She knows the global market offers many opportunities. What is the principal outstanding after the first loan payment? WebStudy with Quizlet and memorize flashcards containing terms like Shen is a 22-year-old professional tennis player. What is the normal balance of the following accounts: A) Organizational strengths may not lead to competitive advantage B) SWOT's focus on the external environment is too broad and integrative C) SWOT gives a one-shot view of a The ________ basis of accounting records revenues ONLY when cash is received. ) Assuming that we can earn a 13.5% return on accounts receivable, which of the following actions to finance an increase in our accounts receivable balance would be optimal? Ratio analysis is an important component of evaluating company performance. WebWhen analyzing a company's current ratio: A) the current ratio measures the company's ability to pay all liabilities (current and long-term) with current assets. The Federal Reserve's primary tool for changing the money supply is_____ . Tinbergen Cans expects sales next year to be $30,000,000. Assuming level production, what is their average inventory? Myrdal Boots can borrow from its bank at 12 percent to take a cash discount. A doctor performed surgery in March and did not receive cash from the patient until July. A) A banks assets are its sources of funds. Which of the following asset classes is generally considered to be the least liquid? Which of the following best represent the major factors Dun & Bradstreet would examine? If he can put aside $10,000 at the end of each year, what rate of return must he earn in order to have the amount needed? Average daily remittances are $5 million, and "extended disbursement float" adds 3 days to the disbursement schedule, how much should the firm be willing to pay for a cash management system if the firm earns 10% on excess funds. If a company's current liabilities are increasing faster than its current assets, the company's liquidity position is weakening. Classify each of the variables listed by the policy's short run effect upon them. _______advantage is a monopoly that exists when a country is the only source of an item, the only producer of an item, or the most efficient producer of an item while_______advantage is the basis of most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items. At the end of the year, an adjusting entry is made to debit Advertising Expense for $60. Friedman Roses, Inc. needs $80,000 in funds for expansion. Their tax bracket is 40%. Ciba Specialty Chemicals' process that decreases production costs while reducing damage to the environment allows it to charge higher price on its patented dye product. WebStudy with Quizlet and memorize flashcards containing terms like Bank A was offering simple interest at 4.75 % per year, which was clearly a better deal than the 4.75 % compound interest rate at Bank B. Of the $200,000 on account, $63,000 was collected in cash in 2018 and the rest in 2019. A) Savings accounts. If we assume that inventory is used up at a constant rate and safety stock is zero, the average inventory will be 1/2 the order size. Its low barriers to entry expose Northern to increased risk of competition, which could negatively affect the predictability of its expected future sales revenues. After these transactions were recorded, Butter's current ratio was: (Round your final answer to two decimal places. Fundamentals of Financial Management, Concise Edition, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. One possible explanation for an increase in a firm's profitability ratios over a certain time span is that the company's income has increased. Long-term financing is usually less expensive than short-term financing because it is not as advantageous to the corporation as short-term financing. \text{Coefficients}\\ Leontief's should borrow from the bank to take the discount. WebStudy with Quizlet and memorize flashcards containing terms like Which of the following statements are true? This practice is called. Increased use of long-term financing is generally a more conservative approach to current asset financing. By using long-term capital to cover short-term needs, the firm is virtually assured of becoming technically insolvent. Which of the following combinations of asset structures and financing patterns is likely to create the least volatile earnings? The problem facing the US financial system in the late 1980s and early 1990's had which of the following characteristics? Level production allows a company to reduce inventory and maximize efficiency as compared to seasonal production. & ? a. Even though a firm factors its receivables to a finance company, it is still liable if the account becomes uncollectible. A) 45 percent; 55 percent B) 55 percent; 4 percent C) 25 percent; 50 percent. WebCompulsive Shopping: An unhealthy obsession with shopping that materially interferes with the daily life of the afflicted. WebThe S&P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Mike Carlson will receive $10,000 a year from the end of the third year to the end of the 12th year (10 payments). During the current year, Butters issued common stock for $5,000 for cash and purchased $3,400 of inventory on account. A $6,000 sale on account was made. Firms with predictable cash-flow patterns should assume relatively low levels of risk. He is a plumber and earns $50 per hour. Socially conscious investors insist that a company extend its own high standards to its______, Corporate social initiatives are an enhanced form of corporate philanthropy dealing directly with a company's core _______, A product's carbon _______ is one possible, although sometimes controversial, measure of the products impact on the environment. WebStudy with Quizlet and memorize flashcards containing terms like For most people, the first obstacle is to correctly assess their true net income. & \textbf{Monthly} & \textbf{Monthly} & & \textbf{Commission} & & \textbf{Monthly} & \textbf{Gross}\\ If the US Treasury engages in a foreign exchange intervention to lower the value of the dollar relative to the euro by having the Federal Reserve sell dollars and buy euros in the foreign market, how will this affect the monetary base? D. lowers costs and increases differentiation. Fish wants to build a house in 10 years. \textbf{Salesperson} & \textbf{Salary} & \textbf{Sales} & \times & \textbf{Rate} & = & \textbf{Commission} & \textbf{Pay}\\ \hline | | **Beginning inventory** | **Ending inventory** | In times of tight credit in the United States, Eurodollar loans become difficult to obtain. The ending balance in the Prepaid Advertising account will be: On December 1, 2019, Carrie's Day Care receives $4,200 in advance for an agreement to care for Susan's children for the months of December, January, and February. How do "tight money" and "easy money" impact the economy? -An increase in the overall level of prices is called, 100 * (Price -Year one price) / Year one price, - _____ variables are measured in monetary units, (Price * Quantity of output) / quantity of money, (quantity of money * velocity) / quantity of output, -The impact of the government's decision to raise revenue by printing money on the value of money is known as the _____, -Nominal interest rate - expected inflation rate. The purchasing manager's behavior should be expected to increase Western's riskiness by increasing its exposure to potential supply shortages or mistimed deliveries. B) borrowing short and lending long. In the long run, the increase in money growth will change which of the following? -Different firms may use different accounting. Using the appropriate output for each case study, do the following parts, and, if you have studied the optional $F$ test, also do the other given parts. Which of the following yield curves would be characteristic during a period of high economic growth? A hardware store has budgeted sales of $\$ 36,000$ for its power tool department in July. Check all that apply. Which of the following is not a valid quantitative measure for accounts receivable collection policies? WebStudy with Quizlet and memorize flashcards containing terms like A firm's annual stockholders' report _____. She spends $5$ hours per day studying. Analysts and investors often use return on equity (ROE) to compare profitability of a company with other firms in the industry. The_____ protects whistleblowers by requiring all public corporations to allow employee concerns about accounting and auditing to be submitted confidentially and anonymously. WebAn increase in the current ratio over time always means that the company's liquidity position is improving. The amount of assets per dollar of equity capital is called the A) asset ratio. As the price level rises, the cost of borrowing money will _____ , causing the quantity of output demanded to _____. Compensating balances are important for banks because their existence allows them to make loans at lower quoted rates. | Raw materials purchases (on credit) | $200,000 | Which of the following statements most accurately describes the task of bank asset management? (b) What happened to the Palestinians after the state of Israel was created? After spending a few weeks out of work and interviewing for several other positions, she gave up on her job search and decided to go back to grad school. 1. \text{PriceDif} & 0.10 & 8.08061 & 0.0647970 & (7.94788, 8.21334) & (7.41872, 8.74250) When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but makes loans instead, then, in the banks final balance sheet. WebStudy with Quizlet and memorize flashcards containing terms like One of the advantages of a nonprofit organization compared with an investor-owned company is that the investor-owned company is subject to federal income taxes., The earnings of a standard ("C") corporation can be subject to double taxation, Governmental health care organizations If Gerry makes a deposit of $1,500 at the end of each quarter for 5 years, how much will he have at the end of the 5 years assuming a 12% annual return and quarterly compounding? The short-run quantity of output supplied by firms will fall below the natural level of output when the actual price level _____ the price level that people expected. If no adjusting entry was made on December 31 of the current year: ) On August 1, 2018, Brian Quinn received $8,400 for legal services to be performed evenly throughout the next twelve months, beginning August 1, 2018. When he's not competing, he works as a coach at a local tennis club. When the Federal Reserve uses open-market operations to sell government bonds, the quantity of reserves in the banking system _____ , banks' need to borrow from each other _____ , and the federal funds rate _____ . Koopman's Chickens, Inc. plans to borrow $300,000 from its bank for one year. An adjusted trial balance prepared on December 31, 2019, includes which of the following? ) Many. A company purchased supplies during the year totaling $21,000. Banks asset portfolios include state and local government securities because A) their interest payments are tax deductible for federal income taxes. and more. In addition to goods and services, countries also _________ art, cultural events, medical advances, space exploration and labor, Which of the following are U.S. jobs that are being disrupted by the "Second wave" of offshore outsourcing, Which of the following countries are members of the Central American Free Trade Agreement CAFTA, Which of the following countries are under U.S. embargo. Sometimes, due to a nation's unreliable currency, the only way to trade is ___________ which is defined as the exchange of merchandise for merchandise or service for service with no money traded. The adjusting entry to record the accrued wages on December 31 will include a: Deere Company holds a $14,400 note receivable dated July 1, 2019, with 10% interest. A business can legally compete in global markets by using which of the following strategies? Discounting refers to the growth process that turns $1 today into a greater value several periods in the future. Checks can be cleared only through the Federal Reserve System. John Maynard Keynes argued that there were three reasons that people demand money. In the early days of the Fed, the discount rate, the rate at which the regional Federal Reserve banks would lend to commercial banks, was determined by the. When a potential customer has a mediocre credit history, a firm should not consider allowing them to become a customer. g. Maintenance Management Company performed cleaning services for Malcom Motors during Malcom Motors: Certificates of deposits purchased in small denominations of $1,000 at the savings and loan are readily marketable. Total Asset Turnover RatioTotal Asset Turnover Ratio = = Sales / Total AssetsSales / Total Assets6.00 times6.00 times = = $40 million / Total Assets$40 million / Total AssetsTotal AssetsTotal Assets = = $40 million / 6.00 times$40 million / 6.00 times = = $6.67million. Compensating balances are a way for banks to recover the cost of corporate services provided, but not directly charged. Every message routed through SWIFT is encrypted and every money transaction is authorized by another code for security purposes. The president of which district bank is a permanent member of the Federal Open Market Committee? Required The ratio is often viewed as a measure of the buffer against out-of-stock inventory. It is possible for companies to operate with negative cash balances on their books. The "SWIFT" transfer system was developed to aid regional bank fund transfers within the United States. Kenneth's Arrows and Bows borrow $10,000 for one year at 12 percent interest. This indicates: Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David C. Marshall, Wayne W McManus. Which of the following bank assets is the most liquid? Conditions that likely contributed to a credit crunch in 1990-92 include: A) a decrease in the equity multiplier caused by loan losses due to falling real estate prices. A firm that wishes to minimize risk when investing idle cash would be least likely to buy, In comparison to securities issued by the U.S. Treasury, securities issued by U.S. government agencies like the Federal Land Bank, Treasury Inflation Protected Securities (TIPS). Return on investment is the major decision criteria in credit decisions. -Arises from a mismatch between the jobs available in some labor markets and the skills of workers. What will be the ending balance in the Accumulated DepreciationMedical Equipment at December 31, 2020? ) Written ethics codes can be categorized as: Facing a decision to either act unethically at the request of a supervisor or be fired for not acting as directed is referred to as an: A company's effectiveness and financial performance are most affected by responsible _____ _____ management. What is the level of required reserves for this economy? What is the level of excess reserves for this economy? The following information is available regarding its June inventories. WebStudy with Quizlet and memorize flashcards containing terms like Which of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis? Plot the residuals versus labor and equipment. Computerized cash management and electronic funds transfer allow firms to carry smaller cash balances. | Indirect | 42,000 | One of the biggest challenges the Federal Reserve faces in conducting monetary policy is the existence of __________ lags. 1) banning child labor when the child's salary is needed to support the family. . The cars will be delivered to b. It is difficult to acquire a loan in US dollars outside the United States. If you were to put $1,000 in the bank at 6% interest each year for the next ten years, which table would you use to find the ending balance in your account? The 5 C's of credit include character, capital, capacity, conditions, and collateral. Ahmed Company purchases all merchandise on credit. When selecting marketable securities, the company should always select securities with longer maturities if they offer higher yields. WebDIY Seo Software From Locustware Is Exactly What You Need! The entity responsible for making the monetary policy decisions in the European Central Bank is the, The Federal Reserve was created largely in response to the, When the Federal Reserve was created in 1913, its two primary purposes were to, The chair of the Federal Reserve becomes the chair by being. Even small companies participate in _______ through donations and volunteer support of local causes and national charities, such as the Red Cross and the United Way, The mortgage bankers and real estate companies who helped create the financial crisis of 2008 were driven by. When the Federal Reserve makes a loan at the discount window to a bank, it will __________ the monetary base by __________ bank reserves. The policy will cause the natural rate of unemployment to _____ , which will: Direction of long run aggregate supply curve, Natural level of output+ a * (actual price level- expected price level). d. Use multiple regression transformed variables to estimate a Cobb-Douglas production function with constant returns to scale. This phenomenon is known as the _____ effect. As a result, people become more likely to accept _____ money in exchange for goods and services. Under what conditions must a distinction be made between money to be received today and money to be received in the future? The temporary unemployment resulting from such sectoral shifts in the economy is best described as _____ unemployment. When he's not competing, he works as a coach at a local tennis club., Valerie is a 42-year-old autoworker who was just laid off by her employer. An adjusted trial balance prepared on December 31 would include a balance in the Prepaid Insurance account of: ) Doorglam paid $35,000 for office furniture. The London Interbank Offered Rate (LIBOR), General Rent-All's officers arrange a $50,000 loan. Inventory and accounts receivable will have to be increased by $300,000 to accommodate this sales level. A compensating balance will be lower in periods of tight money than in periods of credit ease. When choosing a(n)________ for reaching global markets, it is important to analyze the amount of commitment, risk, and profit potential. 1) to mediate trade disputes among nations. 3 out of 4 citizens do not give any time to the communities in which they live. The vehicle is delivered to the dealer and customer on April 1, 2019. What should $h$ be for the fox population to remain the same from year to year? What is the optimum order size? The collection cost on these accounts is 3.5% of new sales, the cost of producing and selling is 80% of sales and the firm is in the 31% tax bracket. It takes 30 days on average to receive payment from the clients. Cash management becomes more important as the level of short-term interest rates rise. Complete the problem. Which of the following statements help to explain why, in the real world, the Fed cannot precisely control the money supply? Compounding refers to the growth process that turns $1 today into a greater value several periods in the future. During a credit crunch, the excess reserve ratio will, If Claire were to sell a US Treasury security to the Federal Reserve in the secondary market, receiving a check from the Fed as payment, and then cash the check at her bank and hold onto the cash, then, Suppose the current real federal funds rate in the economy is 1.5%, the current inflation rate is 3.0%, the Federal Reserve's target inflation rate is 2.0%, and the output gap is 1.0%. Identify which of the following statements are true about profitability ratios. During the year the company purchased additional supplies costing $1,300. \text{PriceDif} & 2.665 & 0.258 & 10.31 & 0.000 & 1.00\\ An adjusted trial balance prepared on December 31, 2018 will show a credit balance in Unearned Revenue in the amount of: ) A company started the year with $200 of supplies. The effective rate on an $10,000 installment loan with bi-monthly payments, $1,600 in interest, for 2 years is: All of the following are evident during a credit crunch except: All of the following are benefits of commercial paper to the corporation except: The reasons why a company may choose to pledge accounts receivable are all of the following except: In the management of cash and marketable securities, the primary concern is profitability. What is net income in 2018 under accrual accounting? Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor? WebOverall, in order to adjust to the new low oil price environment, the SFL envisaged a reduction in current and capital spending by 5.7 percent (representing 2.2 percent of 2019 GDP) compared to the initial 2020 budget law. Which of the following combinations of asset structures and financing patterns is likely to create the most volatile earnings? Holding large amounts of bank capital helps prevent bank failures because A) it means that the bank has a higher income. $$ Which of the following are functions of exports assistance centers (EACs). CCU during August 2019. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities? Which of the following statements is FALSE? It as written $1,400 in checks to its suppliers. Home-based franchise have many advantages such as: A company similar to an S corporation but without the special eligibility requirements is an: One of the fastest growing franchise sector is_______. Ms. Smith borrowed $1,250 at an 11% stated rate of interest and was to pay back the loan in 24 monthly payments. A Just-In-Time (JIT) inventory management program has all but which of the following requirements? _____________ are insiders who report illegal or unethical behavior, The _____ _____ is a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs. What is the expected value of returns? -Establishing government-run employment agencies to connect unemployed workers to job vacancies. |-----------------------------------------------|:----------:| $$. Price Corp. is considering selling to a group of new customers and creating new annual sales of $70,000. Monetary policy has the best chance of influencing the level of __________ unemployment. Assuming level production throughout the year, and assuming receivables are collected in two equal installments over the two months subsequent to the sales period, developing the cash budget requires the following steps: When actual sales are greater than forecasted sales, Normally, permanent current assets should be financed by. Corporate _____ is the dimension of social responsibility that refers to a position a firm takes or statement it makes on social and political issues. Bank deregulation has eased competition between commercial banks, savings and loans, brokerage houses, and new financial services companies. Rod Zoot owns and operates Steuben Advertising Services. Bankers' acceptances are short-term securities that arise from foreign trade. When price is above equilibrium there are, Where a good can be bought in one country at a low price and sold in another at a higher price. Short-term financing is risky because of the possibility of rising short-term rates and the inability of always being able to refund short-term debt. \text{Total} & 29 & 13.459\\ Liquidating current assets are really fixed assets since they have lives greater than one year. WebStudy with Quizlet and memorize flashcards containing terms like The responsibilities of the European Central Bank include a. monetary policy, foreign exchange operations, and maintenance of the payments system. WebStudy with Quizlet and memorize flashcards containing terms like Which of the following is a valid interpretation of Say's Law?, Please sort the following items as an example of either physical capital change or a technological change. -Rajiv recently lost his job as a dishwasher. The objective, "avoid criminal misconduct" describes which type of ethical code? \begin{array}{|l|c|c c c c c|c|} \hline Use a .02 level of significance. Which of the following statements is false? \text{Vern Yoder} & \$3,140 & \$31,000 &\times & 9.25\% & = & ? c. the supply curve is inelastic. Compute the comprehensive income for Chewco Co. for the year ended December 31, 2014. Large-denomination CDs are ________, so that like a bond they can be resold in a ________ market before they mature. A lock-box is used by the selling corporation to speed up the check collection and check-clearing process. After three years of use, the accumulated depreciation of the furniture will be: ) A company has $800 in Prepaid Advertising before any adjustments. Riley Co. is considering a short-term or long-term financing plan for $6,000,000 in assets. c. liquidity risk. WebStudy with Quizlet and memorize flashcards containing terms like Financial statement ratios support informed judgments and decision making most effectively: A. when viewed for a single year. The company incurred expenses of $145,000 on account in 2018 and made cash payments of $100,000 towards the expenses in 2018. **Required:** The key to current asset planning is the ability of management to forecast sales accurately and then match production schedules with the sales forecast. Under accrual accounting, the doctor recognizes revenue: A doctor performed surgery in April and did not receive cash payment from the patient until August. Bank capital is listed on the ________ side of the banks balance sheet because it represents a ________ of funds. During the Great Recession, the price level in the United States, When the required reserve ratio decreases, the impact of changes in the monetary base on the money supply is, Consider the following data about the economy: currency outstanding (C) = $2 trillion, total deposits (D) = $1 trillion, total reserves (R) = $60 billion, and the required reserve ratio (RR ratio) = 5%. \text{Model Summary}\\ Supply chain management has little impact on financial performance and is primarily a marketing and management concept. 100 * (# of unemployed / # in labor force), Factors that influence international trade, -An increasing number of affordable international flights. One advantage of level production is that, Publishing companies are characterized by, If a firm uses level production with seasonal sales, Retail companies like Target and The Limited exhibit sales patterns that are mostly influenced by, Retail companies like Target and Limited Brands are more likely to have. B. increases costs and decreases differentiation. According to the joint new standard for revenue recognition, issued by FASB and IASB, which item below is NOT necessary? ) a. Analyzing b. This is an example of a(n): ) The adjusted trial balance is used to prepare: ) An accountant failed to record the adjusting entry for accrued revenues. A company's current ratio is decreasing every year and currently stands at 1.00. Normally, the merchandise sells for $260. His loan cost was 11% and he promised to repay the loan in 15 equal annual payments. Which of the following is true about the leveraging effect? Check all that apply. Larger firms tend to be net users of trade credit. What is Rosewood's debt ratio? What law prohibits "questionable" or "dubious" payments to foreign officials to secure business contracts? In the absence of regulation, banks would probably hold A) too much capital, reducing the efficiency of the payments system. On August 1 of the current year, Trevor Beck received $7,800 for legal services to be performed evenly throughout the next six months. At historically low interest rate levels, compensating balances increase. According to your understanding, a company with one key product is considered to be ____ risky than companies with a wide range of products. A sole proprietorship has a limited life span unless: When farmers join together to get better prices for their food products, they form a farm_____, A________ partnership has partners who do not share in operating the business. Its average daily sales are $3,000, and it collects accounts in 25 days. If borrowers with the most risky investment projects seek bank loans in higher proportion to those borrowers with the safest investment projects, banks are said to face the problem of, Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the. Banks that suffered significant losses in the 1980s made the mistake of A) holding too many liquid assets. e. Compare the three production functions using residual plots and a standard error of the estimate that is expressed in the same scale. In an adjusting entry, the debit to the Unearned Revenue account represents the: The adjusting entry to record the accrual of income tax expense includes a: When using a worksheet to prepare the adjusted trial balance: On December 1 of the current year, Prepaid Rent was debited $10,200 for three months of rent, to cover the period December 1 to February 28. & \textbf{Minimum} & \textbf{Total} & & & & \\ Note that a negative position implies receivables exceed payables. The Westin Company has an annual gross income of $82,125. An increase in the supply of a good will decrease the total revenue producers receive if a. the demand curve is inelastic. The adjusting entry on December 31 of the current year would include a: On October 1 of the current year, a company received $9,600 for services to be performed evenly over the next six months. A trade discount is a percentage reduction from the invoice price given for purchasing certain minimum quantities. An inverted yield curve would suggest that, When the term structure of interest rates is downward sloping and interest rates are expected to decline, the. ________ will be increased when a company receives cash before performing the services. ) Suppose the government passes a law that significantly increases the minimum wage. According to the expectations hypothesis, when long-term interest rates are higher than short-term interest rates, long-term rates are expected to decline. Given the following information, how much should the annual loan payments be? . A $5 million deposit outflow from a bank has the immediate effect of A) reducing deposits and reserves by $5 million. | August 31 | 195,000 | 330,000 |. Corporations issue _____ to shareholders and this allows ownership to change when it is sold. The use of private company information by employee for personal financial gain is called _____ _____. Under cash-basis accounting, the doctor recognizes revenue: ) Under accrual accounting, revenue is recorded: Which of the following transactions would be recorded under accrual accounting but NOT under cash-basis accounting? ) Which company would be considered a financially leveraged firm? The sale of asset-backed securities can sometimes enable the issuing firm to acquire lower-cost funds than it normally would receive from a bank loan or bond offering. -If a company has a profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales. \end{array} Babe Ruth Jr. has agreed to play for the Cleveland Indians for $3 million per year for the next 10 years. The United States is charged with setting the standard for ethics and social responsibility for which one of the following reasons? When borrowers are hesitant to borrow to finance purchases because of pessimism about the future and banks are hesitant to lend because of a fear that borrowers will default on their loans, the economy is said to be experiencing a(n) __________ trap. WebStudy with Quizlet and memorize flashcards containing terms like 1. The weekly rate of pay for a five-day workweek is $500. The faster a firm's growth in sales, the more likely it is that an increasing percentage of financing will be internally generated. Henry Company mailed the check on July 27 to the landlord. Consider the following data about the economy: currency outstanding (C) = $1 trillion, total deposits (D) = $750 billion, total reserves (R) = $76 billion, and the required reserve ratio (RR ratio) = 10%. Permanent current assets are not similar to fixed assets because they are fully liquidated within the year. What concept is illustrated by Event b? Project Y, with 40% ROE and a small investment, generating low expected cash flows. If a company would like to reduce their average collection period, they can either reduce offer a cash discount or increase their net terms. The extent to which inventory financing may be used depends on. The company determined that the yearly depreciation expense is $13,000. At the end of the year, they made an adjusting entry to record $16,000 of supplies that had been used during the year. In the current year, a shock has lowered the inflation rate to 1.0%. After reviewing the initial design proposal, he is concerned about the proposed mix of capital and labor. Monetization of public debt can lead to a rapid increase in the money supply and hence to. _______ ________ _______ is a business's concern for the welfare of society. Unfortunately, float is too complicated to be effectively managed through any combination of disbursement and collection strategies. Using the company's last three years of financial reports, you've calculated its financial ratios, including the When preparing the balance sheet, the final balancing element of the balance sheet is: ________ will not be found on the statement of retained earnings. What is the money multiplier for this economy? **Figure $13.14$ Minitab Output of a Simple Linear Regression Analysis of the Fresh Detergent Demand Data** The annual percentage rate (APR) is a measure of the effective rate of interest on a loan on an annualized basis. the company during the entire month of January. A) A banks assets are its uses of funds. $$ ROE is considered a very important measure, and managers strive to make the company's ROE numbers look good. Hicks Health Clubs, Inc., expects to generate an annual EBIT of $500,000 and needs to obtain financing for $1,000,000 of assets. Which of the following groups are better off as a result of the union action in the northern state? Suppose the government wants to reduce frictional unemployment. The required compensating balance is usually computed as a. Holland Construction Co. has an outstanding 180-day bank loan of $400,000 at an annual interest rate of 9.5%. After this transaction, the company's current ratio will be: (Round your final answer to two decimal places. -Higher wages attract a more competent pool of workers. Under normal conditions (70% probability), Plan A will produce $40,000 higher return than Plan B. Among the advantages of farm cooperatives for their members is that they: Taryn and Eilysh have decided to form a partnership. WebStudy with Quizlet and memorize flashcards containing terms like Which of the following are functions of exports assistance centers (EACs), Darla's bicycle ship in the United States is experiencing a slowdown in its growth. There were $600 of supplies on hand at the end of the year. Web$200/$2,500 = .08 (savings ratio) When preparing her monthly budget, Marge Kent has a total spending allowance of $4,600. This would increase the reserves account and _____ the_____ account. Is there a free initial consultation. The book value of a plant asset is the: When an adjustment is made for prepaid rent: ) Which account is credited in the adjusting entry to allocate the cost of equipment? How would you expect this situation to affect the assessment of Northern's financial condition and performance? Following the expense recognition principle, to recognize expenses along with the related revenues, means to: ) On June 1, 2019, Starbucks paid the rent of $66,000 for 40 of its stores in Washington and California. Many sellers businesses elect to form a corporation because of the two main advantages of ______ liability and possible tax advantages. \text{Regression Equation}\\ 9) When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank, then, When a $10 check written on the First National Bank of Chicago is deposited in an account at Citibank, then, When you deposit $50 in your account at First National Bank and a $100 check you have written on this account is cashed at Chemical Bank, then. What types of claims do the attorneys make about bankruptcy? The goals of bank asset management include A) maximizing risk. U.S. laws against_______ are specific. Which of the following is NOT a correct statement about adjusting entries? ) The shift of jobs from developed economies to low-wage global markets, called ______ outsourcing, has become a major issue. If Allison has saved $1,000,000 upon retirement, how much can she live on each year if she can earn 5% per year and will end with $0 when she expects to die 25 years after retirement? \text{ PriceDif} & 1 & 10.653 & 10.6527 & 106.30 & 0.000\\ When you deposit a $50 bill in the Security Pacific National Bank, A) its liabilities decrease by $50. For this sale, the business should record revenue of: Which of the following is a TRUE statement regarding expenses? ) The data file Metals contains 27 observations of the value-added output, labor input, and gross value of plant and equipment per factory. a. If Analog computers can borrow at 9.5% for 3 years, what is the effective rate of interest on a $800,000 loan where a 15% compensating balance is required? Assume there is no increase in liabilities other than that which will occur with the external financing. Waldron Inc. is considering selling to a group of new customers that will bring in sales of $15,000 with a return on sales of 5%. How will this affect the monetary base? ________ _________leads to less imported goods and services; its reasoning rest with the hope that domestic producers are given a better opportunity to survive and grow, which eventually leads to more local jobs. This could be achieved by making sure that, One of the concerns about the Federal Reserve targeting high employment is that it might, In the Taylor Rule formulation for setting a federal funds target rate, a negative output gap means that the, Prior to the 1980s, the Federal Reserve could use targets for M1 and M2 to conduct monetary policy because, One thing on which both the political right and the political left in the United States agree regarding the Federal Reserve is that its, Joe has a $1,000 debt. An adjusted trial balance, prepared at the end of the accounting period, will show the following balance in Supplies Expense: A company purchased medical equipment for $130,000 on January 1, 2018. Damon goes to the ATM machine and withdraws $500 in cash. |---------------------------|:-----------------------:|:--------------------:| \text{Error} & 28 & 2.806 & 0.1002\\ Assume the company would not normally maintain this average amount. a state-chartered legal entity with authority to act and have liability separate from its owner is a: When you own a sole proprietorship you and the business are considered one, so you have ______ liability for financial obligations such as debt. The present value today of this deferred annuity is: The shorter the length of time between a present value and its corresponding future value, A dollar today is worth more than a dollar to be received in the future because, Increasing the number of periods will increase all of the following except. Bank reserves include A) deposits at the Fed and short-term treasury securities. Which of the following techniques allows explicit consideration of more than one possible outcome? Use of long-term financing and the carrying of highly liquid assets is a high-risk combination. A) selling loans; selling securities. Which of the following are considered to be positive effects of NAFTA? If the Federal Reserve increases the monetary base by $1 billion, the money supply will increase by. The Jedi investment was classified as an available-for-sale security. The net income or loss is calculated on which financial statement? ) \text{Regression} & 1 & 10.653 & 10.6527 & 106.30 & 0.000\\ The manufacturer of a small utility trailer is interested in comparing the amount of fuel used in towing the trailer with that required to overcome the weight and wind resistance of a rooftop carrier. Note any unusual patterns. Heavy use of long-term financing generally leads to lower financing costs. The rate of interest is 10 percent, but a compensating balance of 15 percent is required. Sales, receivables, and inventory form the basis of cash flow. Web1. Pellegrini Southern Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than Jing Foodstuffs Corporation. How much Advertising Expense will be reported on an income statement prepared for the year ended December 31, 2018? ) A partner expects to be rewarded for putting time and money into a firm through: The_______ form of business assists people in becoming owners without having to work at the firm, Selling shares of stock to anyone allows a______ to raise more money to grow. Draw Maria's production possibilities frontier for reading economics and sociology. They are the, If GDP is $16 trillion and the money supply is $4 trillion, then the velocity of money is, The Federal Reserve notices an increase in the public's desire to hold cash and fears that it may cause an increase in interest rates. Using T-accounts show what happens to reserves at Security National Bank if one individual deposits $1000 in cash into her checking account and another individual withdraws $750 in cash from her checking account. When a company wants to enter the global market without incurring heavy start-up costs, creating a successful brand and penetrating a new market with low risk, they are engaging in: The United States is the largest ______ nation in the world. The amount of annual payments necessary to accumulate a desired total can be found by reference to the present value of an annuity table. Which of the following are common markets? A) call in loans. -If the minimum wage is set at $10.50, the market will not reach equilibrium. Minority-owned businesses are growing at more than _____ times the national rate, a chartered legal entity with authority to act apart from its owners, Select those items considered fringe benefits that people working for a company are likely to receive but a sole proprietor has to develop on his own, Rank the order in which members of a corporation are chosen in order to separate ownership from management. One of the big benefits of implementing supply chain management, is a reduction in inventory on hand. Check all that apply. A) Checkable deposits are usually the lowest cost source of bank funds. Waldron has a turnover ratio of 5 to 1 between sales and accounts receivable. A weak transportation infrastructure results in a(n)_____ barrier to global business. The demand for labor among steel-producing firms in Pennsylvania will _____ . The successful financial manager is very interested in the term structure of interest rates but is not concerned with the relative volatility or historical level of interest rates. Which of the following is not a condition under which a prudent manager would accept some risk in financing? What is the effective rate of interest if the loan is discounted? When a new depositor opens a checking account at the First National Bank, the banks assets ________ and its liabilities ________. Assume the balance in the Retained Earnings account at January 1, 2019 is zero, and no dividends are declared in 2019. Which statements are accurate as related to corporate taxation? The Trial Balance Worksheet does NOT have columns for: ) If a Trial Balance Worksheet is prepared, which columns are used to prepare the financial statements? ) C) a current ratio of less than 1.00 means that current liabilities exceed current assets. Note that this production function has the same form as the function estimated in part $\mathrm{c}$, but it has the additional restriction that $\beta_1+\beta_2=1$. The APR is generally lower than the stated rate by the bank. The federal funds rate is the interest rate that banks charge one another for short-term (typically overnight) loans. No more guesswork - Rank On Demand Your annual withdrawal will be: John Doeber borrowed $125,000 to buy a house. Cash payments on accounts payable during each month are expected to be May, $1,600,000; June,$1,490,000; July, $1,425,000; and August,$1,495,000. Warren Enterprises expects 12,500 unit sales, has ordering costs of $9 per order, carrying costs of $.50 per unit and desires to keep 100 units in safety stock. The largest percentage of banks holdings of securities consist of A) Treasury and government agency securities. b. As the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to _____ in foreign exchange markets. The two basic costs associated with inventory are production cost and ordering cost. During the current year, Kincaid earned $3,100 in revenues and incurred $4,300 in expenses. d. Malcom Motors owns the building it occupies; the company occupied the building during On December 31, 2014, the fair value of Jedi Inc. was$124 per share. Then, Kuznets projects paying 10 percent interest in the second year. Use the available information to compute the budgeted amounts of (1) merchandise purchases for June, July, and August and (2) cost of goods sold for June, July, and August. "Extended disbursement float" has to do with the length of time a corporation takes to collect bills. ratios examine the market value of a company's share price, its profits and cash dividends, and the book value of the firm's assets and relate them to other data items to determine how the firm is perceived in the stock market. 1)The trade volume among the United States, Canada, and Mexico more than tripled. A) total assets; total liabilities. This theory is called the, The theory of the term structure of interest rates which suggests that long-term rates are determined by the average of short-term rates expected over the time that a long-term bond is outstanding is the, A "normal" term structure of interest rates would depict, A firm will usually increase the ratio of short-term debt to long-term debt when. What does a Long run aggregate supply curve look like. Which of the following has not resulted from more active liability management on the part of banks? The statement of retained earnings reports the amount of dividends declared over a period of time. On January $1$, $2009$, Rod Zoot, Capital had a balance of $\$475,000$. A goal of cash management is to insure that the inflows and outflows of cash are synchronized. In some cases, bankruptcy may be the only course available. The interest factor for the present value of a single sum is equal to (1 + i)/i. A bank will want to hold more excess reserves (everything else equal) when A) it expects to have deposit inflows in the near future. Which of the following are considered licensors' benefit of licensing? Given the following information, how much will your annual benefits be? Use multiple regression to estimate a linear production function with value-added output regressed on labor and capital. WebPolicy: Central bank sells bonds on open market, central bank increases required reserve ratio. The cost of not taking a 2/10, net 30 cash discount is usually less than the prime rate. Risk exposure due to heavy short-term borrowing can be compensated for by. Ending a partnership can be difficult because of problems deciding: 1) the worth of a retiring partner's share, Select the disadvantages of a sole proprietorship, Mark, Cai and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. \text{Source} & \text{DF} & \text{Adj MS} & \text{Adj MS} & \text{F-Value} & \text{P-Value}\\ The company is required to maintain a minimum checking account balance of 10% of the outstanding loan. \text{S} & \text{R-sq} & \text{R-sq(adj)} & \text{R-sq(pred)}\\ Do these data suggest a statistically significant difference between the The dimension of social responsibility known as ______ includes everything from hiring minority workers to making safe products, minimizing pollution, using energy wisely, and proving a safe work environment. Its size and influences as a "super power", Foundations, universities and other nonprofit organizations own shares in publicly held companies, whose value is dependent directly upon____ of those companies, increasing public concern for the environment created by the ____ movement has more businesses looking for environmentally friendly ways to do business. Debt or financial leverage ratios help analysts determine whether a company has sufficient cash to repay its short-term debt obligations. What change might be expected on the balance sheets of its customers? Short-term interest rates are generally lower than long-term interest rates. \begin{array}{lrrrrr} SWIFT has combated the growing issue of electronic fraud with smart card technology that no longer requires users to manually log in to the network and thus eliminates any paper trail. Which of the following is true of the capital requirement? As a country's financial markets become more highly developed, we can expect monetary policy to be, When there is a high degree of trust in a country's banking system, the currency ratio will be. A journal entry contains a debit to a liability account and a credit to a revenue account. What much more or less will their initial annual earnings after taxes be if they choose the most aggressive financing plan? The revenue should be recorded when the CPA: The expense recognition principle requires the recognition of expenses: The Financial Accounting Standards Board(FASB) and the International Accounting Standards Board (IASB) are working together to develop similar standards. C. increases costs and increases differentiation. Implementing ethical standards within an organization starts with: Top officials in countries like Japan, South Korea, and China have faced legal charges of influence peddling and _____ charges, which serve as examples of the unethical behavior that U.S. companies face in overseas markets. Because ________ are less liquid for the depositor than ________, they earn higher interest rates. Holding all else constant, when a bank receives the funds for a deposited check, A) cash items in the process of collection fall by the amount of the check. A) Savings accounts, Which of the following is not a nontransaction deposit? Asset B has an expected return of 20% and a reward-to-variability ratio of .3. | Additional information | | A) Checkable deposits are payable on demand. Yield curves change very little in the short run (3 months). The beginning retained earnings balance is found on the: ) The financial statements are prepared from which columns of the trial balance worksheet? He can earn 7% annual return. The adjusting entry to be made on December 31 includes a: ) On December 31, 2019, salaries owed to employees total $4,050. During the year, the company purchased an additional $1,400 of supplies. A) Federal funds, Bank capital is equal to ________ minus ________. All of the following are examples of carrying costs except: The inventory decision model provides which type of information. Suppose the world price of steel rises substantially. Firms exposed to the risk of interest rate changes may reduce that risk by, A firm has invested in corporate bonds; it may engage in a financial futures contract in order to protect itself from, The effective rate on a loan with a 8.5% stated rate and 15% compensating balance is. The possibility of having all foreign assets expropriated is a disadvantage of ______ ______ ______. Carrie's Day Care will make an adjusting entry on December 31, 2019 to: ) At December 31, the NBC Company owes an employee for four days of work that will not be paid until January 5th. An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors: If you are your own boss, you are responsible for paying your own wages/salary and your own____, When there is one or more general partners and one or more limited partners, the firm is a(n), Partnerships are less likely to survive than sole proprietorships. What is the expected value of returns? (Round your final answer to two decimal places. WebStudy with Quizlet and memorize flashcards containing terms like _____ is the anticipation and organization of what needs to be done to reach an objective. A large manufacturing firm has been selling on a 3/10, net 30 basis. Of the following, which would be the first choice for a bank facing a reserve deficiency. Those who argue against the pursuit of the dual objectives of stable prices and high employment point to the __________ as evidence that the pursuit of dual objectives is misguided. -Making observations and identifying trends that are suggested by the ratio analysis, Ratios that help determine whether a company can access its cash and pay its short-term obligations are called, Ratios that help determine the efficiency with which a company manages its day-to-day tasks and assets are called, Ratios that help assess a company's ability to service the interest and repayment obligations on its long-term debt and the degree to which it uses borrowed versus invested financial capital are called. If the firm goes with a short-term financing plan, their rate will be 8 percent, and with a long-term financing plan their rate will be 9 percent. If Green Caterpillar's forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? $\$ 36,000$ b. A) long-term; shorter-term. a. Bankers concerns regarding the optimal mix of excess reserves, secondary reserves, borrowings from the Fed, and borrowings from other banks to deal with deposit outflows is an example of. -The horizontal axis of the aggregate demand and aggregate supply model measures the overall _____. Finance paper usually carries a higher rate of interest than direct paper. B) A banks liabilities are its uses of funds. How does a partnership share responsibility? Alternatively, Kuznets can borrow short-term and pay 7 percent interest in the first year. If a company can implement cash management systems and save 3 days by reducing remittance time and 2 days by increasing disbursement time based on $3,000,000 in average remittances and $2,500,000 in average disbursements and their return on freed up funds is 12%, what is the max they should spend on the system? WebStudy with Quizlet and memorize flashcards containing terms like Consumers should comparison shop for credit just as they would for any other consumer good or service. What is his effective rate of interest? a. | Raw materials inventory | $72,000 |$110,000 | The company decides to issue stock and receives cash of $150,000. Bandolier Confections has been running low on office space and doesn't have the money to expand. If a company has a quick ratio of less than 1 but a current ratio of more than 1 and if the difference between the two ratios is large, then the company depends heavily on the sale of its inventory to meet its short-term obligations. There were $1,100 of supplies on hand at the end of the year. He has asked you to prepare several production functions using some historical data from the United States. The furniture is depreciated using the straight-line method and has an estimated service life of 7 years and no residual value. When cash-basis accounting is used, and services are provided on account: An expense occurred in 2018, but it is not paid until 2019. ), Dooley Company had current assets of $1,552, current liabilities of $1,413, total assets of $1,742, and long-term liabilities of $1,210. In general, banks make profits by selling ________ liabilities and buying ________ assets. Buffalo Outback Outfitters is a public company with $37,360,000$ shares of stock outstanding. An aggressive working capital policy would have which of following characteristics? The difference between the amount of cash on the firm's books and the amount credited to it by the bank is, The system whereby funds are moved between computer terminals without use of checks is. Suppose that a central bank pursues expansionary monetary policy by purchasing bonds. Winter Company earned revenues of $150,000 in cash and $200,000 on account during 2018. &&\\ The fraction of checkable deposits that banks are required by regulation to hold are A) excess reserves. The current ratio is: ) Brankov Company has current assets of $115,000 and current liabilities of $140,000. ratios help measure a company's ability to generate income and profits based on its invested capital. Looking To Improve Your Website's Search Engine Optimization? Social responsibility and ethical problems exist primarily in the U.S. because we have more laws about those problems? Banks that actively manage liabilities will most likely meet a reserve shortfall by A) calling in loans. Which of the following is not a true statement about automated clearinghouses (ACHs)? b. Caroline is a 10-year-old student at Southside Middle School. WebWhich one of the following is a liquidity ratio? Dan is being sued for malpractice, but it will not affect Bob's assets because they formed a(n) _____ _____ partnership. ), ) Rosewood Company had current assets of $612, current liabilities of $393, total assets of $722, and long-term liabilities of $200. The net income of Chewco Co. was $50,000 for 2014. 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