what input do both absolute valuation and relative valuation typically require? Namely, some percentage change in price causes an equal percentage change in quantity demanded (Qd) and therefore, no effect on total revenues. Place the following items in order to create the equation used to calculate the variable expense ratio using total values. Adjustable Rate Mortgage: How they Work, Pros and Cons. With an ARM, your monthly payment may change frequently over the life of the loan. Study with Quizlet and memorize flashcards containing terms like What lists can be imported from Excel spreadsheets, when setting up a QuickBooks online company?, Which of the following is TRUE regarding your chart of accounts, when setting up a new QuickBooks company?, What company information does QuickBooks ask for when you first create a new QuickBooks Based on the following information, determine the amount of equipment on the balance sheet. A graduated payment mortgage (GPM) is a type of mortgage for which the payment increases from a low initial rate to a higher rate. True False, A public good: is characterized by rivalry and excludability. For an adjustable-rate mortgage (ARM), what are the index and margin, and how do they work?, Consumer Financial Protection Bureau. When the end-of-period spreadsheet is complete, the adjustment columns should have. Can we infer from the data that there are differences between the seven political viewpoints in their answer to the question? On January 31, it is determined that $600 supplies are remaining. One thing is for sure: Dont go with the ARM because you think the lower monthly payment is theonlyway to afford that dream house. To achieve a target profit of $930,000, Sniffles' sales rounded to the nearest dollar must be: Pete's Putters sells each putter for $125. c. Fixed-rate loans are preferable when interest rates are expected to fall. The interpretation of the cost equation for a support department is: Which of the following statements is true if a by-product can be sold and a company credits "Other Income" by its sale? B. The underbanked represented 14% of U.S. households, or 18. Which of the following allocation methods is used by Zigma to allocate the joint costs of cultivating rice? Suppose that twin $2$ waits until turning $40$ to begin investing. Fixed-rate loans are preferable when interest rates are expected to rise. The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as month or year is called a(n), assets, liabilities, owner's equity, revenues, and expenses, The post-closing trial balance will include. Why is it important to me?, Debt.org. Run Like the Wind sells ceiling fans. a. **Describing** What aspects of the economy do communist governments control. Company A sold 200,000 units. Candle Central has $1,440 of total variable expense for a sales level of 600 units and $2,160 of total variable expense for a sales level of 900 units. They are usually fixed for at least a year and mean that a business will pay the same amount each week, month or year. Traditional lending institutions offer fixed-rate mortgages for a variety of terms, the most common of which are 30, 20, and 15 years. We also reference original research from other reputable publishers where appropriate. 3. The number of unit sales needed to earn a target profit of $200,800 is: Shonda's Shoes sell for $95 per pair. While thatdoesnt include the vast majority of Americans, there are situations in which it may be possible to pull it off. To qualify for a subsidized Stafford loan, you must: Credit unions lend money to qualified people who are: Which of the following is recommended if you loan money to a friend or relative? In what direction are interest rates heading, and do you anticipate that trend to continue. _____ loans do not have to be repaid until after you graduate from college. Prepaid insurance is reported on the balance sheet as a, Accrued expenses are ordinarily reported on the balance sheet as, Accounts payable would appear on the balance sheet as a(n), Accumulated Depreciation and Depreciation Expense are classified, respectively, as, If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a(n). Study with Quizlet and memorize flashcards containing terms like 10) Three of the four types of processes are: A) goods, services, and hybrids. In allocating the cost of a support department, single charging rate: The allocation bases to determine charging rates at the beginning of a year on the basis of budgeted usage permits: The need for support department cost allocation is virtually being eliminated due to: Which of the following statements is true about the direct method of allocation? These costs are dependent on how much the business produces or sells. Which of the following is true of the cost of transferred-in material? This is then the rate until the next reset, which may be the following year. The company's fixed costs are $305,000. which of the accounts below would be closed by posting a debit to the account? Although the amount ofprincipalandinterestpaid each month varies from payment to payment, the total payment remains the same, which makes budgeting easy for homeowners.. If Candle Central sells 500 units: (select all that apply), Terry's Trees has reached its break-even point and has calculated its contribution margin ratio to be 70%. \hline \text { Textbook } & \$ 45.50 & \$ 21.35 & \\ How many units does JVL have to sell to BREAK-EVEN? Randomly listed below are the steps to preparing a Trial Balance: The process of transferring data from the journal to the ledger accounts is called, according to the steps of the accounting cycle in what order should the trial balance be prepare, The ____________ is where a transaction can first be found in the accounting records, The process of transferring debits and credits from the journal entries to the account ledger is called. _____ are variables or activities within a producing department that provoke the incurrence of support costs. If you plan to move before the five-year ARM resets, you are going to save a lot of money on interest. Each doll's variable cost was $19. a. The contribution margin per unit is $32 and fixed costs total $120,000. B) manual, automated, and service. b. When an increase or decrease in price does not change total revenue, demand is unit elastic. Which of the accounts below would not appear in the balance sheet columns of the end-of-period spreadsheet? Total liabilities and owner's equity equals $44,750; total current assets equals $19,800; land equals $15,000; and accumulated depreciationequipment equals $1,550. The rice grain receives 75 percent of the joint cost and the hay receives 25 percent. The type of account and normal balance of Prepaid Insurance is. Borrowers faced sticker shock when theirARMsadjusted, and their payments skyrocketed. A. defeat the competition. A company's break-even point is 17,000 units. Which of the following accounts should be closed to the capital account at the end of the year? Adjustable-Rate Mortgages Overview., Freddie Mac. Study with Quizlet and memorize flashcards containing terms like The marginal cost to produce an additional copy of a software product is effectively zero., With the advent of cloud computing and SaaS, smaller firms no longer have access to the kinds of sophisticated computing power they had access to in the past., The cost of producing an additional unit of a product is known (For more, see Understanding the Mortgage Payment Structure. Theinitial interest rateon an adjustable-rate mortgage (ARM) is setbelow the marketrate on a comparable fixed-rate loan, and then the rate rises (or possibly lowers) as time goes on. Which of the following is not an essential part of the accounting records? Costs are split into three main categories, fixed, variable, and total costs. If the contribution margin is $22 per unit and 26,000 units are sold, net operating profit will be: Profit = (selling price per unit x quantity sold) - (variable expense per _________ x quantity sold) - _________ expenses. What is the ability-to-repay rule? What Are the Main Types of Mortgage Lenders? Place the following items in the order in which sales dollars are applied on a contribution margin income statement: Sniffles, Inc. produces facial tissues. Study with Quizlet and memorize flashcards containing terms like A multinational enterprise is a firm that engages in foreign direct investment by directly investing in, controlling, and managing value-added activities in other countries T/F, The term "emerging markets" refers to all markets other than the developed markets T/F, GDP is the sum of value added by resident firms, What does the release of earnings announcements have in common with the release of economic indicators? Here are some concepts borrowers need to know before selecting an ARM: The biggest advantage of an ARM is that it is considerably cheaper than afixed-rate mortgage, at least for the first three, five, or seven years. While you may be able to afford to make accelerated payments now, if you get sick, lose your job, or the boiler goes, that may no longer be an option. It serves as a source document for transferring costs from the work-in-process account of a prior department to the work-in-process account of a subsequent department. b. change in cost resulting specifically from the decision. and more. Thus, the higher the liquidity ratios, the less liquidity risk a firm has. If interest rates are high and expected to fall, an ARM will ensure that you get to take advantage of the drop, as youre not locked into a particular rate. If each fan's contribution margin is $32 and fixed costs total $222,640, the number of fans required to meet the company's goal is: Contribution margin divided by sales is the formula for ___________ ___________ ____________. Daisy's Dolls sold 30,000 dolls this year for $40 each. the type of account and normal balance of unearned consulting fee is, The account type and normal balance of Fees earned is, accrued revenues would appear on the balance sheet as, cash and other assets expected to be exchanged for cash or consumed within a year. Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid expense. read more. The rice milling process of Zigma Enterprises yields 6,000 pounds of rice grain and 2,000 pounds of hay. which of the following statements is true? The fundamental goal of marketers when creating goods, services, or combinations of both, is to: This would be recommended when: Which of the following loan sources is the most expensive? a) making the assumptions upon which to project future performance, what is a reason one discounts future cash flows as part of the absolute valuation process. In another scenario, if you expect to start receiving money from atrustat a certain age, you could get an ARM that resets in the same year. Deciding what marketing strategy to use. Widget CO has a market capitalization of $100M. D. dividends paid minus net new equity raised. Applying to Mortgage Lenders: How Many Are Necessary? b) the estimated growth can be dramatically wrong. The fixed-rate period can vary significantlyanywhere from one month to 10 years; shorter adjustment periods generally carry lower initial interest rates. The monthly payments for shorter-term mortgages are higher so that the principal is repaid in a shorter time frame. Taking out an adjustable-rate mortgage is very attractive tomortgage borrowers who have, or will have, thecashto pay off the loan before the new interest rate kicks in. Which of the following forms is used to identify direct materials, quantity and prices, and work order numbers? But liquid assets generate little, if any, profits for the firm. The trials are independent, meaning that the outcome of one trial does not affect the outcome of any other trial. previous To reach a target profit of $180,000, 90,000 units need to be sold. d) a stocks P/E ratio can remain above or below market average for extended periods. What is the current yield, to the nearest tenth percent, on a $500, 9% bond Generally accepted accounting principles require that companies use the ____ of accounting. Adjustable Rate Mortgage: How they Work, Pros and Cons.. Variable costs are $4 per unit and fixed costs total $30,000. (For more, seeAdjustable Rate Mortgage: What Happens When Interest Rates Go Up. A cost is anything that a business has to pay for. A borrower who chooses an ARM may save several hundred dollars a month for up to seven years, after which their costs are likely to rise. Which of the following is true of a production report? \hline \text { Item } & {\text { Selling Price }} & {\text { Cost }} & {\text { Markup }} \\ You may get a similar rate at the time of reset, but it is a serious gamble. Suppose a government study estimated that the probability of successive generations of a rural family remaining in a rural area was $0.7$ and the probability of successive generations of an urban family remaining in an urban area was $0.9$. b. Study with Quizlet and memorize flashcards containing terms like Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. D. stimulate short-term sales. The balance of the owner's drawing account on the adjusted trial balance of the end-of-period spreadsheet is reported on which of the following financial statements? C. dividends paid plus the change in retained earnings. Luke Chapter 9. Company X was expected to have earnings per share of the results, the company reported earnings per share of $0.83. Current assets divided by current liabilities. Based on the following information, determine the amount of equipment on the balance sheet. Which of the following is true of consumer finance companies? Lance's profit is $__________. However, if you expect to see an increase in your income, going with an ARM could save you from paying a lot of interest over the long haul. Individualspersonal financesoften experience periods of advance and decline, interest rates rise and fall, and the strength of theeconomywaxes and wanes. X Close Suppose that twin $1$ invests $\$ 2000$ at the end of each year for $10$ years only (until age $33$) in an account that earns $8 \%$ compounded annually. The two categories of completed units needed in the first-in-first-out (FIFO) method are: In the weighted average costing method, prior-period output and manufacturing costs found in beginning work in process are: Which of the following is a disadvantage of the weighted average costing method? total fixed cost, total variable cost, and total cost respectively. The impact of this change on total contribution margin would be a(n) ___________ (increase/decrease) of $__________. Study with Quizlet and memorize flashcards containing terms like When critics of unemployment insurance claim that some of the unemployed are not exerting much effort to find jobs because of the unemployment benefits, they are referring to the moral hazard problem. As mentioned earlier, the fixed-rate period of an ARM varies, typically from one year to seven years, which is why an ARM might not make sense for people who plan to keep their home for more than that. However, if you know you are going to move within a short period, or you dont plan to hold on to the house for decades to come, then an ARM is going to make a lot of sense.. Youll also get at least 4 FREE hardcopy textbook rentals (you only pay for shipping & handling). Freddie Mac Clears Path for New Index Rate., Consumer Financial Protection Bureau. Cengage Unlimited is a subscription that gives you access to all Cengage online learning platforms, plus our entire library of Cengage eTextbooks for a one-time, flat price. what is one possible weakness of this peer approach to valuation? What effect will this adjustment have on the accounting records? Fixed-rate mortgages andadjustable-rate mortgages(ARMs) are the two primarymortgagetypes. bought at 95.976? Thus, extremely high levels of liquidity guard against liquidity crises but at the cost of lower returns on assets. She is the founder and CEO of Fulfilled Finances LLC, the Social Security Presenter for AARP, and the Treasurer for the Financial Planning Association of NorCal. Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. The amount of solar energy that reaches the earths surface in one hour is more than the planets total energy requirements for a whole year. James McWhinney is a long-tenured Investopedia contributor and an expert on personal finance and investing. Know Before You Owe: Mortgage shopping study., Freddie Mac. Looking To Improve Your Website's Search Engine Optimization? - *neither nor* - *just asso* 2. A mortgage calculator can show you the impact of different rates on your monthly payment. You can learn more about the standards we follow in producing accurate, unbiased content in our, When to Buy a Home Based on Mortgage Rates. when an analyst is looking at a company for the first time, which of the following four activities does he do first? To put your loan selection into the context of these factors, consider the following questions: If you are considering an ARM, you should run the numbers to determine the worst-case scenario. The variable expenses per chair is $85.05 and the chairs sell for $189.00 each. C. operate according to government regulations. E. create value. What is the purpose of the owner capital account in the closing process? Analysing the financial performance of a business - AQA, Home Economics: Food and Nutrition (CCEA). Total costs = fixed costs + variable costs For example if a business have fixed costs of 18,500 and variable costs of 9,250 their total costs would be 18,500 + 9,250 = 27,750. produces no positive or negative Complete the sentence in a way that shows you understand the meaning of the italicized vocabulary word. $34,000 Beginning Inventory (11,000) + Net Purchases (23,000) = Cost of Goods Available for Sale (34,000) and more. which of the following assigns the same relative weightings to short-term and long-term outcomes as the absolute valuation process? Of the following steps of the accounting cycle, which step should be completed last? Consumer Financial Protection Bureau. Refer to the above diagram. a rise in which of the following inputs will increase an absolute valuation? Which of the following statements is true about the support department of an organization? The contribution margin per unit is $40. D) modular, continuous, and technological. What is the BREAK-EVEN point in unit sales? A deferred interest mortgage allows the borrower to delay paying some or all of a loans interest, resulting in smaller payments for a specified time. d. The cost of However, the trade-off for that low payment is a significantlyhigher overall cost, because the extra decade, or more, in the term is devoted primarily to paying interest. DIY Seo Software From Locustware Is Exactly What You Need! Prepare Robinns Company's responsibility income statement for the current month. (select all that apply). Cable television is a system of delivering television programming to consumers via radio frequency (RF) signals transmitted through coaxial cables, or in more recent systems, light pulses through fibre-optic cables.This contrasts with broadcast television (also known as terrestrial television), in which the television signal is transmitted over-the-air by radio waves and Our tips from experts and exam survivors will help you through. The annual percentage rate is equivalent to the stated rate of interest when the _____ is used to calculate finance charges. Coahffee. A company has reached its break-even point when the contribution margin ___________ fixed expenses. The variable cost is $60 per putter and fixed costs total $400,000. Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition. a. The Language of Composition: Reading, Writing, Rhetoric, Lawrence Scanlon, Renee H. Shea, Robin Dissin Aufses. ARMshave a fixed period of time during which the initial interest rate remains constant, after which the interest rate adjusts at a pre-arranged frequency. If a loan has a prepayment penalty, there will be _____. Read about our approach to external linking. The lists do not show all contributions to every state ballot measure, or each independent expenditure committee formed to support or These financial elements inform key decisions in every business. Fixed expenses are $240,400. Owner capital is where the period's net income or loss is transferred. Given the following Account Balances, the entry to close Capital during step one of the two step closing process would be a ______________. Accounts that report amounts for only one period. the most important output of the accounting cycle is the financial statement, which of the following financial statements reports information as of a specific date. All business have costs that need to be paid regularly. The partialamortizationschedule below demonstrates the way in which the amounts put toward principal and interest alter over the life of the mortgage. The most expensive method of calculating the dollar cost of the interest on this installment loan will be the: Sometimes it may be better to use one's savings rather than borrowing to make a purchase. Total costs are simply just fixed and variable costs for the business added together, giving the total overall costs for the business. Variable expenses/Sales is the calculation of the __________ __________ ratio. How much must twin $2$ put aside at the end of each year for the next $25$ years in an account that earns $8 \%$ compounded annually to in an account that earns $8 \%$ compounded annually to years (when they turn $65$)? Which of the following is true of fixed-rate loans? A portion of the total cost of an item, such as a car or house, that must be paid at the time of purchase. Other Quizlet sets. Investopedia requires writers to use primary sources to support their work. The posting of depreciation expense will be done during which step of the accounting cycle? Sales generated by the Standard Division totaled $\$ 1,200,000$, and its contribution margin ratio averaged 50 percent. - *not only but. When demand is unit elastic, it refers to the effect on total revenue due to changes in price. Financial terms and calculations includes revenue, costs, profits and loss, average rate of return, and break-even. Although the rate of interest is fixed, the total amount of interest youll pay depends on the mortgage term. The new rate will be based on market rates, not the initial below-market rate. Which of the following can be achieved by implementing just-in-time (JIT) manufacturing? \begin{array}{|c|c|c|c|c|} The contribution margin income statement allows users to easily judge the impact of a change in _________ on profit. The variable expense ratio for Plush & Cushy's chairs is ____________%. _____ a slave _____ a slaveholder, all people are harmed by slavery. Fixed-rate mortgages are easy to understand and vary little fromlenderto lender. Luke_Finchum Teacher. 22. "What is negative amortization? A fixed amount that you are paid over a period of time, regardless of how many hours you work. assets liabilities and owner's equity are permanent (real) accounts and do not get closed at the end of the period, the post-closing trial balance will generally have fewer accounts than the trial balance, what is the first account that should be listed in the post-closing trial balance. Its more prudent to search for a house with a smaller price tag instead. A study presented at the 2010 IEEE international Conference on Web intelligence and Intelligent Agent Technology investigated whether the volume of chatter on Twitter.com could be used to forecast the box office revenues of movies. Once the borrower has the proceeds from the sale, they can turn around to pay off the ARM with the proceeds from the home sale. Lets say the interest-rate environment means you can take out a five-year ARM with an interest rateof 3.5%. Cash flow to stockholders is defined as: A. cash flow from assets plus cash flow to creditors. It does not provide information about the manufacturing costs associated with The cost of each item in the basket and the Which of the following accounts will not be closed at the end of the accounting cycle? Adjustable-Rate Mortgage: What Happens When Interest Rates Go Up. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. $$. How large a mortgage payment can you afford today? In contrast, fixed assets are illiquid, but generate revenue for the firm. Chapter 21 Test. It does a 10-for-1 stock split. Which of the following accounts will be closed with a debit? Finally, it does a 35-for-1 stock split. If an owner wanted to know how much money flowed into and out of the company, which financial statement would the owner use? The balance of the accumulated depreciation account on the adjusted trial balance of the end-of-period spreadsheet would be reported on which of the following financial statements? The annual accounting period adopted by a business. How will the following adjusting journal entry affect the accounting equation? The cost of borrowing fixed-rate loans increases with an increase in the market interest rate. the "fixed cost" (the one-time front-end load) is spread over a greater number of years. ARMs are typically more complicated than fixed-rate mortgages. Other Quizlet sets. The random variable is the number of successes in a fixed number of trials. Place the following items in the correct order in which they appear on the contribution margin format income statement. a. to report amounts for only 1 period temporary accounts should have ____ balance at the beginning of next period, Revenue and expense account balances are transferred to the owners capital account, the balance of the owner's drawing account is transferred to the owner's capital account, the accounting process that begins with analyzing and journalizing transactions and ends with the post-closing trial balance, transaction are analyzed and recorded in the journal, adjustment data are assembled and analyzed, an optional end of period spreadsheet is prepared, adjusting entries are journalized and posted to ledger, Financial statements are prepared (income, owner's equity, balance sheet, statement of cash flow). Closing entries are journalized and posted to the ledger. B. serve all consumers. 4. B) ), The interest rate for an adjustable-rate mortgage is a variable one. Study with Quizlet and memorize flashcards containing terms like 11. $1+\frac{1}{2}+\frac{1}{3}+\frac{1}{4}+\frac{1}{5}+\frac{1}{6}$. Study with Quizlet and memorize flashcards containing terms like Which of the following is not a factor in cost-volume-profit analysis? all of the information from the journal was correctly transferred to the ledger, Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means, Smith Inc. The results for conventional and activity-based costing (ABC) computations will be the same as long as: Which of the following is true of a firm that has adopted just-in-time? After the initial term, the loan resets, meaning there is a new interest rate based on current market rates. Company A's profit (loss) is: The break-even point is the level of sales at which profit equals ___________. Which of the following steps is optional during the closing process? The highest interest rate installment loans are usually made by: Which of the following is true of a loan collateral? a) defines the industries in which the company operates. etermine the adjusting journal entry for the following scenario: $1,000 supplies are purchased January 1. A company's net income or net loss for a period is determined during which of the following steps of the accounting cycle? And if you take on a large loan, you could be in trouble when interest rates rise: SomeARMsare structured so that interest rates can nearly double in just a few years. T13- prevention of personnel accidents. Sweet Dreams sells pillows for $25 each. Which of the following is a feature of a home equity loan? 27 terms. Which of the following sources of consumer loans often has the most favorable terms? What is the gerund form of the verb poner. Although the rate of interest is fixed, the total amount of interest youll pay depends on the mortgage term. The calculation for total costs is: Total costs = fixed costs + variable costs. which of the following is most likely to be the most challenging part of this first step of absolute valuation process? Gapminder uses cookies to improve its statistics and user experience. (a) Contracts resulting from sealed bidding shall be firm-fixed-price contracts or fixed-price contracts with economic price adjustment. The annual percentage rate (APR) on a single-payment loan for $1,000 at a simple interest rate of 12% is: If you borrow money on a single-payment loan and discover that you cannot pay it back when it is due, you should: You want to borrow $1,000 at an interest rate of 10%. How long do you intend to live on theproperty? Actual costs of a support department should not be allocated to producing departments because: The benefit of the dual-rate charging method of cost allocation is: A profit-volume graph is a graph of the _____. How do earnings yields differ from bond yields? C) process focus, repetitive focus, and product focus. Target profit for the year is $470,000. Pamela Rodriguez is a Certified Financial Planner, Series 7 and 66 license holder, with 10 years of experience in Financial Planning and Retirement Planning. $$ Total Rewards refers to all forms of pay and compensation, tangible benefits, and other intangible rewards that an organization provides Having a lower-cost product or service at the highest priority throughout its processes. Company A produces and sells 10,000 units of its product for $10 per unit. Variable costs are costs that change depending on the output of a business. If the business is producing or selling less, these costs will fall. Examples of costs for a business include rent, bills, and raw materials, staffing costs, petrol and postage. Prop 30 is supported by a coalition including CalFire Firefighters, the American Lung Association, environmental organizations, electrical workers and businesses that want to improve Californias air quality by fighting and preventing wildfires and reducing air pollution from vehicles. Units sold b. debit supplies expense $400; Credit supplies $400. If you're very lucky, it may be lower depending on what the market rates are like at the time of the rate reset. ", Consumer Financial Protection Bureau. Study with Quizlet and memorize flashcards containing terms like A company has reached its break-even point when the contribution margin ___________ fixed expenses., At the break-even point: (select all that apply) a. net operating income is zero b. the company is experiencing a loss c. total revenue equals total cost d. the company is earning a profit, A company's break-even The ARM, however, can pose some significant downsides. This brings the total of Covid-related spending in the 2021 budget to Lk17.2bn (1 percent of GDP). The excess of the current assets of a business over its current liabilities. Fixed and Variable Rate Loans: Which Is Better? Total liabilities and owner's equity equals $44,750; total current assets equals $19,800; land equals $15,000; and accumulated depreciationequipment equals $1,550. Which of the following statements is true regarding cost allocation? As you can see, the payments made during the initial years of a mortgage consist primarily of interest payments. IPOs incentivize entrepreneurs to innovate as IPOs provide a way for entrepreneurs to monetize their work, Why do company manager-owners smile when they ring the stock exchange bell at their IPO, An IPO crystalizes the value of the manager-owners stake, What is the prime reason that Jennys discretionary income is more volatile than her salary, Her mortgage payments and necessities are fixed. For example if a business have fixed costs of 18,500 and variable costs of 9,250 their total costs would be 18,500 + 9,250 = 27,750. Activity-based costing (ABC) can have a role in process settings provided: Which of the following is true of a physical flow schedule? A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the, Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts. Would you expect a typical open-end fixed-income mutual fund to have higher or lower operating expenses than a fixed-income unit investment trust? Study with Quizlet and memorize flashcards containing terms like Define / describe gross profit., Explain merchandise inventory., To compute net income for a merchandiser, you will start with net sales, subtract cost of goods sold and subtract other _____. If the ARM is held long enough, the interest rate will surpass the going rate for fixed-rate loans.. We would like to show you a description here but the site wont allow us. 55 terms. Study with Quizlet and memorize flashcards containing terms like Which of the following is true of a production report? Theinitial interest rateon an ARM is setbelow the marketrate on a comparable fixed-rate loan, and then the rate rises as time goes on. The chances are high that you are going to earn more in the coming years and will be able to afford the increased payments when your loan adjusts to a higher rate. The downside to fixed-rate mortgages is that when interest rates are high, qualifying for a loan is more difficultbecause the payments are less affordable. A written promise that a customer will pay a fixed amount of principal plus interest by a certain date in the future. No more guesswork - Rank On Demand Mortgage Brokers: Advantages and Disadvantages, What to Know When Dealing With Mortgage Loan Officers and Brokers, How Rocket Mortgage (Formerly Quicken Loans) Works, Adjustable Rate Mortgage: What Happens When Interest Rates Go Up, Know Before You Owe: Mortgage shopping study, Freddie Mac Clears Path for New Index Rate. Sales this year equals $927,500. Study with Quizlet and memorize flashcards containing terms like Why do companies do IPOs, Why do company manager-owners smile when they ring the stock exchange bell at their IPO, What is the prime reason that Jennys discretionary income is more volatile than her salary and more. which of the following accounts will be debited in the closing entry at the end of the year, beginning capital + net income - withdrawals = ending capital, assets liability and owner's equity account flow into. Therefore, the credit to Supplies in the adjusting entry is for the amount of supplies. In the process of preparing a production report for process costing, the step of unit cost calculation is followed by: The five steps that are needed to build a production report for process costing are as follows: Which of the following is true of the first-in, first-out (FIFO) costing method? If you can still afford it if the mortgage resets to the maximum cap in the future, an ARM will save you money every month. A mortgage is a loan used to purchase or maintain real estate. 36 terms. \end{array} Explain why a probabilistic model is more appropriate than a deterministic model. Variable costs are $15 per unit and fixed costs total $98,000. Could you still afford an ARM if interest rates rise? E) input, transformation, and output., 9) A job shop is an example of a(n): A) repetitive process. Lets say you are looking for your first home and just graduated from medical or law school or earned an MBA. \hline Fixed or Variable Rate Mortgage: Which Is Better Right Now? Based on this information: (select all that apply), b. The relative proportions in which a company's products are sold is referred to as __________ _________. Generally if the business is producing or selling more, these costs will rise. Study with Quizlet and memorize flashcards containing terms like Which of the following is true of fixed-rate loans? Adjustable-Rate Mortgages: An Overview, What Is a Mortgage? you are promised a stream of fixed dividends. Please do have a look at it if you need more information. Sign in, choose your GCSE subjects and see content that's tailored for you. The 30-year mortgage is the most popular choice because it offers the lowest monthly payment. The monthly payment on an 8%, 36-month, add-on loan for $10,000 would be: Which of the following is true of installment loans? B. operating cash flow minus cash flow to creditors. A measure of how sensitive net operating income is to a given percentage change in sales dollars is known as _________ __________. We can Calculate the cost of debt using the following formula Cost of Debt = (Risk-Free Rate + Credit Spread) * (1 Tax Rate) That person may be forced to purchase the new home while the old one is in contract and, as a result, will take out a one- or two-year ARM. Lance, Inc. has sales of 9,000 units. Find the markup. WebStudy with Quizlet and memorize flashcards containing terms like The marginal cost to produce an additional copy of a software product is effectively zero., With the advent of cloud computing and SaaS, smaller firms no longer have access to the kinds of sophisticated computing power they had access to in the past., The cost of producing an additional unit What is the ability-to-repay rule? In this example, the mortgage term is 30 years, the principal is $100,000, and the interest rate is 6%. Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as a(n), The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is, The account type and normal balance of Unearned Revenue is. A company has a target profit of $204,000. a. 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