Answer:
The correct answer is "$ 30.34".
Explanation:
The value of the stock can be computed by the following formula:
⇒ [tex]\frac{Dividend \ in \ year \ 3}{(1 + Required \ return \ rate)2} + \frac{Dividend \ in \ year \ 4}{(1 + Required \ return \ rate)3} + \frac{Dividend \ in \ year \ 5}{(1 + Required \ return \ rate) 4 } + \frac{1}{(1 + Required \ return \ rate)4 }\times [\frac{( Dividend \ in \ year \ 5 (1 + Growth \ rate)} {( Required \ return \ rate - Growth \ rate)}][/tex]
On putting the values, we get
⇒ [tex]\frac{1.50}{1.08^2} + \frac{1.60}{1.08^3} + \frac{1.75}{1.08^4 } + \frac{1}{1.08^4} \times [ \frac{( 1.75\times 1.03)}{(0.08 - 0.03)}][/tex]
⇒ [tex]\frac{1.50}{1.08^2 } + \frac{1.60}{ 1.08^3 } + \frac{37.80}{ 1.08^4 }[/tex]
⇒ [tex]30.34[/tex] ($)
On January 1, 2020, the ledger of Sunland Company contains the following liability accounts.
Accounts Payable $53,500
Sales Taxes Payable 7,200
Unearned Service Revenue 16,500
During January, the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
12 Performed services for customers who had made advance payments of $10,500. (Credit Service Revenue.)
14 Paid state revenue department for sales taxes collected in December 2019 ($7,200).
20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty.
21 Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.
25 Sold merchandise for cash totaling $7,884, which includes 8% sales taxes.
Required:
Journalize the January transactions.
Answer:
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
Dr Cash 20,520
Cr Sales revenue 19,000
Cr Sales taxes payable 1,520
12 Performed services for customers who had made advance payments of $10,500. (Credit Service Revenue.)
Dr Unearned revenue 10,500
Cr Service revenue 10,500
14 Paid state revenue department for sales taxes collected in December 2019 ($7,200).
Dr Sales taxes payable 7,200
Cr Cash 7,200
20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty.
Dr Cash 48,600
Cr Sales revenue 45,000
Cr Sales taxes payable 3,600
*An additional entry for recording warranty liability must be made but we are not given any estimated warranty costs.
21 Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.
Dr Cash 27,000
Cr Notes payable 27,000
25 Sold merchandise for cash totaling $7,884, which includes 8% sales taxes.
Dr Cash 7,884
Cr Sales revenue 7,300
Cr Sales taxes payable 584
-True-False 18. All types of extinguisher can use in any kinds of fire. - True False
All types of extinguisher can use in any kinds of fire.
FalseAll types of extinguishers cannot be used in any kind of fire. Let's understand this statement with an example...
Example:- Suppose that a fire has taken place due to some electrical issues. This kind of fire cannot be extinguished by water because water is a good conductor of electricity...~Bistrol Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 15,700 75% Conversion costs $ 7,700 20% A total of 8,400 units were started and 7,500 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 186,300 Conversion costs $ 329,800 The ending inventory was 70% complete with respect to materials and 60% complete with respect to conversion costs. The cost per equivalent unit for materials for the month in the first processing department is closest to:
Answer:
$21.44
Explanation:
Calculation for the cost per equivalent unit for materials for the month in the first processing department
First step
Units completed and transferred out $7,500
Ending inventory($800+$8,400-$7,500)*70% Ending inventory =1,700*70%
Ending inventory =$1,190
Equivalent units for Materials $8,690
($7,500+$1,190)
Total materials costs $186,300
Second step
Cost per equivalent unit for materials=Total materials costs÷ Equivalent units for Materials
Cost per Equivalent unit for Materials $186,300÷$8,690
Cost per Equivalent unit for Materials=$21.44
Therefore the cost per equivalent unit for materials for the month in the first processing department is closest to $21.44
Identify each of the following statements about linear programming problems as true or false, and then justify your answer.
a. For minimization problems, if the objective function evaluated at a CPF solution is no larger than its value at every adjacent CPF solution, then that solution is optimal.
b. Only CPF solutions can be optimal, so the number of optimal solutions cannot exceed the number of CPF solutions.
c. If multiple optimal solutions exist, then an optimal CPF solu-tion may have an adjacent CPF solution that also in optimal.
Answer and Explanation:
a. The given statement is true as the corner point at the objective function should be feasible solution which is no longer as compared with the value for every adjacent CPF solution as compared with its optimal
b. The given statement is false as the solution can be an edge
c. The given statement is true as it shows the direct relation between the two things
Kelly Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs: Costs: Wages and salaries $ 360,000 Depreciation 200,000 Occupancy 100,000 Total $ 660,000 The distribution of resource consumption across the three activity cost pools is given below: Activity Cost Pools Total Fabricating Order Processing Other Wages and salaries 15% 60% 25% 100% Depreciation 20% 35% 45% 100% Occupancy 25% 50% 25% 100% How much cost, in total, would be allocated in the first-stage allocation to the Order Processing activity cost pool
Answer:
$336,000
Explanation:
Calculation for How much cost that would be allocated in the first-stage allocation to the Order Processing activity cost pool
Total Order Processing activity cost pool
Wages and salaries: 60% × $360,000
Wages and salaries= $216,000
Depreciation: 35% × $200,000
Depreciation=$70,000
Occupancy : 50% × $100,000
Occupancy=$50,000
TOTAL =$336,000
Therefore the amount of cost that would be allocated in the first-stage allocation to the Order Processing activity cost pool will be $336,000
The following balance sheet for the Hubbard Corporation was prepared by the company:
Buildings $766,000
Land 298,000
Cash 76,000
Accounts receivable (net) 152,000
Inventory 272,000
Machinery 296,000
Patent (net) 116,000
Investment in equity securities 92,000
Total assets $2,068,000
Liabilities and Shareholders' Equity
Accounts payable $231,000
Accumulated depreciation 271,000
Notes payable 532,000
Appreciation of inventory 96,000
Common stock (authorized and issued
116,000 shares of no par stock) 464,000
Retained earnings 474,000
Total liabilities and shareholders' equity $2,068,000
Additional information:
a. The buildings, land, and machinery are all stated at cost except for a parcel of land that the company is holding for future sale. The land originally cost $68,000 but, due to a significant increase in market value, is listed at $156,000. The increase in the land account was credited to
retained earnings.
b. Marketable equity securities consist of stocks of other corporations and are recorded at cost, $38,000 of which will be sold in the coming year. The remainder will be held indefinitely.
c. Notes payable are all long-term. However, a $280,000 note requires an installment payment of $70,000 due in the coming year.
d. Inventories are recorded at current resale value. The original cost of the inventories is $178,000
Required:
Prepare a corrected classified balance sheet for the Hubbard Corporation at December 31, 2018.
Answer:
Please find attached classified balance sheet as requested
Explanation:
Please find attached balance sheet for HUBBARD CORPORATION
Which of Graeter’s stakeholders are most affected by the family’s decision to take a long-term view of the business rather than aiming for short-term profit?
Answer:
Employees, owner of the business and investors
Explanation:
Family decisions are biased and they can change business decision over the course of period. In the above scenario, graters family has decided to take a long term view of the business rather than short term profit will greatly affect the employees, owner of the business and investors. Family decisions can affect a stakeholder that is why it is recommended that family and business should remain apart.
The CPI for this year was reported at 163.65. If inflation was 3.1 percent, what must the CPI have been last year
The consumer price index last year must have been 158.58.
What was the consumer price index last year?
The consumer price index is used to measure inflation. It does this by measuring the changes in the price of a basket of good.
CPI = (cost of basket of goods in current period / cost of basket of goods in base period) x 100
CPI last year = (100 - 3.1) x 163.65 = 158.58
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On Monday, Mr. Jones noticed that several employees were avoiding eating meat at lunch, and they told him they were vegetarians. By Friday, Mr. Jones had eliminated all meat from the cafeteria and only served vegetarian meals to accommodate his employees' needs. Mr. Jones was demonstrating
Assuming Mr. Jones had eliminated all meat from the cafeteria, Mr. Jones was demonstrating: Representative bias.
What is representative bias?Representative bias can be defined as the tendency or probabiliity that an event that occur will likely repeat itself by evaluating or assessing similar event.
Based on the scenario Mr Jones is using representative bias which is why he eliminated or removed all meat and only served vegetarian.
Inconclusion Jones was demonstrating: Representative bias.
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Tells us why you would be a great team member and what sets you apart from other candidates
Sorry but you need to answer this one bud. I would help you if I could but I don't know what makes you, well you. :)
Faz, Inc., manufactures and sells two products: Product X0 and Product W7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours
Product X0 2,000 4 8,000
Product W7 440 3 1,320
Total direct labor-hours 9,320
The direct labor rate is $38.60 per DLH. The direct materials cost per unit is $163.50 for Product X0 and $145 for Product W7. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Expected Activity
Activity Cost Pools Activity Measures Estimated Overhead Cost Product X0 Product W7 Total
Labor-related DLHs $276,078 8,000 1,320 9,320
Production orders orders 19,348 540 740 1,280
Order size MHs 241,614 4,040 4,140 8,180
$537,040
If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product XO would be closest to: ________
Answer:
$230.49
Explanation:
To compute the overhead assigned to each unit of product XO, we would first determine the overhead rate, which is shown below;
Overhead rate = Total manufacturing overhead / Total direct labor hours
= $537,040 / 9,320
= $57.62 per hour rate.
Therefore, the overhead allocated amount would be ;
= Overhead rate × Direct labor hours per unit of product X0
= $57.62 × 4
= $230.49
what is growth-centric development in economics?
Answer:
A growing economy is typically considered to be primary measure of the well-being of a country, and the main goal for development. The term economic growth refers to an increase in output production of goods and services over time.
Explanation:
Please mark at brain least.
1. Accounts Receivable. At year-end, the L. Cole Company has completed services of $20,500 for a client, but the client has not yet been billed for those services.
2. Interest Receivable. At year-end, the company has earned, but not yet recorded, $450 of interest earned from its investments in government bonds.
3. Accounts Receivable. A painting company bills customers when jobs are complete. The work for one job is now complete. The customer has not yet been billed for the $1,420 of work.
Required:
a. Determine what the current account balance equals.
b. Determine what the current account balance should equal.
c. Record an adjusting entry to get from a to b. Assume no other adjusting entries are made during the year.
Answer:
a. What the current balance in Accounts Receivable equals is to $0. The Current actual balance in Account receivable should equal the amount of service revenue earned but not received by the company. Hence, the balance should be $20,500
Adjusting Entries Debit Credit
Account receivable $20,500
Earned service revenues $20,500
(Revenue from services rendered to clients but not received
b. What the current balance in Interest Receivable equals to is $0. The current actual balance in Account receivable should equal the amount of Interest revenue earned but not received by the company. Hence, the balance should be $450
Adjusting Entries Debit Credit
Interest receivable $450
Interest revenue $450
c. What the current balance in Accounts Receivable equals to is $0. The current actual balance in Account receivable should equal the amount of service revenue earned but not received by the company. Hence, the balance should be $1,450
Adjusting Entries Debit Credit
Account receivable $1,450
Earned service revenues $1,450
(Revenue from services rendered to clients but not received recorded)
g The local Target store sells a variety of Dyson vacuum cleaners. A particularly popular model is the DC22, which costs Target $275 per unit. The annual holding cost per vacuum is 10% of this cost. Demand for the DC22 is relatively constant, but experiences some fluctuations from day to day. Average daily demand for the DC22 is normally distributed with an average of 5 units and a standard deviation of 2 units (and Target is open 365 days a year). When Target places an order of DC22s from its warehouse, the order arrives 3 days later. The fixed ordering cost is $10, regardless of how many DC22s are ordered. Target is willing to tolerate a 1% chance of stockout on any one order cycle. If Target decreases its tolerance for stockouts, how will this affect the inventory policy
Answer:
Something isn't right about this question, since Target's tolerance for stock-outs is already 1%, by how much can they decrease it? The question should probably say that they will increase their tolerance for stock-outs, e.g. from 1% to 5% or 10%.
currently, Target's safety stock is:
safety stock = z-score 99% x √lead time x standard deviation of demand
safety stock = 2.576 x √3 x 2 = 8.92 units ≈ 9 units
the reorder point = lead time demand + safety stock
lead time demand = 3 days x 5 = 15 units
reorder point = 15 + 9 = 24 units
Having a large safety stock and a high reorder point increases holding costs and may also increase the total number of orders placed per year.
If the tolerance for stock-outs increases to 5%, then the new safety stock is:
safety stock = z-score 95% x √lead time x standard deviation of demand
safety stock = 1.96 x √3 x 2 = 6.8 units ≈ 7 units
the reorder point will also decrease to 15 + 7 = 22 units
If the tolerance for stock-outs increases to 10%, then the new safety stock is:
safety stock = z-score 90% x √lead time x standard deviation of demand
safety stock = 1.645 x √3 x 2 = 5.7 units ≈ 6 units
the reorder point will also decrease to 15 + 6 = 21 units
The higher the tolerance for stock-outs, the lower the safety stock and reorder point, which in turn reduces carrying costs ($27.50 for every unit) and total number of orders ($10 per order).
If indeed, the question was properly written, then if target decreases its tolerance for stock-outs, the safety stock needed for a 0.5% tolerance is:
safety stock = z-score 99.5% x √lead time x standard deviation of demand
safety stock = 2.807 x √3 x 2 = 9.7 units ≈ 10 units
reorder point = 25 units
if the tolerance decreases to 0.01%:
safety stock = z-score 99.99% x √lead time x standard deviation of demand
safety stock = 3.891 x √3 x 2 = 13.4 units ≈ 13 units
reorder point = 28 units
The higher the safety stock and reorder point, the higher the carrying costs, more orders will be placed and the order costs will also be higher.
John Gardner is the city planner in a medium-sized southeastern city. The city is considering a proposal to award an exclusive contract to Clear Vision, Inc., a cable television carrier. Mr. Gardner has discovered that an economic planner hired a year before has generated the functions given below: P = 28 - 0.0008Q MC = 0.0012Q where Q = the number of cable subscribers and P = the price of basic monthly cable service. a. b. c. What price and quantity would be expected if the firm is allowed to operate completely unregulated? Mr. Gardner has asked you to recommend a price and quantity that would be socially efficient. Recommend a price and quantity to Mr. Gardner using economic theory to justify your answer. Compare the economic efficiency implications of (a) and (b) above.
Answer:
Monopoly
P = $20.00
Q = 10,000
Socically Efficient:
P = $16.80
Q = 14,000
The monopoly generates a deadthweight loss to maximize their gain.
In the socially efficient situation, there is no deadthweight loss threfore this makes the economy as a whole better.
Explanation:
Price = 28 - 0.0008Q
Marginal Cost = 0.0012Q
Revenue: P x Q = (28 - 0.0008Q) x Q = 28Q - 0.0008Q²
Marginal Revenue:
R' = R(q) / dq = 28 -0.0016Q
We want to produce and sale until marginal revenue matches marginal cost:
28 -0.0016Q = 0.0012Q
28 = 0.0028Q
Q = 28 / 0.0028 = 10,000
P = 28 - 0.0008 (10,000) =
P = 28 - 8 = 20.00
The social efficiency will be that Price equals Marginal Cost.
28 - 0.008Q = 0.0012Q
28 = 0.0020Q
28 / 0.0020 = Q = 14,000
P = 28 - 0.0008(14,000) = 28 - 11.2 = 16,8
Describe how the data protection act affects the storage of customer information?
Answer:
It governs the holding and processing of personal data
The way the Data Protection Act affects the storage of customer information is by ensuring compliance with the existing rules and regulations.
What is Data Protection?Data Protection refers to the governance concerning the holding and processing of personal data. It involves the processes taken to prevent stored data from:
Misused by third partiesTransmitted without consentFraudulent usage, e.g. phishing scams and identity theft.Compliance with the Data Protection Act ensures that the storage of customer information achieves the following:
Stored for a fair and lawful purpose.Only adequate and relevant data should be stored.Stored data must be updated regularly.Stored data must be kept secure.Data should not be kept longer than necessary.Thus, the way the Data Protection Act affects the storage of customer information is by ensuring compliance with the existing rules and regulations.
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In his book, The Art of the Long View, Peter Schwartz identified the process of constructing multiple stories of what could happen next as an important step for companies to take. What was the author referring to?
Author Peter Schwartz in his book "The Art of the Long View" referred to scenarios, when identifying the process of building stories that could happen and following an important step for companies.
What is the purpose of the book?The author creates a scenario approach to assist in the development of the strategic vision, through the analysis of possibilities that help to create a broad and systematic vision in the decision-making process.
Therefore, the strategic vision is essential for every organization, as it helps in making more effective decisions to deal with different situations and inherent risks of the internal and external environment, making the business more positioned and competitive in the market.
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Gridley Company issued $800,000, 11%, 10-year bonds on December 31, 2019, for $730,000. Interest is payable annually on December 31. Gridley Company uses the straight-line method to amortize bond premium or discount. Prepare entries to record issuance of bonds, payment of interest, amortization of discount, and redemption at maturity. Instructions Prepare the journal entries to record the following. a. The issuance of the bonds. b. The payment of interest and the discount amortization on December 31, 2020. c. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.
Answer:
Gridley Company
Journal Entries:
a. The issuance of the bonds.
December 31, 2019:
Debit Cash Account $730,000
Debit Bonds Discount $70,000
Credit Bonds Payable $800,000
To record the issuance of 10-year bonds at 11%.
b. The payment of interest and the discount amortization on December 31, 2020.
Debit Interest Expense $88,000
Credit Cash Account $88,000
To record the payment of interest.
Debit Amortization Expense $7,000
Credit Bonds Discount $7,000
To record amortization of discount.
c. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.
Debit Bonds Payable $800,000
Credit Cash Account $800,000
To record the redemption of the bonds at maturity.
Explanation:
a) Data and Calculations:
Bonds issued (face value) = $800,000
Cash Receipt (Discounted value) = $730,000
Discount value = $70,000
Bonds' duration = 10 years
Amortization of Discount = $7,000 ($70,000/10) under the straight-line method.
Interest rate = 11% annually ($88,000)
Joshua needed money for some unexpected expenses, so he borrowed $5,355.26 from a friend and agreed to repay the loan in seven equal installments of $1,100 at the end of each year. The agreement is offering an implied interest rate of _________
Joshuaâs friend, Willie, has hired a financial planner for advice on retirement. Considering Willieâs current expenses and expected future lifestyle changes, the financial planner has stated that once Willie crosses a threshold of $1,387,311 in savings, he will have enough money for retirement. Willie has nothing saved for his retirement yet, so he plans to start depositing $25,000 in a retirement fund at a fixed rate of 6.00% at the end of each year. It will take____________for Willie to reach his retirement goal.
Answer:
10%
25.14 years
Explanation:
A financial calculator can be used to solve these problems
PMT = $-1,100
PV = $5,355.26
FV = 0
N = 7
Compute I = 10%
PMT = $-25,000
FV = $1,387,311
I = 6%
PV = 0
Compute N = 25.14 years
Galvanized Products is considering the purchase of a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $100,000. Galvanized Products is planning to borrow 1/4th of the purchase price from a bank at 15% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,000 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $25,000 per year to maintain the system but will save $55,000 per year through increased efficiencies. Galvanized Products uses a MARR of 18%/year to evaluate investments.
What is the future worth of this investment?
Answer and Explanation:
Please find attached
Calculate the price elasticity of demand for the price range of $9 to $10 & $10 to $15 for movie tickets for on D1. Show all work & formulas. Explain if the range is elastic, inelastic, or unit elastic for each demand curve. Tell me if total revenue would rise, fall, or stay the same for the range given.
The price elasticity of demand is used to determine how the price of the movie ticket changes with demand
The price range of $9 to $10 is inelastic and the total revenue would fallThe price range of $10 to $15 is inelastic and the total revenue would fallHow to determine the price elasticity of demandThe price elasticity (E) of demand is calculated using:
[tex]E = \frac{(Q_f -Q_i)/(Q_f +Q_i)}{(P_f -P_i)/(P_f +P_i)}[/tex]
The question is incomplete, as the change in the quantity demanded is not given.
Assume the change is from 125 to 130 for the price range of $9 to $10.
The equation becomes
[tex]E = \frac{(130 -125)/(130 +125)}{(10 -9)/(10 +9)}[/tex]
[tex]E = \frac{(5)/(255)}{(1)/(19)}[/tex]
Evaluate
[tex]E = 0.37[/tex]
The price elasticity of demand is less than 1.
Hence, the range is inelastic and the total revenue would fall
Using the same range for price range of $10 to $15, we have:
[tex]E = \frac{(130 -125)/(130 +125)}{(15 -10)/(15 +10)}[/tex]
[tex]E = \frac{(5)/(255)}{(5)/(25)}[/tex]
[tex]E = 0.09[/tex]
The price elasticity of demand is less than 1.
Hence, the range is inelastic and the total revenue would fall
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What is trial balance
Answer:
A trial balance is a list of all the general ledger accounts contained in the ledger of a business. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nominal ledger account will hold either a debit balance or a credit balance. What a trial balance is?A trial balance is a bookkeeping worksheet in which the balance of all ledgers are compiled into debit and credit account column totals that are equal. A company prepares a trial balance periodically, usually at the end of every reporting period.Explanation:
#BrainliestBunchwhat message is this price tag telling shoppers? (other than it is on sale)
Answer: it says that but you can try to let them give it to you for 7 if they say it's 9 just damage the box a little for a discount
Explanation:
Question Workspace Copyrights in Digital Information When she was in college, Kiersten Walburg wrote a case study on Grokster, an online peer-to-peer (P2P) file-sharing network, and knew that it was shut down because its services were illegal. Several years later, Montgomery Records, Inc., which owned the copyrights to a large number of music recordings, discovered that "tereastarr", a user name associated with Walburg's Internet protocol address, had made twenty-four songs available for distribution on another P2P network. Montgomery notified Walburg that she had been identified as engaging in the unauthorized trading of music. She replaced the hard drive on her computer with a new drive that did not contain the songs in dispute. Is Walburg liable for copyright infringement? 1. Making material available on a P2P network or through the cloud is called
Answer:
file sharing.
Explanation:
1. it is is called:
File sharing
file sharing can be defined as the act of distributing digital media to other parties. such digital media can be programs, multitimedia files like music and video, or even electronic books. file sharing could be prohibited in some cases but not always prohibited. files can be shared with peers except when it is stated otherwise. then it is good that you do not share the files to avoid infringement of copyright laws of the owner of the file.
how to write
market analysis for a event planning business
Answer:
In a recent article we discussed the importance of the role that an effective executive summary plays in a business plan. This article will address another critical component of any business plan — the market analysis.
Conducting a market analysis is an essential process for anyone looking to start a successful business.
The market analysis portion of your business plan should communicate your profound knowledge of your particular market, and provide an explanation of why that market is enticing from a financial perspective.
What is a Market Analysis?
A market analysis consists of the combination of quantitative and qualitative assessments of a given market.
A thorough market analysis will convey insights derived from investigating the size of the market in both volume and value, the customer segments that comprise the market, the buying habits that these consumers exhibit, competitors, and any barriers to entry. We’ll go into detail on barriers to entry later on in this article.
The purpose of the market analysis section of a business plan is to prove to stakeholders such as potential investors that you know your market thoroughly, and that there is viable opportunity for a sustainable business venture.
How to Perform a Market Analysis
Step #1: Determine Market Size
The first step in performing a market analysis is to assess the size of the market.
While doing so, your approach will depend on the scale of your potential business. For example, if you’re looking to open a local coffee shop then you should take a local approach to assessing your market.
Contrastly, if your business plan is proposing a nationwide chain of coffee shops, then you need to assess your market at a national scale.
While determining market size, you must look at both volume and value. Volume refers to the number of potential customers, and value refers to the value of the market itself.
Determining market value can be a challenge. One approach is to see if the figure is publicly available, perhaps shared by a government entity. Other approaches include buying a market research report, or simply estimating the figure yourself.
Step #2: Conduct Market Segmentation
If your proposed business will target certain market segments, then you should segment the market to understand it further.
A best practice to start market segmentation is to examine the market from a demographic perspective. This provides surface level insights that can help you determine where next to drill into.
Other segmentation methods that you can use as they pertain to the business’ products and services include geographic segmentation, behavioral segmentation, and psychographic segmentation.
You can even use these various methods of segmentation in tandem!
Step #3: Define Your Target Market
A target market is comprised of the customers that you will focus on within the market.
For example, if you were thinking about opening a coffee shop, you could decide to either be a generalist — selling standard, affordable coffee drinks — or you could choose to focus on high-end, expensive gourmet coffee instead.
Each of these examples would appeal to different market segments, and the approach to connecting with the relevant target market would be different despite having a similar core product (coffee).
Defining your target market is most important when your market has obvious segments that have differing drivers of demand.
Step #4: Define The Market Need
Now we are moving on to the more qualitative assessment of the market by defining the market need.
While defining the market need, you should go into detail on the drivers of demand for your product. Why will people buy your product? What problem is it solving? How is it different from what is already in market? Why should this market purchase from your company specifically?
It helps here to be exhaustive about researching existing competition in the market and their relevant strengths and weaknesses. This will inform your market positioning, which should be thoroughly addressed later on in your business plan.
The market need can often be derived from looking at the efforts of competitors, and drilling down into the areas that they are not focusing on, or areas that you can provide better value than what they offer.
Step #5: Outline Barriers to Entry
In this section of your market analysis, you should answer two questions that investors always ask:
What factors prevent someone from opening a competing shop in proximity to yours and taking 50 percent of your business?
What factors do you think will make you successful while entering this market?
Simply put, barriers to entry protect your business from new competition.
Examples of barriers to entry include:
Brand — the costs required to obtain a certain level of recognition
Location
Regulation
Access to resources — such as suppliers and third-party vendors
Technology
Investment
Access to distribution channels
Conclusion
What area of expense is best to target when looking for possible ways to cut back on spending
Answer:
If we are talking about corporate spending, then it's best to cut overhead costs, because direct labor or direct materials are harder to cut since a cut in these areas would cause a reduction in output production.
If we are talking about personal spending, then, it's best to cut sumptuary expenses like eating out, or taking expensive vacations. Utilities, rent, and debt are harder to cut.
Chin needs more money in his net pay each month, so he plans to reduce his federal income tax deduction from 12% to 11%. His monthly gross pay is $3,500, and his deductions before the change are listed in the table.
Deduction
Dollar Amount
Federal Income Tax
$420
State Income Tax
$95
Social Security
$89
Medicare
$40
What will be his new monthly net pay? Round your answer to the nearest dollar.
$2821
$2857
$2860
$2891
Answer:
$2891
Explanation:
If chine reduces his federal income deductions from 12% to 11%, the new federal income tax will be as below.
11% of $3500
= 11/100 x 3500
=0.11 x 3500
=$385.
Total deductions after this change will be
=$385 + $95 + $89 + $40
=$609
Net pay
=$3500- $609
=$2,891
Answer:
D
Explanation:
just took test
Henrietta, the owner of a very successful hotel chain in the Southeast, is exploring the possibility of expanding the chain into a city in the Northeast. She incurs $42,500 of expenses associated with this investigation. Based on the regulatory environment for hotels in the city, she decides not to expand. During the year, she also investigates opening a restaurant that will be part of a national restaurant chain. Her expenses for this are $50,600. She proceeds with opening the restaurant, and it begins operations on May 1.
Required:
Determine the amount that Nancy can deduct in the current year for investigating these two businesses. In your computation, round the per-month amount to the nearest dollar and use rounded amount in subsequent computations. If required, round your final answers to the nearest dollar.
Answer:
Total deduction for the year = $48,956
Explanation:
You can deduct investigation expenses but only for new business that is in the same industry as your current business. In this case, Henrietta incurred in $42,500 expenses trying to expand her hotel business. Total deduction for the current year = $42,500.
If the investigation expenses are not related to your current business, e.g. restaurants, then you can capitalize the costs and amortize them only if you actually carried out the expansion.
You can deduct up to $5,000 during the first year but this amount decreases by $1 for every dollar above $50,000. Total immediate deduction = $4,400. The remaining $46,200 must be amortized over 180 months. Amortization per month = $46,200 / 180 = $257
Total amortization for year 1 = 8 months x $257 = $2,056
Total deduction for the year = $42,500 + $4,400 + $2,056 = $48,956
TRUE OR FALSE - ACCOUNTING
1. The book value of a fixed asset reported on the balance sheet represents its market value.
2. Straight line depreciation is computed by dividing the depreciable cost by the estimated useful life.
3. When the company uses a perpetual inventory system it always knows how much inventory it has available to sell.
4. The matching principle requires expenses be recorded in the same period that the related revenue is recorded.
You are provided with the following information for Lazuris Enterprises, effective as of its April 30, 2022, year-end.
Accounts payable $ 834
Accounts receivable 810
Accumulated depreciation—equipment 670
Cash 1,270
Common stock 16,900
Cost of goods sold 1,060
Depreciation expense 335
Dividends 325
Equipment 2,420
Goodwill 1,800
Income tax expense 165
Income taxes payable 135
Insurance expense 210
Interest expense 400
Inventory 967
Investment in land 14,200
Land 3,100
Mortgage payable (long-term) 3,500
Notes payable (short-term) 61
Prepaid insurance 60
Retained earnings (beginning) 1,600
Salaries and wages expense 700
Salaries and wages payable 222
Sales revenue 5,100
Stock investments (short-term) 1,200
Instructions:a. Prepare an income statement and a retained earnings statement for Lazuris Enterprises for the year ended April 30, 2022.Net income $2,230b. Prepare a classified balance sheet for Lazuris Enterprises as of April 30, 2022.Tot. current assets $4,307Tot. assets $25,157
Answer:
Please see below
Explanation:
Please find attached detailed solution for the above question - Income statement , retained earnings and balance sheet for Lazuris Enterprises.