Idaho Mining, Inc. borrows at prime plus 1.5% on its line of credit. The line requires a 15%
compensating balance. If the prime rate is 9% and Idaho Mining plans on borrowing for a period of
one year, what is the nominal APR of the line of credit?
A) 6.0% B) 9.0% C) 12.4% D) 10.6%
C
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A single-server queuing system has average time between arrivals of 20 minutes and a service time of 10 minutes each. Assuming Poisson arrivals and exponential service times, the utilization factor is approximately:
A) 0.25. B) 0.33. C) 0.50. D) 2.0.
Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is:
A. Debit Cash $8,250; credit Accounts Payable $8,250. B. Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50. C. Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50. D. Debit Accounts Payable $8,167.50; credit Cash $8,167.50. E. Debit Merchandise Inventory $8,250; credit Cash $8,250.
Which of the following is true for participations?
A. Participations are not suitable for small advertisers with limited budgets. B. In participations, advertisers have financial responsibility for production of the program. C. Participations involve long-term commitment on the part of advertisers. D. Participations offer advertisers a lower reach than sponsorships. E. In participations, advertisers have little control over the placement of ads.
Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows: Annual sales 2,500unitsSelling price per unit$304 Variable costs per unit: Production$125 Selling$49 Avoidable fixed costs per year: Production$50,000 Selling$75,000 Allocated common fixed corporate costs per year$55,000 If the new product is added, the combined contribution margin of the other, existing products is expected to drop $65,000 per year. Total common fixed corporate costs would be unaffected by the decision of whether to add the new product.At what selling price would the new product be just breaking even?
A. $250 per unit B. $282 per unit C. $232 per unit D. $246 per unit