The correct answer is d. Cash, $94; Cash Over and Short, $3. When a petty cash fund is replenished, the journal entry should include a credit to the petty cash account for the amount of disbursements recorded in the receipts, and a credit to the cash account for the amount of cash received to replenish the fund.
In this case, the journal entry should include a credit to the petty cash account for $94, to reflect the amount of disbursements recorded in the receipts. It should also include a credit to the cash account for $94, to reflect the amount of cash received to replenish the fund. If the amount of cash received is more or less than the amount of disbursements recorded in the receipts, a credit to the cash over and short account may also be needed to reconcile the difference. In this case, the amount of cash received is $97, which is $3 more than the amount of disbursements recorded in the receipts. Therefore, the journal entry should also include a credit to the cash over and short account for $3.
Debit: Petty Cash, $250 (to replenish the fund back to its original level)
Credit: Petty Cash, $97 (for the cash returned)
Credit: Cash, $153 (to bring the fund back up to its original level of $250, calculated as $250 - $97)
Debit: Cash Over and Short, $3 (calculated as $94 - $97)
Credit: Cash, $3
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The Dubuque Cement Company packs 80-pound bags of concrete mix. Time-study data for the filling activity are shown in the following
table. Because of the high physical demands of the job, the company's policy is a 25% allowance for workers. (Round all intermediate
calculations to two decimal places before proceeding with further calculations.)
Element
Grasp and place bag
Fill bag
Seal bag
Place bag on conveyor
Performance
Rating
110%
80%
105%
85%
1
8
37
16
8
Observation (seconds)
2
8
42
17
6
3
9
38
12
9
Bag breaks open; included as delay in the allowance factor
A Conveyor jams; included as delay in the allowance factor
a) The standard time for this process = seconds (round your response to two decimal places).
4
12
34
20
30^
5
8
114
18
34
Answer:
g
Explanation:
d
Ivanhoe Company issued $492,000 of 10%, 20-year bonds on January 1, 2017, at 104. Interest is payable semiannually on July 1 and January 1, Ivanhoe Company uses the straight-line method of amortization for bond premium or discount.
Prepare the journal entries to record the following.
(a) The issuance of the bonds.
(b) The payment of interest and the related amortization on July 1, 2017.
(c) The accrual of interest and the related amortization on December 31, 2017.
Answer:
Explanation:
For answer , see the attached file.
HURRY LOTS POINTS FAST!!!When you gather primary or secondary data, what part of the market information management process are you participating in? A. Market positioning B. Market research C. Data analysis D. Data mining Please select the best answer from the choices provided
Answer:
B) Market Research
Explanation:
Market research involves gathering both primary and secondary data. Collecting both company and interested parties information is an essential element in financial analysis since it makes you a more informed decision-maker and therefore more likely to make rational and wise decisions.
. Discuss and Implement the Price Adjustment Strategies in current market. Apply each strategy with 3 examples along with picture. (10 Marks) (200 Words)
Answer:
There are many different price adjustment strategies which can be implemented in the current market.
Explanation:
Psychological pricing:
Psychological pricing is a strategy in which the price of a product is displayed with mostly one cent difference so the whole number shown is less by $1 and this difference can get higher if the price of the product is more.
Example 1: The price for a toy in a toy shop is $4.99, if rounded this will be $5 but the whole number visible is $4.
Example 2: The price of a laptop is $193, this again is nearly $200 but the price is reduced by $7 in order to influence their customers into buying the product.
Example 3: The price of a car is $35,995, this again is about $36,000 but the buyer may be influenced by this technique and result in purchasing the product with such price.
Geographical Pricing:
Geographical pricing is a strategy where different prices are charged in different outlets, this strategy is made keeping in mind the purchasing power of the locality, if the local people can pay higher price for a product then the price is high there but same product may have a lower price in an area where people can not pay high price.
Example 1: Price of a T-shirt is $15 in a posh area while the price of the same T-shirt is $5 in an area with poor locality.
Example 2: Price of a hair brush is $10 in a poor area while the same brush is available in a posh area at a rate of $35.
Example 3: Price for a food item is $6 in a restaurant in posh area while the same burger is available for $3 in a restaurant in a poor area.
Which of the following best describes what happens if one more unit of labor is used? Choose 1 answer:
A) MPL increases
B) MPL equals total product of labor (TPL)
C) APL is maximized
D) APL increases.
E) MPL is minimized
MPL increases, best describes what happens if one more unit of labor is used. Thus, option (a) is correct.
The change in output brought on by adding a new unit of labour is known as the marginal product of labour (MPL).
MPL stands for the extra output that can be produced with an additional unit of labour. If MPL rises, it indicates that the extra output produced by the additional unit of labour is larger than the output produced by the original unit of labour.
Therefore, option (a) is correct.
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what are the purpose of the information in Management?
Answer:
The purpose of information management is to: design, develop, manage, and use information with insight and innovation. support decision making and create value for individuals, organizations, communities, and societies.
Answer:
It helps dictate how businesses form strategies, and implement processes based on them.
5. Based on the outcome, where did Paterno's intentions go wrong? In what ways could followers have changed the moral climate at Penn State?
Note that based on the outcome, Paterno's intentions went wrong.
How is this so?Rather than following up on the allegations against Sandusky, Paterno made it a priority to safeguard the reputation of the football program and university – which fettered his intentions.
Unfortunately, this created an environment that encouraged silence and cover-ups, allowing Sandusky to continue with his abuse for years despite clear indicators. The followers at Penn State could have galvanized a cultural shift by speaking out about the rampant abuse and demanding prompt action from university authorities.
In short, they had every opportunity to prioritize victim safety over retaining their loyalty towards the esteemed institution. Through the practice of holding the powerful accountable and advocating for transparency and action, it would have been possible to attenuate further harm and encourage a culture that emphasizes accountability and responsibility.
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In Year 1, the investor acquired 10% ownership of investee and applied fair value method to account for the investment. In Year 2, the investor acquired another 30% ownership and applied equity method to account for the investment (40% ownership). In Year 3, the investor sold 35% ownership of the investee and started using fair value method again to account for the investment (5% ownership). Should the investor apply retrospective adjustment in Year 2 and Year 3
Answer:
b
Explanation:
Which measure of central tendency is affected by outliers?
The measure of central tendency that is most affected by outliers is the mean.
The mean is calculated by summing all the values in a dataset and dividing it by the number of data points. However, if there are outliers present in the dataset, which are extreme values that significantly differ from the rest of the data, they can heavily influence the mean.
Outliers have a disproportionate impact on the mean because they contribute to the sum of the values and can pull the mean towards their extreme values.
In summary, while the mean is more susceptible to the influence of outliers, the median and mode are more resistant to their impact and often provide more reliable measures of central tendency in such cases.
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Compute the cost that is assigned to the car wheels and truck wheels product lines using an activity-based costing system, given the following information. (Round answers to 0 decimal places, e.g. 1,575.) Expected Use of Cost Drivers per Product Car Truck Number of setups 200 800 Direct labor hours 40,000 30,000 Number of inspections 100 1,100
Answer:
Results are below.
Explanation:
First, we need to calculate the activity rates. We weren't provided with the estimated costs for each activity. I will assume some costs and formulas to guide an answer.
Set up costs= $100,000
Assembly (direct labor)= $1,200,000
Inspection= $250,000
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Set up= 100,000 / 1,000= $100 per set up
Assembly= 1,200,000 / 70,000= $17.14 per direct labor hour
Inspection= 250,000 / 1,200= $208.33 per inspection
Now, we can allocate costs to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Car:
Set up= 100*200= $20,000
Assembly= 17.14*40,000= $685,600
Inspection= 208.33*100= $20,833
Truck:
Set up= 100*800= $80,000
Assembly= 17.14*30,000= $514,200
Inspection= 208.33*1,100= $229,163
You have $2,500 to deposit into a savings account. The five banks in your area offer the following rates. In which bank should you deposit your savings
Answer:
Meh why did you not show us the rates? How are we supposed to know. Anyway you should deposit it in the one with the highest rate
Explanation:
The more the interest rate, the more you will benefit because it represents an additional cash that you're receiving on your savings.
A bank should you deposit your savings in Bank B: 3.69%, compounded monthly. The correct option is (5).
What do you mean by Saving account?Savings accounts are deposit accounts with fewer transaction restrictions than current accounts, which are used for daily transactions.
There are numerous types of savings accounts, but the deposit account, money market account, and certificate of deposit are the three most popular.
Every one of them begins with the same fundamental premise: deposit money with a bank, and in exchange, the money will earn interest.
Therefore, in Bank B: 3.69%, compounded monthly, the bank should you deposit your savings.
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This is an incomplete question, the complete question is:
You have $2,500 to deposit into a savings account. The five banks in your area offer the following rates. In which bank should you deposit your savings?
0 Bank C: 3.70% compounded semi-annually.
O Bank E: 3.65% compounded quarterly.
O Bank D: 3.67% compounded continuously.
O Bank A: 3.75%, compounded annually.
O Bank B: 3.69%, compounded monthly.
after a customer buys a custom cake or receives catering service from for goodness bakes, a service representative contacts each customer to conduct a survey. the survey information is a form of output.
Yes, that is correct. The survey information collected from customers is a form of output, as it is the result or outcome of the customer service representative's efforts.
This is done to gather feedback on the customer's experience with For Goodness Bakes' products and services. This output can be used to improve the company's products and services, and to identify areas where the company can enhance customer satisfaction and loyalty. Additionally, this information can be used to track customer satisfaction, identify customer needs and preferences, and improve the overall quality of the product and services. Output is any data that is generated from a process, such as a survey. Feedback on the customer's experience is a form of input for the company, as it provides valuable information that can be used to improve the company's products and services. By gathering feedback from customers, the company can identify any issues or concerns that customers may have with their products or services and make changes to address them. Additionally, feedback can help the company identify customer preferences and needs, which can inform future product development and marketing efforts. Overall, customer feedback is an important input for the company as it helps them understand how their products and services are perceived by the customers and make necessary adjustments.
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Which of the following is a characteristic of a money market account? Group of answer choices A.Account holder can withdraw cash easily B. Simple to use with debit cards and checks C. Offers a high rate of return on deposits D. Has the potential for identity theft
Answer:
C. Offers a high rate of return on deposits
Explanation:
A money market deposit account (MMDA) is among the savings accounts available to customers from financial institutions such as banks and credit unions. The interest or dividend rates offered by the MMDa are higher than those offered by traditional savings and checking accounts. The interest rates offered by MMDA compete with those of certificates of deposit.
Money Market Deposit accounts are an indirect way of investing in short-term money market securities such as treasury bills and commercial papers. The returns in MMDA are tied to those of money market investments.
Money market accounts are a type of savings account offered by banks and financial institutions. The characteristic of a money market account among the given choices is account holder can withdraw cash easily. Hence, option A is the correct answer.
They are known for providing liquidity and easy access to funds. Unlike some other types of accounts, money market accounts typically allow the account holder to withdraw cash easily without incurring penalties or restrictions.
This makes them convenient for individuals who want to have quick access to their funds while still earning some interest on their deposits.
Hence, option A is the correct answer.
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10 Ways Custom Rigid Boxes Will Help You Get More Business?
Answer:
How Custom Rigid Boxes Help Your Business?It is Easy to Print Custom Boxes,Let Custom Boxes Advertise your Product,Black Rigid Boxes have Fine and Smooth Surface,White Rigid Boxes are an Emblem of Appearance and Quality,Save your Money with Wholesale Rigid Boxes,Expand the Reach of Your Product with These boxes,Protect Your Products in the Best Possible Way with These Boxes,Will make your products stand out from the competition,Eco-friendly Materials to Consider for Rigid Boxes,Rigid Packaging Box Customization is easier.
WHEN MUST A TAXPAYER WHO HAS RECIEVED STOCK APPRECIATION RIGHTS FROM AN EMPLOYER INCLUDE THE VALUE OF THE RIGHTS IN INCOME
Answer:
"There are no federal income tax consequences when you are granted stock appreciation rights. However, at exercise you must recognize compensation income on the fair market value of the amount received at vesting. An employer is generally obligated to withhold taxes. Depending on the rules of your plan, the employer may satisfy that withholding obligation by withholding cash or shares. The remaining net proceeds will be deposited into a brokerage account. If you receive net shares and sell them at a later point, the appreciation in value of the shares from the time of exercise to the time of sale will be treated as a capital gain or loss. Whether it is a long-term or short-term gain or loss will depend on how long the shares are held."
Explanation:
I don't know if this helps, but here is a quate i found.
https://www.fidelity.com/webcontent/ap002390-mlo-content/18.09/help/learn_stock_appreciation_rights.shtml
What is the name of the legal system that gives judicial decisions the force of law? A Commmon Law B European Law C Civil Law
Answer:
the answer is A) common law
Entrepreneurs generally think differently about resources than do employee-managers in which of the following ways?
Managers want larger budgets; entrepreneurs work to do more with less.
How do entrepreneurs approach resources differently from employee-managers?Entrepreneurs have a distinct mindset when it comes to resources compared to employee-managers. While managers often seek larger budgets to accomplish their goals, entrepreneurs tend to focus on doing more with less.
This difference in perspective stems from the inherent nature of entrepreneurship which involves taking calculated risks and maximizing efficiency in resource allocation.
Entrepreneurs understand that resources, such as capital, time, and manpower, are limited and valuable. They recognize that acquiring substantial budgets may not always be feasible, especially in the early stages of a venture.
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The operating budget provides a roadmap for financial plans for a short-term, future period. What is a typical “future period” for an operating budget?
An operating budget is a financial statement that outlines the organization's expenditures and revenues for a specific period.
The operating budget is typically for a fiscal year, which is usually twelve months. The future period for an operating budget is usually a fiscal year or less than a year. The operating budget is critical because it establishes guidelines for financial activities and operations in an organization. It provides a roadmap for financial plans for a short-term, future period, which typically begins on January 1st and ends on December 31st.
An organization creates an operating budget to aid in the allocation of resources and expenditures to achieve its objectives for a given period. A typical operating budget is for a fiscal year. A fiscal year is the period when an organization prepares its financial statements. It is usually 12 months, but it may be shorter or longer depending on the organization. An operating budget typically covers one fiscal year; however, it may be longer or shorter based on the organization's preferences.
The future period for an operating budget is frequently updated to reflect the company's current situation and financial standing. It takes into account the actual results of the previous period and the estimated expenditures and revenues for the upcoming year to develop the operating budget for a future period.
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While going into a forest and clear-cutting all of the trees may not be environmentally friendly, it is very efficient and less than sustainable practices.
1.) damaging
2) dangerous
3.) effective
4.) expensive
clear-cutting all of the trees damaging and dangerous practice, hence the correct options are 1 and 2.
What is deforestation?Deforestation, also known as forest clearance, is the removal of a forest or tree stand from land before it is put to another use other than that of a forest.
Conversion of forest land to farms, ranches, or urban use is a form of deforestation. Tropical rainforests are where deforestation is most prevalent.
Forests have been cleared throughout history and into the modern era to make room for agriculture and animal grazing as well as to obtain wood for fuel, manufacturing, and construction.
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The management of a company finds that while the cost of making a component part is Rs. 15, the same is available in the market at Rs. 13 with an assurance to continuous supply. The cost information for production is as follows:
Rs.
(i) Material
3.50
(ii) Direct labour
5.50
3.00
(iii) Other variable expenses
(iv) Fixed expenses
3.00
Total
15.00
Give a suggestion whether to make or buy this part. Give also your views in case the supplier reduces the price form Rs. 13 to Rs. 11.
In this scenario, it would be advisable for the company to continue buying the component from the supplier, as it offers a cost advantage over the in-house production. Moreover, the continuous supply assurance remains a valuable benefit.
To determine whether the company should make or buy the component part, we need to compare the costs of both options and consider other factors that may influence the decision.
In this case, the cost of making the component part is Rs. 15, which consists of material costs (Rs. 3.50), direct labor (Rs. 5.50), other variable expenses (Rs. 3.00), and fixed expenses (Rs. 3.00). On the other hand, the component is available in the market for Rs. 13 with a continuous supply assurance.
Initially, the company should consider buying the part rather than making it. The market price of Rs. 13 is lower than the cost of production at Rs. 15. By buying the component, the company can save Rs. 2 per unit. Additionally, the assurance of a continuous supply eliminates the potential risks associated with production delays or quality issues.
However, if the supplier reduces the price from Rs. 13 to Rs. 11, the decision becomes more nuanced. At this reduced price, the cost of buying the component would be lower than the cost of production. Buying the part for Rs. 11 would result in a cost saving of Rs. 4 per unit compared to making it in-house.
It's important to note that the decision should not be based solely on cost considerations. Other factors, such as the company's core competencies, capacity utilization, quality control, lead times, and strategic priorities, should also be taken into account.
However, based on the cost information provided, the company should initially buy the part and continue to do so even if the supplier reduces the price to Rs. 11.
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Maite has money in an interest-bearing account. The table shows how much money is in the account at the end of each year.
Depending on the question Maite will have $1.194.05 ($1,159.27 × 1.03) there in bank at the conclusion of the seventh year.
What is exponential factor?Due to the fact that this is a mathematical sequence, we apply an exponential factor to calculate the amount of money that Maite will have in her account at the conclusion of each year.
1. This scenario shows a geometric progression.
An exponential growth factor is used to enhance the length of a geometric sequence.
2. The common exponential factor is 1.03 (which gives a growth rate of 3% annually). See the calculation for this factor below.
3. Maite's account balance will be $1,194.05 at the conclusion of the seventh year. See the calculation below.
Data and Calculations:
Year Amount
1 $1,000.00
2 $1,030.00
3 $1,060.90
4 $1,092.73
5 $1,125.51
6 $1,159.27 ($1,125.51 × 1.03)
7 $1,194.05 ($1,159.27 × 1.03)
The common exponential factor = 1.03 (1 + 0.03)
To obtain the common exponential factor, subtract Year 2 account balance from Year 1 account balance. Divide the result by Year 1 account balance. This operation can also be carried out with Year 2 and Year 3 balances or Year 4 and Year 5 balances.
Utilizing Year 5 as both a benchmark, calculate Maite's account balance at the conclusion of Year 6 as follows: (Annual 5 balance sheet shows *Exponential Factor)
= $1,159.27 ($1,125.51 × 1.03)
We take Year 6 above as the foundation to calculate Year 7 account balance.
= $1.194.05 ($1,159.27 × 1.03)
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The Complete Question :
Question 1: Ron Knuckle set up a business selling keep fit equipment, trading under the name of Buy Your Biceps Shop. He put $7.000 of his own money into a business bank account (transaction A) and in his first period of trading, the following transactions occurred. Transactions:
B: Paid rent of shop for the period: $3.500.
C: Purchased equipment (inventories) on credit: $5.000.
D: Raised loan from bank: $1.000.
E: Purchase of shop fittings (for cash): $2.000.
F: Sales of equipment cash: $10.000.
G: Sales of equipment, on credit: $2.500.
H: Payments for trade accounts payable: $5.000.
I: Payments from trade accounts receivable: $2.500.
J: Interest on loan (paid): $100.
Required: Identify the debit, the credit entries and the amount in the above transactions
Answer:
Explanation: YOU WOULD GET 300,000
Click on the Bloomberg
screen to examine refining
margins for US Mid-Continent
Topping refineries. What is the
overall margin trend across all
crude oil grades?
Answer:
It is mostly declining
Explanation:
..
US refining margins mostly trended slightly lower for the week ended April 23 but recovered from a midweek slump on a rosier picture for transportation fuels going forward, ending the week on an upward trajectory, and analysis from S&P Global Platts showed on April 26.
What does OPEC mean?
The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
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Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $40,000 at the beginning of the month and $26,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $58,600 and direct labor cost of $33,400. The actual manufacturing overhead cost incurred was $54,800. The manufacturing overhead cost applied to Work in Process was $54,600. The cost of goods manufactured for June was:
Answer:
$160,600
Explanation:
The computation of the cost of goods manufactured is shown below:
= Direct material cost + direct labor cost + manufacturing cost applied + beginning work in process - ending work in process
= $58,600 + $33,400 + $54,600 + $40,000 - $26,000
= $160,600
Hence, the cost of goods manufactured for June is $160,600
Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.40 per card, and the cost of printing is $0.10 per card. The company receives $3.75 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,300 and standard deviation 200. (Assume these four are independent.)
What is the optimal production quantity for the card?
Answer:
≈ 9644 quantity of card
Explanation:
given data:
n = 4 regions/areas
mean demand = 2300
standard deviation = 200
cost of card (c) = $0.5
selling price (p) = $3.75
salvage value of card ( v ) = $ 0
The optimal production quantity for the card can be calculated using this formula below
= u + z (0.8667 ) * б
= 9200 + 1.110926 * 400
≈ 9644 quantity of card
First we have to find u
u = n * mean demand
= 4 * 2300 = 9200
next we find the value of Z
Z = ( \(\frac{p-c}{p-v}\) )
= ( 3.75 - 0.5 ) / 3.75 = 0.8667
Z( 0.8667 ) = 1.110926 ( using excel formula : NORMSINV (0.8667 )
next we find б
б = 200\(\sqrt{n}\) = 400
Why My LinkedIn Lead Generation Is Failing?
Answer:
Your LinkedIn lead generation is failing due to the following mistakes:
Mistake 1. Not Choosing the Right LinkedIn Automation ToolMistake 2. Sending and Sharing Self-Promotional ContentMistake 3. Not Personalizing ContentMistake 4. Not Segmenting LeadsMistake 5. Not sending Follow-UpsMistake 6. Not Paying Attention To StatsThere are tons of big and small mistakes that marketers make when it comes to LinkedIn lead generation. However, the worst thing is to not learn from those mistakes and keep repeating the mistakes.
Explain how political and international factors pose challenges to businesses.
Answer:
Synonyms:complicated, difficult, complex, elaborate, confused, confusing, incomprehensible, intricate, contorted, involved
Antonyms:straightforward, simple, make sense, understandable, intelligible, apparent, easy, evident, clear-cut, manifest
Entry:decadence
Synonyms:indulgence, self-indulgence, sybaritic, epicurean, extravagance, weakness, fun-loving, for fun, for a laugh
Entry:evil
Synonyms:the Devil, satanism, black mass, the forces of darkness/evil, satanic, Old Nick, horn, Satan
Entry:two-edged
Synonyms:mixed, patchy, spotty, mixed blessing, six of one, (and) half a dozen of the other, a double-edged/two-edged sword, work both ways, the rights and wrongs of something, cut both ways
Using the thesaurus
Share this entry
SYNONYMS OF THE DAY
happy© PHOTODISC
happy
feeling pleased and satisfied
Synonyms:
glad
alive
pleased
content
satisfied
contented
Browse more
TRENDING WORDS
put off
make someone not want or like something
8.4%
take up
start doing something regularly
-0.9%
take on
start to employ someone
2.5%
keen on something
interested in something and enjoying it
-3.1%
I couldn’t agree more
used for emphasizing that you agree
-10.0%
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Explanation:
Write the quadratic equation in standard form that corresponds to the graph shown below.
The quadratic equation of the graph in standard form is y = x² + 2x - 8
What is a quadratic equation in standard form?A quadratic equation in standard form is given by y = ax² + bx + c
Given the graph below, to write the quadratic equation for the graph in s tandard form, we notice that the graph has two x - intercepts at
(-4, 0) and(2, 0)The x - intercepts are the roots of the quadratic equation.
So, we have that
x = -4 andx = 2So,
x + 4 = 0 andx - 2 = 0So, the factors of the quadratic equation are
x + 4 andx - 2So, multiplying the factors, we have that the equation is
y = (x + 4)(x - 2)
= x² - 2x + 4x + 4 × (-2)
= x² - 2x + 4x - 8
= x² + 2x - 8
So, the quadratic equation is y = x² + 2x - 8
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Describe the power relationship between Numi and its supply chain partners.
In any supply chain, power dynamics can vary depending on various factors, such as the size of the companies involved, the type of product or service being supplied and the degree of competition in the market.
What is a product?In economics, a product refers to good or service that is produced, marketed, and sold to satisfy customer's needs and wants. A product can be tangible, such as a physical item like a smartphone or a car, or intangible, such as a service like consulting or healthcare. The production of a product involves various stages, including design, development, manufacturing, and distribution. A successful product must fulfill the needs and wants of the target market, be competitive in terms of quality and price, and be marketed effectively to reach potential customers. In addition to meeting customer demands, a product must also comply with relevant regulations and standards to ensure safety, quality, and sustainability. Ultimately, the success of a product depends on its ability to generate revenue and profit for the company that produces it.
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Calculate the NPV of some personal investment decision, such as buying a washing machine instead of using the soap
with the hand or replacing an old car with a new one. Ignore the extra convenience of the new asset. Just focus on the
cash costs and benefits.
Answer:
One of the most expensive kitchen appliances is a refrigerator, but purchasing a new refrigerator is generally a good idea.
Imagine your mother currently owns an old refrigerator, maybe 15-20 years old (refrigerators can last a long time). She never thought of changing it but you will convince her of doing so.
You take your mother to a Walmart (or any other local store) and find a big and shiny refrigerator that costs $1,500.
we can determine the NPV of buying it:
initial outlay = -$1,500
cash flow = savings in electric bill per year. On average, old refrigerators cost about $200 per year in electricity, while modern energy efficient refrigerators cost between $35 per year. Lets say you save $165 per year.
The useful life of the refrigerator will be again 15 years, and you consider that 7% is a good discount rate (more than what you could earn with a CD).
PV of annual savings = $165 x 9.1079 (PV annuity factor, 7%, 15 periods) = $1,502.80
so the NPV of buying a new refrigerator = -$1,500 + $1,502.80 = $2.80
Since the NPV is positive, you should be able to convince your mother.