Which of the following is a disadvantage of using a percentage-of-sales method to determine the marketing communications budget? A) It assumes competitors know better than the company's own planners. B) It results in high communication expenditures irrespective of what the company can afford. C) It is overly focused on the relationship among communication cost, selling price, and profit per unit. D) It treats sales as what determines communication, rather than as the result of effective communication. E) It is too focused on long-range planning.

Answers

Answer 1

Answer:

d

Explanation:

The different methods of determining marketing budget includes :

Percentage of Sales method. - it is usually used by small businesses. it is when a percentage of sales is used to determine the overall budget of marketing communications.  

Objective and Task method ; this involves a firm determining it objectives and then estimating the cost of reaching these objectives  

Market Share method. - uses its market share to determine its budget

Unit Sales method. - the cost of marketing for one item is determined and then multiplied by the desired sales level


Related Questions

What was the opening price of Dow Jones Industrial Average on Aug 02, 2017 in the format of XXXXX.XX?

Answers

where is the imagery?

Weidner Company sells 22,000 units at $30 per unit. Variable costs are $24 per unit, and fixed costs are $40,000.
Determine:
(a) the contribution margin ratio,
(b) the unit contribution margin, and
(c) income from operations.

Answers

Answer:

See below

Explanation:

a. Contribution margin ratio

= (Unit price - Variable cost per unit) / Unit price

Unit price = $30 per unit

Variable cost per unit = $24 per unit

Therefore,

Contribution margin ratio = ($30 - $24) / $30

Contribution margin = $0.2

b. Unit contribution margin

= Selling price unit - Variable cost per unit

Selling price per unit = $30 per unit

Variable cost per unit = $24

Therefore,

Unit contribution margin = $30 - $24

Unit contribution margin = $6

c. Income from operations

Sales (22,000 units at $30)

$660,000

Less:

Variable cost (22,000 units at $24)

$528,000

Contribution margin

$132,000

Less:

Fixed costs

($40,000)

Net income

$92,000

standards for all managers ethical responsibillities are covered in a companys

Answers

Standards for all managers' ethical responsibilities are covered in a company's code of ethics.

The ethical responsibilities of managers are typically outlined in a company's code of conduct, which outlines the standards of behavior expected of all employees. This code of conduct may include topics such as respect for others, honesty, integrity, and compliance with laws and regulations. Additionally, many companies have specific policies and procedures related to ethical decision-making and the reporting of unethical behavior.

Suppose a major hurricane hits the eastern coast of Florida and only destroys significant amounts of physical capital. All else the same, real gross domestic product (GDP) will ________ in the short run, and real GDP will ________ in the long run. Group of answer choices decline; be permanently lower decline; end up higher than the original level decline; return to the steady state level increase; decrease be unchanged; decline

Answers

Answer: decline; return to the steady state level

Explanation:

Physical capital can help in the production of goods and services. If a significant amount was to be destroyed, this would mean less production of goods. This will therefore lead to a decline in the GDP in the Short run.

In the long run however, the real GDP will return to a steady state where the GDP will become the potential GDP as a result of the physical capital has either been replaced or rebuilt in the future thereby leading to the production level which will increase.

Outsourcing (Make-or-Buy) Decision
Assume a division of Hewlett-Packard currently makes 16,000 circuit boards per year used in producing diagnostic electronic instruments at a cost of $27 per board, consisting of variable costs per unit of $22 and fixed costs per unit of $5. Further assume Sanmina Corporation offers to sell Hewlett-Packard the 16,000 circuit boards for $27 each. If Hewlett-Packard accepts this offer, the facilities currently used to make the boards could be rented to one of Hewlett-Packard's suppliers for $25,000 per year. In addition, $3 per unit of the fixed overhead applied to the circuit boards would be totally eliminated. Calculate the net benefit (cost) to HP of outsourcing the component from Samina-SCI.

Answers

Answer:

If the company makes the units, it will save $7,000 per period.

Explanation:

Giving the following information:

Make in-house:

Number of units= 16,000

Variable cost per unit= $22

Avoidable fixed cost per unit= $3

Buy:

Number of units= 16,000

Buying price= $27

Rent= $25,000

First, we will determine the total cost of each option:

Make:

Total cost= 16,000*(22 + 3)= $400,000

Buy:

Total cost= 16,000*27 - 25,000= $407,000

If the company makes the units, it will save $7,000 per period.

There are two projects under consideration by the Rainbow factory. Each of the projects will require an initial investment of $35,265 and is expected to generate the following cash flows: First Year Second Year Third Year Total Alpha Project $32,000 $22,500 $4,500 $59,000 Beta Project 8,000 23,000 27,627 58,627 A. Calculate the internal rate of return on both projects. Use the IRR spreadsheet function to calculate

Answers

Answer and Explanation:

The computation of the internal rate of return is shown below:

Year            Alpha project Cash flows              Beta project Cash flows

0                   -$35,265                                         -$35,265

1                     $32,000                                         $8,000

2                   $22,500                                          $23,000

3                    $4,500                                           $27,627

IRR                   42%                                                   25%

On January 2, 2021, L Co. issued at face value $22,500 of 2% bonds convertible in total into 1,500 shares of L's common stock. No bonds were converted during 2021. Throughout 2021, L had 1,500 shares of common stock outstanding. L's 2021 net income was $4,500. L's income tax rate is 20%. No potential common shares other than the convertible bonds were outstanding during 2021. L's diluted earnings per share for 2021 would be: Multiple Choice $1.50. $1.62. $1.65. $3.00.

Answers

Answer:

L's diluted earnings per share for 2021 would be $1.62.

Explanation:

Amount of increase in net income if bonds are converted = Total value of convertible bonds * Bond rate * (100% - Tax rate) = $22,500 * 2% * (100% - 20%) = $360

Total earnings available to Equity Shareholders = Net income + Amount of increase in net income if bonds are converted = $4,500 + $360 = $4,860

Number of common shares obtainable from convertible bonds = 1,500

Total number of shares outstanding = Number of shares of common stock outstanding during 2021 + Number of common shares obtainable from convertible bonds = 1,500 + 1,500 = 3,000

Diluted earnings per share = Total earnings available to Equity Shareholders / Total number of shares outstanding = $4,860 / 3,000 = $1.62

Wizard Corp. needs to take out a one-year bank loan of $600,000 and has been offered loan terms by two different banks. One bank has offered a simple interest loan of 10% that requires monthly payments. The loan principal will be paid back at the end of the year. Another bank has offered 7% add-on interest to be repaid in 12 equal monthly installments.
Based on a 360-day year, what will be the monthly payment for each loan for November?
Value
Simple interest monthly payment 58,850.00
Add-on interest monthly payment 48,150.00
42,800.00
53,500.00
Choose the answer that best evaluates the following statement:
A bank loan officer has been approached by a start-up company that needs a five-year loan to purchase the equipment for its first project. The project will have a life of five years. At the end of five years, the equipment will be worthless. The founders of the company told the loan officer that they would be willing to pay a much higher interest rate on a simple interest loan rather than contracting to an add-on interest loan.
A. The loan officer should offer the company an add-on interest loan because there is a high risk that the company will not be able to repay the principal on the loan at the end of the project's life.
B. The loan officer should offer the company a simple interest loan. The bank will make more money in the long run, because it can charge a much higher interest rate.

Answers

Answer: a. $53500

b. A. The loan officer should offer the company an add-on interest loan because there is a high risk that the company will not be able to repay the principal on the loan at the end of the project's life.

Explanation:

a. Based on a 360-day year, the monthly payment for each loan for November will be:

Principal = $600,000

Interest rate = 10%

Simple interest = (P×R×T)/100

= (600000 × 10× 1) /100

= $60000

The simple interest per month which will also be thesame for Novemeber will be:

= 60000/12

= $5000

Since add on interest is 7%, then the interest will be:

= 7% × $600,000

= 0.07 × $600,000

= $42000

Therefore, the interest for month of November will be:

=(600000 +42000)/12

= $642000 / 12

= $53500

b. The answer that best evaluates the statement given is option B. It should be noted that since it's a startup company, there may be challenges in repaying the loan. Therefore, the best scenario will be that the loan should be given on add on interest basis.

Kelly’s Kites began operations on 1/1/11. When preparing her budget for 2012, Kelly estimated in January that she would sell 5,000 kites to local beach shops, for $10 per kite. She estimated that sales would increase 5% each month from the prior month. All sales are made to the local beach shops on credit. Kelly estimates that 50% of the sales will be collected within the same month of the sale, 40% will be collected the following month, and 10% will be collected two months after the sale. Sales in November, 2011 were 3,500 kites, and in December 2011 were 4,000 kites.
a. Prepare the sales budget for the 1st quarter of 2012.
b. Prepare the cash receipts budget for the 1st quarter of 2012.

Answers

Answer:

Total sales for the Quarter1 is $157,630

Total cash receipts for Quarter1 is $148,315

Explanation:

SALES BUDGET      

  Jan Feb Mar Q1

Budgeted Sales units   5,000 5,250 5,513 15,763

Selling price per unit   10 10 10 10

Total Sales   50,000 52,500 55,130 1,57,630

     

EXPECTED CASH COLLECTIONS      

  Jan Feb Mar Q1

Nov month sales   3,500   3,500

Dec month sales   16000 4000  20000

Jan Month sales   25,000 20000 5000 50,000

Feb month sales    26250 21000 47,250

March month sales     27565 27,565

Total Cash Collections   44,500 50,250 53,565 1,48,315

Dwight Donovan, the president of Fanning Enterprises, is considering two investment opportunities. Because of limited resources, he will be able to invest in only one of them. Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of four years and no salvage value. Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $108,000 and for Project B are $48,000. The annual expected cash inflows are $51,270 for Project A and $20,675 for Project B. Both investments are expected to provide cash flow benefits for the next three years. Fanning Enterprises’ desired rate of return is 6 percent. (PV of $1 and PVA of $1) Use appropriate factor(s) from the tables provided.)

A. Compute the net present value of each project. Which project should be adopted based on the net present value approach?

B. Compute the approx. internal rate of return of each project. Which one should be adopted based on the internal rate of return approach?

Answers

The net present value of Project A is $29,045.32, and net present value of project B is $22,264.52. The project that should be adopted based on the net present value is project A.

What is net present value?

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

a. The net present value of Project A:

= Present value of cash inflows - Initial expenditure

= (51,270 x present value interest factor, 6%, 3 years) - 108,000

= 51,270 x 2.673012 - 108,000

= $29,045.32

The net present value of Project B:

= 20,675 × 2.673012 - 33,000

= $22,264.52

b. Calculation of Internal Rate of Return:-

The IRR has been calculated using the financial calculator.

The IRR of Project A is 16% and that of Project B is 14%.

IRR of project A is more than Project B,  which means Project A's return is more than project B. As per IRR Approach Project A is better than Project B.

Therefore, as per IRR and net present value approach Project A should be selected.

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Communication which occurs via a mass
email would fall under which category?
A. a synchronous
C. horizontal
B. vertical
D. synchronous

Answers

Mass email communication is considered to be synchronous communication. The correct answer is option (d).

What is synchronous communication?

Real-time communication among two or more parties is referred to as synchronous communication. A synchronous communication interaction is essentially a live, interactive conversation between two parties. A continuous and constant timed transmission of data blocks is referred to be synchronous. When a lot of data has to be transported fast from one place to another, these connections are employed.

Synchronous is a generic term used to describe events that take place simultaneously. Face-to-face conversation and video chatting are examples of synchronous communication since they entail real-time back and forth. Instant messaging, video conferencing, and phone calls are synchronous communication examples.

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Marathon Company has 10,000 units of its product that were produced last year at a total cost of $150,000. The units were damaged in a rain storm because the warehouse where they were stored developed a leak in the roof. Marathon can sell the units as is for $2 each or it can repair the units at a total cost of $18,000 and then sell them for $5 each. Should Marathon sell the units as is or repair them and then sell them

Answers

Answer: Marathon should repair the units since an income of $12000 will be gotten.

Explanation:

Based on the information given, the following can be deduced:

Revenue when repaired = 10000 × $5 = $50000

Revenue if sold without repair = 10000 × $2 = $20000

Incremental revenue = $50000 - $20000 = $30000

Cost to repair = $18000

Incremental be Income = $30000 - $18000 = $12000

Therefore, Marathon should repair the units since an income of $12000 will be gotten.

You are considering a project that requires an initial investment of $98,000 with a cost of capital of 14%. You expect the project to have a five-year life, and produce cash flows of $19,000 in year 1, $32,000 in year 2, $64,000 in year 3, $26,000 in year 4 and $10,000 in year 5. What is this project’s net present value? Group of answer choices

Answers

Answer:

NPV= 7,076.59

Explanation:

Giving the following information:

Initial investment= $98,000

Cash flows:

Cf1= 19,000

Cf2= 32,000

Cf3= 64,000

Cf4= 26,000

Cf5= 10,000

To calculate the NPV, we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

∑[Cf/(1+i)^n]:

Cf1= 19,000/1.14= 16,666.67

Cf2= 32,000/1.14^2= 24,622.96

Cf3= 64,000/1.14^3= 43,198.18

Cf4= 26,000/1.14^4= 15,394.09

Cf5= 10,000/1.14^5= 5,193.69

∑[Cf/(1+i)^n]= 105,076.59

Now, the NPV:

NPV= -98,000 + 105,076.59

NPV= 7,076.59

Which of the following tasks is the project manager least likely to be involved
in?
O A. Monitoring the budget
B. Defining the project scope
C. Documenting important project changes
D. Running project meetings

Answers

Answer: A

Explanation: I do t see why the project manager would be worried about the money aspect I think he would only be worried about the task part

Using the following information, compute the direct materials used.
Raw materials inventory, January 1 $15000
Raw materials inventory, December 31 35000
Work in process, January 1 18000
Work in process, December 31 12000
Finished goods, January 1 40000
Finished goods, December 31 32000
Raw materials purchases 1,600,000
Direct labor 760,000
Factory utilities 150,000
Indirect labor 50,000
Factory depreciation 400,000
Operating expenses 420,000
A. $1,100,000.
B. $1,115,000.
C. $1,135,000.
D. $1,085,000.

Answers

Answer:

$1,580,000

Explanation:

Computation for the direct materials used

Using this formula

Direct Material Used = Raw materials purchases + Opening Stock of Raw Material - Closing Stock of Raw Material

Let plug in the formula

Direct Material Used= $1,600,000 + $15,000 - $35,000

Direct Material Used= $1,580,000

Therefore The Direct Material Used is $1,580,000

Vijay Inc. purchased a three-acre tract of land for a building site for $310,000. On the land was a building with an appraised value of $125,000. The company demolished the old building at a cost of $12,600, but was able to sell scrap from the building for $1,610. The cost of title insurance was $880 and attorney fees for reviewing the contract were $410. Property taxes paid were $3,000, of which $170 covered the period subsequent to the purchase date. The capitalized cost of the land is:

Answers

Answer:

See below

Explanation:

Given the above information, the capitalised cost of the land is computed as seen below;

hnberg Corporation had 540,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 160,000 shares of convertible preferred stock. The preferred shares are convertible into 320,000 shares of common stock. During the year Ahnberg paid $96,000 cash dividends on the preferred stock. Net income was $906,000. What were Ahnberg's basic and diluted earnings per share for the year

Answers

Answer: See explanation

Explanation:

Ahnbergs basic earnings per share will be calculated as:

= (Net Income - preferred dividends)/Weighted average shares outstanding

= ($906,000 - $96,000) / 540,000

= $810000 / 540000

= 1.50

The diluted earnings per share will be:

= Total Income - preferred dividends/(outstanding shares + Diluted Shares)

= 906000 / (96000 + 320000)

= 906000 / 416000

= 2.18

Jane plans on making flyers for the church bake sale. But she's running low on printer paper, so she takes home some paper from work to print them out. It's for
a good cause, but is this ethical?
Yes
No

Answers

It is not ethical for Jane to take papers from work to print flyers for the church bake sale. While the bake sale may be for a good cause, it is not appropriate for Jane to use resources from her work for personal gain or for the benefit of a third party.

Using company resources for personal or external purposes is generally considered to be a violation of ethical standards and workplace policies. In most cases, employees are expected to use company resources only for business-related purposes, and any personal use is strictly prohibited. This includes using company resources such as office supplies, equipment, and facilities for personal projects or for the benefit of a third party.

In addition to the ethical concerns, there may also be practical considerations to consider. For example, if Jane takes a significant amount of paper from work, it could potentially impact the company's operations or disrupt the workflow of her coworkers.

Overall, it is important for Jane to act responsibly and ethically in her use of company resources. Instead of taking papers from work, it would be more appropriate for her to purchase her own paper or seek permission from her employer before using company resources for personal purposes.

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George has the following capital gains and losses for 2019: $6,000 STCL, $5,000 28% gain, $2,000 25% gain, and $6,000 0%/15%/20% gain. Which of the following is correct: Question 28 options: A) The net capital gain is composed of $6,000 25% gain and $1,000 0%/15%/20% gain. B) The net capital gain is composed of $5,000 28% gain and $2,000 0%/15%/20% gain. C) The net capital gain is composed of $3,000 28% gain, $2,000 25% gain, and $2,000 0%/15%/20% gain. D) The net capital gain is composed of $1,000 28% gain and $6,000 0%/15%/20% gain. E) The net capital gain is composed of $1,000 25% gain and $6,000 0%/15%/20% gain.

Answers

Answer:

E) The net capital gain is composed of $1,000 25% gain and $6,000 0%/15%/20% gain.

Explanation:

Calculation to determine what the net capital gain is composed of

Based on the information information given the amount of $6,000 STCL will have to offsets the $5,000 28% gain which is represent the highest tax rate gain while -$1,000 of 25% gain which is the amount that remain as loss will as well offsets the next highest tax rate gain.

Hence

Net capital gain= $6,000 STCL - $5,000 28% gain

Net capital gain= - $1,000 of 25% gain

Therefore the net capital gain is composed of

$1,000 25% gain and $6,000 0%/15%/20% gain.

_______involves streamlining the processes and communications between the buyer and supplier using software applications​

Answers

Answer:supplier relationship management

Explanation:

Supplier relationship management concerns facilitating the operations and communications between the buyer and supplier using software applications​.

What is supplier relationship management?

Supplier relationship management (SRM) is the method of determining the providers or suppliers that are essential to a business and executing a system of managing connections with those critical suppliers.

The objective of SRM is to increase the importance of supplier connections and to streamline acquisition processes. Without an adequate SRM technique, buyers risk cut off supply chains, etc.

Therefore, Supplier relationship management is concerned with the facilitation of operations and communication between the buyers and the suppliers.

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Burns Industries currently manufactures and sells 18,000 power saws per month, although it has the capacity to produce 33,000 units per month. At the 18,000-unit-per-month level of production, the per-unit cost is $61, consisting of $38 in variable costs and $23 in fixed costs. Burns sells its saws to retail stores for $78 each. Allen Distributors has offered to purchase 4,800 saws per month at a reduced price. Burns can manufacture these additional units with no change in its present level of fixed manufacturing costs. Using an incremental analysis approach, Burns should consider accepting this special order only if the price per unit offered by Allen is at least:

Answers

Answer:

Burns Industries

Using an incremental analysis approach, Burns should consider accepting this special order only if the price per unit offered by Allen is at least:

above $38 (the variable cost per unit).

Explanation:

a) Data and Calculations:

Monthly production and sales units = 18,000

Production capacity per month = 33,000 units

Costs at the 18,000-unit-per-month level of production:

Variable costs = $38

Fixed costs =        23

Total per unit =  $61

Selling price per unit = $78

Special offer for 4,800 saws per month, without changing the fixed manufacturing costs.

b) Incremental analysis approach is a management decision technique that specifies that only relevant, marginal, or differential costs should be taken into account.  It rules out the inclusion of sunk or fixed costs, which do not change between alternatives.

Lynn has an account that ears interest at annual rate of 5% percent. Interest is compounded quarterly. Lynn’s account is $4000. What is the balance in her account at the end of the year

Answers

Answer:

Ending balance in account = $4,203.8 (Approx.)

Explanation:

Given:

Starting balance in account = $4,000

Rate of interest annually = 5%

Number of year = 1

Find:

Ending balance in account

Computation:

Compounded quarterly

So,

Number of interest period = 1 x 4 = 4

Rate of interest quarterly = 5% / 4 = 1.25% = 0.0125

So,

A = P[1+r]ⁿ

Ending balance in account = 4,000[1+0.0125]⁴

Ending balance in account = 4,000[1.0125]⁴

Ending balance in account = 4,000[1.05094]

Ending balance in account = 4203.76

Ending balance in account = $4,203.8 (Approx.)

Dextra Computing sells merchandise for $5,000 cash on September 30 (cost of merchandise is $3,000). Dextra collects 8% sales tax. Record the entry for the $5,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.
Record the cash sales and 8 % sales tax

Answers

Answer:

Date         General Journal                 Debit      Credit

Sep 30     Cash                                  $5,400

                       Sales                                            $5,000

                       Sales taxes payable                   $400 ($5,000 * 8%)

Sep 30    Cost of goods sold             $3,000

                        Merchandise inventory             $3,000

Oct. 15     Sales taxes payable           $400

                         Cash                                           $400

How do deductions affect the amount of a paycheck?

Answers

Deductions are amounts that are subtracted from an employee's gross pay (their total earnings before any deductions or taxes are taken out) to determine their net pay.

Several types of deductions may be taken out of a paycheck, including taxes, insurance premiums, and retirement plan contributions.

Additionally, some deductions, such as those for 401(k) contributions, are made on a pre-tax basis, which means that they are taken out of an employee's gross pay before taxes are calculated. Other deductions, such as taxes and insurance premiums, are taken out of an employee's gross pay after taxes have been calculated.

Employers must abide by the laws and regulations of the state and federal governments when it comes to deductions, and provide their employees with detailed information about the deductions taken out of their paychecks.

In summary, deductions are amounts that are subtracted from an employee's gross pay to determine their net pay and can include taxes, insurance premiums, and retirement plan contributions. Employers must take these deductions legally and should provide employees with detailed information about what deductions are being taken out of their paychecks.

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Exxon has the following capital structure: the firm issued 6 million shares of common stock with the stock price in c), the firm also issued 1.5 million shares of preferred stock with $4.5 preferred dividend per share, currently, Exxon has $25 millions in debts with interest rate as 6.5%. Suppose the current preferred stock price is $6 per share and the current common stock price is as in question (c), and the corporate tax rate is 25%. What is the (after-tax) weighted average cost of capital for Exxon

Answers

Answer: some data is missing but I was able to find it online and that helped me resolve the problem .

answer : WACC =  15.76%

Explanation:

Given that the common stock price = $9 ( as seen in option C not attached above )

value of common stock = $9 * 6 * 10^6 = $54,000,000

cost of common equity = 10.93%

current preferred stock price = $6

value of preferred stock = $6 * 1,500,000 = $9,000,000

hence the cost of the preferred equity = $4.5 / $6 = 0.75 = 75%

interest rate of debts = 6.5%

value of debit = $25,000,000

Corporate tax rate = 25%

∴ The cost of the debit after tax = 6.5% * ( 1 - 25)% = 4.88%

The Total value = value of common stock + value of preferred stock + value of debit

 = 54,000,000 + 9,000,000 + 25,000,00 = $88,000,000

Finally the weighted average cost of capital ( WACC )

[weight of debt * cost of debt after tax ] + [ weight of common equity * cost of common equity ] + [weight of preferred * cost of preferred ]

= [ (25/88) * 4.875 ] + [(54/88) * 10.933] + [ (9/88) * 75 ]

= 15.76%

2. What was the reasons/motives of each contributors/authors behind developing such management theory​

Answers

Explanation:

[tex]Cosθ[/tex]

Cos(θ)

Mountain Springs Water Company has two departments, Purifying and Bottling. The Bottling Department had 2,900 liters in beginning work in process inventory (30% complete). During the period, 59,110 liters were completed. The ending work in process was 5,180 liters (70% completed). All inventories are costed by the first-in, first-out method. What is the total equivalent units for direct materials (using the FIFO method) if materials were added at the beginning of the process?

Answers

Answer: 61,390 liters

Explanation:

If materials were added at the beginning, they will be 100% accounted for at the end of the process.

Equivalent Units = Units started and completed + Ending inventory

= Units completed - Beginning WIP + Ending inventory

= 59,110 - 2,900 + 5,180

= 61,390 liters

A bus company believes that its diesel fuel expenses might rise in the coming year and wants to create a hedge against the increase. The current price of diesel fuel is $3.50/gallon, and the company uses 10,000 gallons per month. The company purchased a futures contract for 10,000 gallons of diesel at $3.50/gallon to be delivered in six months. The price of the contract was $250.00. In six months, the spot price of diesel fuel is $3.85/gallon. The bus company accepted delivery of the contract commodity. What was the economic substance of the futures contract

Answers

Answer:

The contract produced savings of $3,250

Explanation:

Calculation to determine the economic substance of the futures contract

First step is to calculate the Increased in price of diesel fuel

Increase in diesel fuel price=$3.50/gallon to $3.85/gallon

Increase in diesel fuel price=.35/gallon

Second step is to calculate the amount saved by the firm

Amount saved=$0.35 × 10,000 gallons

Amount saved=$3,500

Now let determine the economic substance of the futures contract

Futures contract economic substance=$3,500 − $250

Futures contract economic substance=$3,250

Therefore the economic substance of the futures contract is $3,250

Graham Corp. has 1,000 cartons of oranges that were harvested at a cost of $26,500. The oranges can be sold as is for $30,000. The oranges can be processed further into orange juice at an additional cost of $12,500 and be sold at a price of $46,000. The net benefit (additional income) from processing the oranges into orange juice instead of selling as is would be: rev: 12_08_2020_QC_CS-243270 Multiple Choice $16,000. $(16,000). $(3,500). $3,500. $33,500.

Answers

Answer:

C. $3,500

Explanation:

The total cost of orange juice = $26,500 + $12,500

The total cost of orange juice = $39,000

So, the profit on the orange juice = $46,000 - $39,000 = $7,000

Profit when oranges are sold without juice = $30,000 - $26,500

Profit when oranges are sold without juice = $3,500

So, extra income = $7,000 - $3,500 = $3,500

Thus, the net benefit (additional income) from processing the oranges into orange juice instead of selling as is would be is $3,500

Select each of the phases in the project-management lifecycle.


project definition

project initiation

project closure

project monitoring

project execution

project planning

Answers

Answer:

PROJECT PLANNING IS YOUR ANSWER

HOPE IT HELPS

MARK AS BRAINLIEST

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