Suppose that Tucker Industries has annual sales of $6.60 million, cost of goods sold of $2.94 million, average inventories of $1,205,000, and average accounts receivable of $660,000. Assuming that all of Tucker's sales are on credit, what will be the firm's operating cycle? (Round your answer to 2 decimal places.)
The operating cycle = Days inventory outstanding + days sale outstanding
Day inventory outstanding = (Beginning inventory + ending inventory) ÷ cost of goods sold × number of days in a year
= ($1,205,000) ÷ $(2,940,000) × 365 days
= 149.60 days
Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) ÷ Net sales × number of days in a year
2.) Which of the following is true? A. The convenience yield is always positive or zero. B. The convenience yield is always positive for an investment asset. C. The convenience yield is always negative for a consumption asset. D. The convenience yield measures the average return earned by holding futures contracts.
The correct answer is letter "A": The convenience yield is always positive or zero.
The convenience yield reflects the premium of possessing an asset instead of one of its derivates or contracts. This situation arises in front of inverted markets, where holding the asset itself may bring more profits than purchasing a derivate of the same asset.
The convenience yield tends to be positive or zero because the prices of assets cannot fall below zero. In other words, they are not negative.
convenience yield is a benefit of owning a physical asset over a futures contract. The yield is typically positive or zero. In the context of investment and consumption assets, the yield assumptions may vary.
The question is focusing on the concept of convenience yield in finance and its relationship with investment and consumption assets. Convenience yield is the non-monetary advantage or benefit that a holder gets from owning a physical good or an asset over a futures contract on that asset. If you decide to hold an asset as opposed to a futures contract on the asset, it means because the net benefits – that is the benefits from holding the asset, minus the benefits of holding the contract – must be nonzero. Therefore, option A is correct: The convenience yield is always positive or zero.
Moreover, for an investment asset, which is purchased with the hope that it will generate income or appreciate in value, the convenience yield is generally assumed to be zero because holding it delivers no utility beyond the financial returns it provides. So option B is not always true. The convenience yield being negative for a consumption asset, an asset purchased for current use, is also unlikely (option C is incorrect). Such a negative value would suggest that owning the asset is somehow disadvantageous - which contradicts the reason for purchasing a consumption asset. Lastly, the convenience yield does not measure the average return earned on futures contracts, therefore option D is also incorrect.
What is a service? Can services be differentiated as consumer services and industrial services? (AACSB: Communication; Reflective Thinking)
service is doing work to someone,:
----is supplying public a public needs example: tramsport
-----is emplyment as a servant
-------perios of employment with company or organization
The following data apply to Grullon-Ikenberry Inc. (GII): Value of operations $1,000, Short-term investments $100, Debt $300, Number of shares 100; The company plans on distributing $50 million as dividend payments. What will the intrinsic per share stock price be immediately after the distribution?pital-budget-850-000-wants-maintain-target-capital-structure-35-debt-65--q3670174
The correct option is the second one ,$7.50
The value of operations is $1,000
If dividends of $50 million is paid,such cash would be paid would be gotten from short-term investments of $100 million since it is easily convertible to cash without losing a significant portion of its value,hence the short term investments reduce to $50 million
Value of operations $1000
plus value of non-operating assets $50
Value of firm $1050
less value of debt ($300)
Intrinsic value of the firm $750
Intrinsic value of share=$750/100=$7.5
The intrinsic value per share is the total value attributable to common stock divided by the number of common stock in issue.
An Engel curve:________. A. slopes upward for normal goods and downward for inferior goods. B. slopes upward for inferior goods and downward for normal goods. C. slopes downward for both normal and inferior goods. D. slopes upward for both normal and inferior goods.
A. slopes upward for normal goods and downward for inferior goods.
In the case of Engle curve it plots the relationship between income and demand for a good.
In the case of the normal goods, as the income rises the demand also rises while on the other hand in the case of inferior goods, the income rises the demand false
So it sloped upward for the normal goods and slop downwards for the inferior goods
An Engel curve shows the relationship between the quantity of a good consumed and a consumer's income. It slopes upward for normal goods and downward for inferior goods.
An Engel curve shows the relationship between the quantity of a good consumed and a consumer's income. It helps us understand how the demand for a particular good changes as income levels vary.
The correct answer to the question is A. An Engel curve slopes upward for normal goods and downward for inferior goods. This means that as income increases, the demand for normal goods also increases, while the demand for inferior goods decreases.
For example, if someone's income increases, they may choose to consume more high-quality goods like organic food instead of cheaper alternatives. This would result in an upward-sloping Engel curve for organic food, indicating that it is a normal good.
The goal of data analytics is to get results to make better decisions and better outcomes for business. Think about Descriptive, Predictive, and Prescriptive analytics and provide some examples with your thoughts behind your statements.
Data analysis is a process used to explore, refine, modify, and model the data for finding useful information, making conclusions, and making decisions. Data analysis is a process used to obtain raw data and to make it more user-friendly by decision-making. The data is collected first, and then analyzed to answer questions, test hypotheses, or reject theories.
Descriptive analysis or statistics are one of the three basic parts of statistics science. It is the statistics about compiling, collecting, summarizing and analyzing numerical data. The main difference of descriptive statistics from inferential statistics or inductive statistics with more appropriate terms is that the goal of descriptive statistics is to express and summarize a data set as quantitative number values or count or sort values, and about the character of the statistical population that is accepted to represent such data as inferential statistics. is not the goal of obtaining analytical expressions for predictive or hypothesis testing. Even though the analysis of quantitative data is a study aimed at obtaining its main results using inductive statistical analysis, descriptive statistics tools must be used to support formal analysis. For example, a study involving a formal statistical analysis with topics of human behavior typically covers the overall sample size, sample size of important subgroups, average age, male / female ratios of people treated as data subject, and various demographic, social or clinical characters. supplied with tables.
Predictive analytics is a class of data analysis methods that focuses on predicting the future behavior of objects and subjects in order to make optimal decisions. Predictive analytics uses statistical methods, data mining methods, game theory, analyzes current and historical facts to make predictions about future events. In business, predictive models use patterns found in historical and executed data to identify risks and opportunities. Models capture relationships among many factors to make it possible to assess the risks or potential associated with a particular set of conditions, guiding decisions about possible transactions. It is used in actuarial calculations, financial services, insurance, telecommunications, retail, tourism, healthcare, pharmaceuticals and other fields. One of the well-known applications is credit scoring, scoring models process credit history, loans, consumer data and other information and provide an assessment of a potential borrower in terms of prospective solvency and forecast of timely payments on loans. One of the drawbacks of predictive analytics is the weak accounting for qualitative shifts, changes after bifurcation points, since they are built on quantitative, probabilistic methods.
The prescriptive analysis is the third and final phase of the business analysis. Extended prescriptive analysis beyond predictive analysis specifying both the actions necessary to achieve the predicted results and the related effects of decision. This phase of analysis uses the suggestions of the applications of mathematical and computational sciences to take advantage of the results of descriptive and predictive analyzes. Usually, in a first phase a descriptive analysis is made, widely used in the majority of today's business areas and it answers the question of what happened and why. Then a predictive analysis is done or should be done that answers the question of what will happen: historical data is combined with rules, algorithms and occasionally data external to the company or organization to determine a probable event. Finally, the prescriptive analysis phase which aims to recommend actions for the benefit of predictions and show their implications and why they will occur
Delicious Desserts is thinking about ending the production of two types of ice cream. Financial data related to the products is provided below: Rum Raisin Blue Moon Sales $680,000 $573,000 Variable expenses 246,000 219.000 Fixed expenses 468,000 364,000
If Delicious stops making Rum Raisin ice cream, it estimates it can eliminate 75% of the fixed costs associated with that product. Similarly, if it stops making Blue Moon, it estimates it can eliminate 70% of the fixed costs associated with that product. Given these figures, which of the following statements is true?
A) Delicious would be worse off if it discontinues Rum Raisin and would be better off if it discontinues Blue Moon. B) Delicious would be better off if it discontinues Rum Raisin and would be worse off if it discontinues Blue Moon. C) Delicious would be better off if it discontinues both products. D) Delicious would be worse off if it discontinues either product.
The correct choice here is A)
Delicious would be worse off if it discontinues Rum Raisin and would be better off if it discontinues Blue Moon.
Lets look at the figures:
Calculate the Total Costs for each product.
Total Cost (TC) = Fixed Cost + Variable Cost
TC for Rum Raisin =
TC for Blue Moon =
$219,000 + $ 364,000
= $ 583 000
The business estimates that it can eliminate it's Fixed cost to a certain degree. Lets look at each before we make a decision.
New TC for each business is given as below:
New TC for Rum Raisin if 75% of Fixed Cost is eliminated =
$246,000+ ($468,000 x 25%)
= $246,000 + $117,000
New TC for Rum Raisin Ice Cream = $363,000
New TC for Blue Moon if 70% of it's Fixed Cost is removed =
$246,000+ ($468,000 x 30%)
= $246,000 + $140,400
New TC for Blue Moon Ice Cream = $386,400
The company Delicious is better off eliminating the product with the highest TC all other factors remaining accounted for and taken into consideration.