Answer:
False
Explanation:
While preparing the raw material budget for the period we calculate the total purchases to be made in the period concerned to meet the demand of raw material.
Demand in the period concerned = Total raw material required in production in current period + Total balance of inventory to be kept as closing inventory of current period - The opening available balance of inventory.
This is equal to the purchases to be made.
Thus, closing inventory is added and opening is deducted.
Therefore, the statement is question is not correct and is therefore, false.
Answer: Economic cost = $175,000
Accounting cost = $100,000
Explanation: The difference between economic cost and accounting coast is economic cost takes into consideration the next best alternative foregone, that is, opportunity cost whereas accounting cost only sums cost incurred. In the given case the interest on savings and salary of job is the opportunity cost of Jill.
Therefore,
Economic cost = $5000 + $70,000 + $80,000 + $40,000 - $20,000=$175,000
Accounting cost = $80,000 + $20,000 = $100,000
Answer:
2) an area where the firm can contribute to the green effort, as well as cut costs.
Explanation:
Banks and most private companies are continually looking for ways to reduce costs so that they can make larger profits. In this case, the bank will probably cut some costs by not using paper anymore.
The fact that it can be seen as a green effort is a plus to the cost saving. Green efforts are usually heavily publicized, even more if it's a bank. Banks usually have bad reputations so whatever makes them look good, and better if it's free (or in this case they even save money), just suits them perfectly.
Answer:
$8.078 million
Explanation:
we must use the same time periods, so instead of using an annual discount rate, we should use a quarterly rate:
effective quarterly interest = (1 + 0.16)¹/⁴ - 1 = 0.0378 = 3.78%
dividends per quarter = 0.3 million + 0.05 million = $0.35 million
terminal value of firm in quarter 4 = 0.35 / 0.0378 = $9.26 million
present value of terminal value = $9.26 / (1.0378)⁴ = $7.983 million
present value of 4 quarterly dividends = $0.3 x 3.64879 (PVIFA, 3.78%, 4 periods) = $1.095 million
NPV = -$1 + $1.095 + $7.983 = $8.078 million
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