BUSINESS COLLEGE

A Nike women's-only store in California offers women's running, training, and sportswear products and also contains an in-store fitness studio for group and personal fitness training sessions. The store consistently earns profits in excess of $437,000 per year and is located on prime real estate in the center of town. The store owner pays $18,000 per month in rent for the building. A real estate agent approached the owner and informed her that she could add $7,700 per month to her firm's profits by renting out the portion of her store that she uses as a fitness studio. While the prospect of acquiring this rental income was enticing, the owner believed the use of that space as a fitness studio was an important contributor to her store's profits. What is the opportunity cost of continuing to operate the fitness studio within the store?

Answers

Answer 1
Answer:

Answer:

Opportunity Cost:

Opportunity cost can be denied as the benefit a person has received but giving up taking another course of action. In other words, it can be defined as the next best alternative.

Given that the Nike women's store earns a profit in excess of $437,000. The owner of the store pays $18,000 per month as rent. A real estate agent approached the owner and informed her that she could add $7,700 per month to her firm's profits by renting out the portion of her store that she uses as a fitness studio.

From the given question the opportunity cost of continuing to operate the fitness studio within the store is $7,700.

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Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 28,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 116,000. Units completed and transferred out: 144,000. Ending Inventory: 31,500 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $46,000. Costs in beginning Work in Process - Conversion: $51,850. Costs incurred in February - Direct Materials: $316,730. Costs incurred in February - Conversion: $602,150. Calculate the cost per equivalent unit of conversion.
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The overhead controllable variance is the difference between a. the actual overhead and the overhead applied to production.
b. actual overhead and budgeted overhead based on standard hours allowed.
c. budgeted overhead based on standard hours allowed and budgeted overhead based on actual hours worked.
d. budgeted overhead based on standard hours allowed and the overhead applied to production.

Answers

Answer: Between actual overhead and budgeted overhead based on standard hours allowed---- B

ExplanatioN:  The controllable variance is  defined as the difference between actual expenses or overhead incurred and the budget  overhead allowance based on standard hours allowed for work done. The variance is unfavorable controllable variance  If the actual  overhead is greater  than the budgeted overhead based on standard hours allowed for work done and is termed favorable controllable variance if the opposite occurs ie actual overhead being less than budgeted overhead based on standard hours allowed for work to be done.

Each of the following is a method by which to allocate joint costs except: Group of answer choices a. Chemical analysis. b. Relative sales value. c. Relative weight, volume, or linear measure. d. Relative marketing costs. g

Answers

Answer:

The correct answer is the option A: Chemical analysis.

Explanation:

To begin with, a chemical analysis consists in the study of chemical composition and structure of substances and it refers to the field of chemistryas its name indicates so therefore that it does not implicate the allocation of joint costs as all of the other methods. Moreover, this type of analysis is considered to be the principal basis technique by which every chemical information is obtanied and there are also two main brances in it, the qualitative and quantitative analysis.

How could job characteristics theory guide Andrea as she considers ways of combining areas for the staffers? Is there a way to give the new versions of their jobs a higher satisfaction potential than the pre-downsizing versions?

Answers

Answer:

Job characteristics theory could guide Andrea as she considers ways of combining areas for the staffers by developing a more challenging versatile job functions that will stimulate performance.

Explanation:

The Job Characteristics Model is a theory that is based on the idea that a task in itself is the key to the employee's motivation. In short, a boring and monotonous job is disastrous to an employee's motivation whereas a challenging, versatile job has a positive effect on motivation.

According to the tenets of job characteristics model, a more challenging and versatile job will give higher satisfaction potential than the pre-downsizing versions which could be counter productive and depressing.

you recently increased you're spending on marketing by 10%. you now spend 5500 per month. revenue increase by 1000 per month and you're gross margin percentage is 70%. All other expenses stayed consant. Did the increase pay off?

Answers

Answer:

Answer is yes

Explanation:

You consider buying a share of stock. The stock is expected to pay a dividend of $1.50 next year, and dividends are expected to grow by 5% per year forever. What is the stock price now if the stock's beta is 1.1, rf is 6%, and E[rm]

Answers

Question

The question is incomplete. The complete question is given as follows:

You consider buying a share of stock. The stock is expected to pay a dividend of $1.50 next year, and dividends are expected to grow by 5% per year forever. What is the stock price now if the stock's beta is 1.1, rf is 6%, and E[rm] = 16%.

Answer

 Stock price  =  $12.5

Explanation:

Using the dividend valuation model, the value of a stock can be determined using this model:

Price = D(1+g)/(r-g)

D- dividend payable now, g- growth rate in dividend, r-return on equity

Return on equity

Re= Rf + β(Rm -Rf)

Rf- risk-free rate, Rm - Return on market portfolio, β- Beta factor

To determine the Stock price we follow the steps below

Step 1

Determine the cost of equity

r = 6% + 1.1 *(16%-6%)

  = 17%

Step 2

Determine the stock price

Stock price = 1.50/(0.17-0.05)

                  =  $12.5

Stock price = $12.5

Note

D*(1+g) = Dividend next year. And this has been given as $1.50. So there is no need to apply the growth rate.

Suppose your boss has asked you to analyze two mutually exclusive projects - Project A and Project B. Both projects require the same investment amount, and the sum of cash inflows of Project A is larger than the sum of cash inflows of Project B. A coworker told you that you do not need to do an NPV analysis of the projects because you already know that Project A will have a larger NPV than Project B. Do you agree with your coworker's statement?a. Yes, Project A will always have the largest NPV, because its cash inflows are greater than Project B's cash inflows.


b. No, the NPV calculation will take into account not only the project's cash inflows but also the timing of cash inflows and outflows. Consequently, Project B could have a larger NPV than Project A, even though Project A has larger cash inflows.


c. No, the NPV calculation is based on percentage returns. So, the size of the project's cash flows does not affect a project's NPV.

Answers

Answer:

b. No, the NPV calculation will take into account not only the project's cash inflows but also the timing of cash inflows and outflows. Consequently, Project B could have a larger NPV than Project A, even though Project A has larger cash inflows.

Explanation:

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

An example:

Suppose there are two projects with a cash outlay of $500.

The cash flow for project A :

Cash flow from year 1 to 3 =$0

Cash flow from year 4 to 7 =$ 500

WACC = 10%

Using a financial calculator, the NPV =$690.78

The cash flow for project B

Cash flow for year one and two =$300

Cash flow for year three = $100

Cash flow for year four and five =$500

WACC = 10%

using a financial calculator, the NPV = $747.76

From this example, even though the cash flow from project A is higher than the cash flow from project B, project B's NPV is higher.

I hope my answer helps you.
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