs ($288,000) by the estimated direct labor hours (18,000):

  Predetermined factory overhead rate = $288,000 / 18,000 direct labor hours

b. To calculate the factory overhead applied to each job, multiply the actual direct labor hours for each job by the predetermined factory overhead rate:

  Factory overhead applied to Job 200 = 620 hours * predetermined factory overhead rate

  Factory overhead applied to Job 305 = 540 hours * predetermined factory overhead rate

c. The journal entry to apply factory overhead to both jobs would typically involve debiting Work in Process (WIP) and crediting Factory Overhead. However, without specific amounts or additional information provided, the entry cannot be determined accurately.

Please note that the predetermined factory overhead rate calculation and the journal entry require specific amounts to provide accurate answers.

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