You have been offered two different jobs for theupcoming summer. Since both are full-time positions, youmust choose to work only one of the jobs.The first job is in an office. The pay will be $700 perweek.The office is located 20 miles from your home, so youestimate that you will spend $50 per week on gas. Youwill also have to pay $50 per week for parking. Becauseyou are required to dress professionally, you will need topurchase some new clothes. You estimate that you willspend $420 on new clothes for this job during thesummer.The second job is at an amusement park. The pay will be$520 per week. The amusement park is also 20 milesfrom your home, but you can carpool with a friend. Yourshare of the gas will be $25 per week. There is no chargefor parking. The amusement park will furnish you with auniform, so you won't need to buy any special clothes.Assuming that your summer break will allow you to work12 weeks, which job will provide you with more money?Calculate the Net Income from both jobs. Make sure youdetail your calculations.What qualitative factors may convince you to take thelower paying job?

Net income, also known as net profit or net earnings, is a key financial metric that represents the…

Answered: You have been offered two different…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Monique has a flock of six chickens in her backyard that she initially bought for $6 each. Theflock currently lays 20 eggs per week, which Monique and her family consume at home, andher current cost of feed is $2 per week. Monique has a job that pays $8/hour with flexiblehours, but she is thinking of selling her chickens’ eggs to earn extra income. To start sellingeggs, she would need to increase production to 30 eggs per week. She can do this by increasingthe chickens’ feed to $3 per week and taking an hour off work each week to devote to chickenrearing. If the market price of her farm-fresh eggs is $1 per egg, what would be Monique’sweekly economic profits from selling her chickens’ eggs? (Select one.)(a) −$9: This is her revenue minus her accounting cost.(b) −$1: This is her revenue minus her production cost.(c) $0: Eggs are a constant-cost market so producers must earn 0 profits.(d) $1: This is her revenue minus her economic cost.(e) $7: This is her revenue minus her accounting…
Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,660. The booth will be open 26 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $190 per package. She will continue to sell the existing product, EZRecords, which costs $103 per package. Ms. Ortega believes that the salesperson will spend approximately 16 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 73 units of EZRecords and 59 units of ProOffice.
Leah Berry is entering her senior year as an accounting major and has a number of options for her summer break. Her options for the 3-month break follow: (1) Work full time at a local accounting firm making $1,500 per month. (2) Take a summer class which will cost 200 per month and work half time making $1,600 per month. (3) Take two classes at a total monthly cost of $3,200 and not work at all during the summer. Leah’s opportunity cost of taking two classes if she chooses option 3 over option 1 would be: $3,200 per month. $1,700 per month. $1,200 per month. $1,500 per month. $1,400 per month.
Candace just accepted her first job paying a $48,000 salary and is planning to take a $5,000 vacation cruise throughout Europe for 2 weeks. She is debating whether to take the trip now and finance it with a promotion from the travel company offering no payments for a year at a monthly periodic rate of 1%, or wait the year and save to pay for the trip. If she takes the trip now she will start her career 2 weeks late. Approximately how much would she save by waiting a year and not taking her unpaid time from work to travel? $2,480. $634. $1,557. $600.
In the upcoming year, the income from your current job will be $50,000. There is a 0.5 chance that you will keep your job and earn this income, and 0.2 chance that you will get a rise and earn 75,000. However, there is 0.3 chance that you will be laid off, putting you out of work for a time and forcing you to accept a lower paying job. In this case, your income is $25.000. The expected value of your income is thus $47,500.a) If your utility function has the formula 500I - 0.0002I2, determine the risk premium associated with this lottery.b) Provide an interpretation of the risk premium in this particular example.
A University of Massachusetts study found that married women who work outside the home do about one hour less of housework per week for every $7500 they earn outside the home. Assume that they hire a housekeeper one time per week for $120; that the $7500 is received in uniform amounts of $625 per month; and, that the housekeeper is paid weekly with these payments made before the $625 is received. What rate of return are they making per week on their “investment” in the housekeeper?
Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $15 per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?
Leah Berry is entering her senior year as an accounting major and has a number of options for her summer break. Her options for the 3-month break follow: (1) Work full time at a local accounting firm making $3,400 per month. (2) Take a summer class which will cost $800 per month and work half time making $1,800 per month. (3) Take two classes at a cost of $1,200 and not work at all during the summer. Leah’s incremental profit (or loss) if she chooses option 2 over option 1 would be ($1,100) per month. ($2,200) per month. ($2,400) per month. $1,300 per month. ($2,100) per month.
With only a part-time job and the need for a professional wardrobe, Rachel quickly maxed out her credit card the summer after graduation. With her first full-time paycheck in August, she vowed to pay $250 each month toward paying down her $11,375 outstanding balance and not to use the card. The card has an annual interest rate of 12%. How long will it take Rachel to pay for her wardrobe? Should she shop for a new card? Why or why not? If Rachel continues to pay $250 per month, it will take her ______ months to pay for her wardrobe. Should she shop for a new card?
Garth Grits works as an employee at Superior Foods, a local supermarket. As an employee, Garth earns $17 per hour and works 200 hours per month. Garth currently supplements his income with the interest he earns from having $30,000 in a savings account earning 5% annual interest. Instead of continuing to work for Superior Foods, Garth would like to start up his own dollar store called Just-a-Buck located in a strip mall close to his home. If Garth starts up Just-a-Buck, he would quit his job working for Superior Foods, and he would work full-time (200 hours per month) in his new business. To set up Just-a-Buck, Garth would have to use his $30,000 savings to buy the necessary equipment and make the appropriate renovations to the mall space he plans to rent. Garth hired an accountant who estimated the annual revenue and costs of Just-a-Buck as follows: Annual Store Sales $175000 Less Annual Expenses: Mall Rent (includes utilities) $10000 Cost of…
You graduated college six years ago with an undergraduate degree in Finance. Although satisfied withyour current job, your goal is to become an investment banker, and you wonder if an MBA degree wouldallow you to achieve that goal. After examining schools, you have narrowed your choice to eitherWilton University or Mount Perry College. Although internships are encouraged by both schools, to getcredit for the internship, no salary can be paid. Other than internships, neither school will allowstudents to work while enrolled on the MBA program. However, thanks to a bequest from yourgrandmother, your savings account has enough money to cover the entire cost of the MBA programYou currently work a money management firm, earning $53, 000 annually. Your salary is expected toincrease 3% per year until retirement. You expect to work for 38 more years. Your current job includesa fully paid health insurance plan. Your current average tax rate is 26%.The Ritter College of Business at Wilton…
Fiona has a four-year contract to sell coffee in a local office building. After two years in business, she wants to move on. Kurt wants to buy out the last two years of Fiona’s contract. He estimates he can make $7,500 in the first year and $7,800 in the second year. If the discount rate is 8%, what is the maximum amount Kurt should be willing to pay?

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