Question Completion:
Prepare a classified balance sheet as of December 31, 2021.
Answer:
Strong Corporation
STRONG CORPORATION
Classified Balance Sheet
As of December 31, 2021
Assets
Current Assets:
Cash $ 23,400
Accounts receivable 23,200
Prepaid insurance 4,300
Supplies 160,000 $210,900
Total current assets
Long-Term Investments $57,000
Long-term assets:
Land 46,000
Buildings 278,000
Acc. depreciation 83,000 195,000 $241,000
Total assets $508,900
Liabilities and Equity
Current liabilities:
Accounts payable 37,200
Notes payable, due 2022 62,000
Interest payable 11,000 $110,200
Long-term liabilities:
Notes payable, due 2031 $121,000
Equity:
Common stock 210,000
Retained earnings 67,700 $277,700
Total liabilities and equity $508,900
Explanation:
a) Data and Analysis:
STRONG CORPORATION
Post-closing Trial Balance
December 31, 2021
Accounts Debit Credit
Cash $ 23,400
Accounts receivable 23,200
Prepaid insurance 4,300
Supplies 160,000
Long-Term Investments 57,000
Land 46,000
Buildings 278,000
Accumulated depreciation $83,000
Accounts payable 37,200
Notes payable, due 2022 62,000
Interest payable 11,000
Notes payable, due 2031 121,000
Common stock 210,000
Retained earnings 67,700
Totals $ 591,900 $ 591,900
b) The balance sheet is a summary of the financial position or assets, liabilities, and equity of Strong Corporation as at December 31, 2021.
Chavez S.A., a Venezuelan company, wishes to borrow $8,000,000 for eight weeks (maturity). A rate of 6.250% per year is quoted by potential lenders in Great Britain, and Switzerland. British, and the Swiss-Euro bond definitions of interest (day count conventions) are 56 days and 60 days, respectively. Numbers of days in a financial year are 360. From which source should Chavez borrow?
Answer:
Chavez should borrow from the British market.
Explanation:
We need to compare the interest payment of both markets to make the decision
First, calculate the Interest payment in case, if borrowed from the British market
Interest Payment ( British ) = Principal Value x Interest rate x Time fraction
Interest Payment ( British ) = $8,000,000 x 6.250% x 56/360
Interest Payment ( British ) = $77,777.78
First, calculate the Interest payment in case if borrowed from Swiss market
Interest Payment ( Swiss ) = Principal Value x Interest rate x Time fraction
Interest Payment ( Swiss ) = $8,000,000 x 6.250% x 60/360
Interest Payment ( Swiss ) = $83,333.33
As the British market offers a lower rate, Chavez should borrow from the British market.
What is defined by an organization's mission statement?
A. A comprehensive list of the organization's budgets, schedules, and
milestones
B. How the organization differs from others and provides value to its
customers
C. A broad and inspiring overview of the company's
accomplishments
omplay's
D. The desired future plans for the expansion of the organization
Answer:How the organization differs from others and provide value to its customers
Explanation:
AP EX
5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a 9% coupon, semiannual payment ($45 payment every 6 months). The bonds currently sell for $896.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt? Do not round intermediate calculations. Round your answer to two decimal places.
Answer: 7.67%
Explanation:
To solve this, the financial calculator will be needed
Present value = -896.87
Future Value = 1,000
N = [(25 - 5years) × 2 = 40
PMT = $45
Given the above information, we will press the financial calculator as we'll press CPT after which we then press I/Y and we'll get 5.11%
Then, the the firm's after-tax cost of debt will be:
= (5.11% x 2 )(1 - 0.25)
= (0.0511 × 2) (0.75)
= 0.07665
= 7.665%
= 7.67%
Entity B bought equipment for $240,000 on January 1, 2021. It estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation was used. On January 1, 2022, Entity B decides that it will use the equipment for a total of 5 years. Compute the revised depreciation expense for 2022 and make the entry to record depreciation expense. Show work.
Answer:
Part 1
Revised depreciation expense = $32,000
Part 2
The entry to record depreciation expense :
Debit : Depreciation Expense $32,000
Credit : Accumulated Depreciation $32,000
Explanation:
Straight line method charges a fixed depreciation charge over the year of use of an asset.
Depreciation expense = (Cost - Salvage Value) ÷ Estimated Useful Life
2021
Depreciation expense = $80,000
2022
Old Depreciation expense = $80,000
New Depreciation expense = Depreciable Amount ÷ Remaining Useful Life
= ($240,000 - $80,000) ÷ 5
= $32,000
What is three ways eBay helps support small businesses? Full sentences please :)
Answer:
1. Gets you customers fast
2. There is a 95% chance you will make a profit
3. eBay is a big platform with multiple users
The Miller Manufacturing Company has two divisions. The Cutting Division prepares timber at its sawmills. The Assembly Division prepares the cut lumber into finished wood for the furniture industry. No inventories exist in either division at the beginning of 2019. During the year, the Cutting Division prepared 60,000 cords of wood at a cost of $660,000. All the lumber was transferred to the Assembly Division, where additional operating costs of $6 per cord were incurred. The 600,000 boardfeet of finished wood were sold for $2,500,000. Required: Determine the operating income for each division if the transfer price is $9 per cord.
Answer and Explanation:
The computation of the operating income in the case when the transfer price is $9 per cord
Particular Cutting Assembly
Revenue $540,000 $2,500,000
(60,000 × $9)
Cost of service
Incurred $660,000 $360,000
(60,000 × $6)
Transfered in $0 $540,000
Total $660,000 $900,000
Operating income -$120,000 $1,600,000
Blossom Company had the following transactions. 1. Sold land (cost $8,400) for $10,500. 2. Issued common stock at par for $22,200. 3. Recorded depreciation on buildings for $12,200. 4. Paid salaries of $7,400. 5. Issued 1,000 shares of $1 par value common stock for equipment worth $8,100. 6. Sold equipment (cost $13,800, accumulated depreciation $9,660) for $1,656. (a) For each transaction above, prepare the journal entry.
Answer:
Item 1
Debit : Cash $10,500
Credit : Land $8,400
Credit : Profit and Loss $2,100
Item 2
Debit : Cash $22,200
Credit : Common Stock $22,200
Item 3
Debit : Depreciation Expense $12,200
Credit : Accumulated Depreciation $12,200
Item 4
Debit : Salaries Expense $7,400
Credit : Cash $7,400
Item 5
Debit : Equipment $8,100
Credit : Common Stock $1,000
Credit : Common Stock Paid in Excess of Par $7,100
Item 6
Debit : Cash $1,656
Debit ; Accumulated Depreciation $9,660
Debit : Profit and Loss $2,484
Credit : Cost $13,800
Explanation :
See the entries prepared above.
Note on Sale of Assets :
When a sale of asset is made, derecognize the cost of asset, derecognize the accumulated depreciation, recognize the profit or loss on sale and finally recognize the cash receipts.
odarta Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $1.20 per machine-hour and the denominator level of activity is 6,600 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $8,340 and the company actually worked 6,400 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,480 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month
Answer:
$144 unfavorable
Explanation:
The computation of the overall fixed manufacturing overhead volume variance for the month is shown below:
But before that following calculations need to be done
Budgeted manufacturing overhead is
= 6600 × $1.20
= $7,920
And,
Manufacturing overhead applied is
= Standard hours × Predetermined overhead rate
= 6480 × $1.20 = $7,776
So, fixed manufacturing overhead volume variance is
= Fixed overhead applied - budgeted fixed overhead
= $7,776 - $7,920
= $144 unfavorable
Natchez, Inc. is considering the purchase of a new machine costing $200,000. The company will incur $5,000 per year in cash operating expenses but it will allow the company to earn an additional $100,000 per year in revenues. Natchez expects the machine to provide future benefits for 3 years and salvage value at the end of the 3-year period to be $10,000. The company uses straight-line depreciation method. The income tax rate is 30%. If the required rate of return is 10%, how much is the net present value of this project
Answer:
$20,138.74
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
To determine cash flow, use this formula
Cash flow = (revenue - cost - depreciation) (1 - tax rate) + depreciation
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(200,000 - 10,000) / 3 = 63,333
(100,000 - 5000 - 63,333) x ( 1 - 0.3) + 63,333 = 85499.90
Cash flow in year 0 = $-200,000
Cash flow in year 1 = 85499.90
Cash flow in year 2 = 85499.90
Cash flow in year 3 = 85499.90 + 10,000 = 95,499.90
I = 10
NPV = $20,138.74
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
A lottery winner can take $6million now or be paid $600,000 at the end of each year for the next 16 years. The winner calculates the internal rate of return of taking the money at the end of each year, and estimating that the discount rate across this period will be 5%, decides to take the money at the end of each year. Was her decision correct
Answer:
yes
the present value of the 16 year annuity is 6502661.74. this is greater than $6 million
Explanation:
At the beginning of the tax year, Barnaby's basis in the BBB Partnership was $50,000, including his $5,000 share of partnership debt. At the end of the tax year, his share of debt was $8,000. His share of the partnership's income for the year was $20,000, and he received cash distributions totaling $12,000. In addition, his share of the partnership's nontaxable income was $1,000.
Required:
Determine Barnaby's basis at the end of the tax year.
Answer:
$62,000
Explanation:
Calculation to Determine Barnaby's basis at the end of the tax year
Using this formula
Ending tax year Barnaby's basis in the partnership=[BBB Partnership basis+( Share of debt-Share of partnership debt)+ Share of Partnership's income +Share of partnership's nontaxable income-Cash distributions]
Let plug in the formula
Ending tax year Barnaby's basis in the partnership =$50,000 + ($8,000-$5,000) + $20,000 + $1,000 - $12,000
Ending tax year Barnaby's basis in the partnership =$50,000 + $3,000 + $20,000 + $1,000 - $12,000
Ending tax year Barnaby's basis in the partnership = =$62,000
Therefore Barnaby's basis at the end of the tax year will be $62,000
Using the following categories, indicate the effects of the following transactions. Indicate the accounts affected and the amounts. (Enter any decreases to account balances with a minus sign.)
a. During the period, customer balances are written off in the amount of $11,600.
b. At the end of the period, bad debt expense is estimated to be $9,600.
Answer:
Note: See the attached excel for the Indication of the effects of the two transactions.
Explanation:
From the attached excel file, we have:
a. During the period, customer balances are written off in the amount of $11,600.
Assets increase as the Allowance for doubtful accounts increases by $11,600; but Assets also decreases at the same as Accounts receivable decreases by $11,600.
b. At the end of the period, bad debt expense is estimated to be $9,600.
Assets decrease as the Allowance for doubtful accounts decreases by $9,600; and Stockholders' Equity also decreases as Bad debt expense increases by $9,600.
The following information is available: Units in process, Dec. 1 (60 percent converted) 2,000 units Units in process, Dec. 31 (30 percent converted) 1,000 units Units started during the month 7,500 units Materials are added at the beginning of the process. How many equivalent units in process for conversion were there in December using the weighted average method? Group of answer choices
Answer:
the equivalent unit for conversion is 8,800 units
Explanation:
The computation of the equivalent unit for conversion is shown below:
= Units transferred + ending units
= (2,000 + 7,500 - 1,000) × 100 units + 1,000 units ×30%
= 8,500 units + 300 units
= 8,800 units
Hence, the equivalent unit for conversion is 8,800 units
We simply used the above formula for determining the conversion units
What is the difference between earning a wage and earning a salary?
Answer:
Wages are the money your employer pays you for the hours you work each week. A salary, on the other hand, typically defines a fixed amount your employer pays you, not necessarily for specific hours worked but for completing the duties of your job
Explanation:
A student wants to have $30,000 at graduation 4 years from now to buy a new car. His grandfather gave him $10,000 as a high school graduation present. How much must the student save each year if he deposits the $10,000 today and can earn 12% on both the $10,000 and his earnings in a mutual fund his grandfather recommends
Answer:
Annual deposit= $2,984.69
Explanation:
First, we need to calculate the Future Value of the lumpsum investment using the following formula:
FV= PV*(1+i)^n
FV= 10,000*(1.12^4)
FV= $15,735.19
Now, the annual deposit to cover the difference:
Difference= 30,000 - 15,735.19= 14,264.81
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (14,264.81*0.12) / [(1.12^4) - 1]
A= $2,984.69
The Phillips curve was first suggested as a description of the relationship between inflation and unemployment in the late 1950s, and data through the 1960s were consistent with its predictions. What happened in the 1970s?
Answer: High inflation and high unemployment in the United States undermined the Phillips hypothesis.
Explanation:
In the year the 1970s, there is high inflation and high unemployment in the United States that undermined the Phillips hypothesis.
What happened in the 1970s?Since the Phillips curve was first recommended by the description of the relationship that lies between inflation and unemployment.
So based on this, we can say that In the year the 1970s, there is high inflation and high unemployment in the United States that undermined the Phillips hypothesis.
Learn more about inflation here: https://brainly.com/question/17183026
An object was thrown from rest upward with an initial velocity of 10m/s with time frame of 6s find the distance of the object from it's resting point
Answer:
5.10 m
Explanation:
Given that :
Initial Velocity, u = 10m/s
Time taken, t = 6s
Distance traveled by the object , s
The final velocity, v at this point = 0
Upward throw, g = - (negative)
Using the relation :
u² =. V²-2gs
g = 9.8 m/s
10² = 0² - 2(9.8)*S
100 = 19.6S
S = 100 / 19.6
Distance traveled = 5.10 m
On January 1, Year 1, Canseco Plumbing Fixtures purchased equipment for $52,000. Residual value at the end of an estimated four-year service life is expected to be $4,000. The company uses the straight-line method. For how much would each item below be reported at the end of Year 2?
Answer:
Reported for Year 2 will be :
Depreciation Expense = $12,000
Accumulated Depreciation = $24,000
Book Value = $28,000
Explanation:
Straight line method charges a fixed amount of depreciation for the period that the asset is in use in the business.
Depreciation Charge = (Cost - Salvage Value) ÷ Estimated Useful Life
therefore,
Depreciation Charge = ($52,000 - $4,000) ÷ 4
= $12,000
we know that,
Accumulated depreciation = Sum of all depreciation to date
and
Book Value is the Costs less Accumulated depreciation
thus,
Balances for the Next 2 years will be as follows
Year 1
Depreciation Expense = $12,000
Accumulated Depreciation = $12,000
Book Value = $40,000
Year 2
Depreciation Expense = $12,000
Accumulated Depreciation = $24,000
Book Value = $28,000
Consider the following premerger information about Firm X and Firm Y:
Firm X Firm Y
Total earnings $96,000 $22,500
Shares outstanding 53,000 18,000
Per-share values:
Market $53 $18
Book $14 $8
Assume that Firm X acquires Firm Y by issuing long-term debt to purchases all the shares outstanding at a merger premium of $5 per share. Construct the post-merger balance sheet for Firm X assuming the use of the purchase accounting method.
Answer:
Firm X and Firm Y
Post-merger Balance Sheet for Firm X
Net assets $886,000
Goodwill 90,000
Total assets $976,000
Common stock $742,000
Long-term debt 234,000
Total liabilities and
equity $976,000
Explanation:
a) Data and Calculations:
Firm X Firm Y
Total earnings $96,000 $22,500
Shares outstanding 53,000 18,000
Per-share values:
Market $53 $18
Book $14 $8
Net assets $742,000 $144,000
= (53,000*$14) (18,000*$8)
Net assets = Common Stock for each company
Merger premium on Firm Y $5
Goodwill on acquisition = $90,000 (18,000 * $5)
Investment in Firm Y = $234,000 (18,000 * ($8 + $5)
Long-term debt issued = $234,000
Net assets
Firm X net assets before acquisition = $742,000
Firm Y net assets before acquisition = 144,000
Net value of combined assets = $886,000
Todd has a $100,000 25-year mortgage with a 12% nominal interest rate convertible monthly. The first payment is due one month after the mortgage is taken out. Twelve years after taking out the mortgage (after making his 144th payment), he refinances with a new nominal interest rate of 8%, again convertible monthly. The new mortgage will be paid off on the same date as the original one. Calculate the difference in the monthly mortgage payment after refinancing.
Answer:
The right solution is "$178.86".
Explanation:
The given values are:
Interest rate,
= 10%
New nominal interest rate,
= 8%
Years,
= 24
As per the question,
On the original loan, the annul installments will be:
= [tex]100000\times 0.01\times 1.01^{\frac{300}{1.01^{300-1}}}[/tex]
= [tex]1053.22[/tex] ($)
As we know,
The remaining 156 instalments are charged throughout the PV after the 144th deposit,
= [tex]1053.22\times \frac{(1.01^{156-1})}{(0.01\times 1.01^{156}})[/tex]
= [tex]83,017.90[/tex] ($)
On the refinanced loan, the annul installments will be:
= [tex]83017.90\times 0.01\times \frac{1.01^{300}}{(1.01^{300-1})}[/tex]
= [tex]874.36[/tex] ($)
hence,
After refinancing, the difference in mortgage will be:
= [tex]Annual \ installment \ on \ original \ loan-Annual \ installment \ on \ refinanced \ loan[/tex]
= [tex]1053.22-874.36[/tex]
= [tex]178.86[/tex] ($)
Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows: Year 1 $ 379,000 Year 2 $ 354,000 Year 3 $ 289,000 Year 4 $ 234,000 Year 5 $ 189,000 What is the payback period
Answer:
The payback period is 2 years and 337 days to cover the initial investment.
Explanation:
Giving the following information:
Cash flows:
Year 1 $ 379,000
Year 2 $ 354,000
Year 3 $ 289,000
Year 4 $ 234,000
Year 5 $ 189,000
Initial investment= $1,000,000
The payback period is the time required for the cash flows to cover the initial investment:
Year 1= 379,000 - 1,000,000= -621,000
Year 2= 354,000 - 621,000= -267,000
Year 3= 289,000 - 267,000= 22,000
To be more accurate:
(267,000 / 289,000)= 0.923*365= 337
The payback period is 2 years and 337 days to cover the initial investment.
Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $48,400. The machine's useful life is estimated at 10 years, or 394,000 units of product, with a $9,000 salvage value. During its second year, the machine produces 33,400 units of product.
Required:
Determine the machine's second-year depreciation using the units-of-production method.
Answer:
$3,340
Explanation:
Step 1 : Determine the Depreciation rate
Depreciation rate = Cost - Salvage Value ÷ Estimated Units
Depreciation rate = $0.10
Step 2 : Depreciation Expense
Depreciation Expense = Depreciation rate x units produced
Depreciation Expense = $3,340
Therefore,
the machine's second-year depreciation using the units-of-production method is $3,340
Sales revenue
may be recorded before cash is collected.
will always equal cash collections in a month.
only results from credit sales.
is only recorded after cash is collected.
Answer:
may be recorded before cash is collected.
Explanation:
Sales revenue "may be recorded before cash is collected."
This is according to Accrual accounting, which unlike the cash model that requires payments to be made before sales revenue is recorded.
In the Accrual accounting model, sales revenue recording is not based on cash collection before it is recorded. Here, the revenue is recorded in as much the transferred goods are made and collection of payment is determined or expected.
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,020,000 and will be sold for $1,220,000 at the end of the project. If the tax rate is 35 percent, what is the aftertax salvage value of the asset
Answer:
The after-tax salvage value of the asset is:
= $793,000.
Explanation:
a) Data and Calculations:
Asset acquisition cost = $6,020,000
Salvage value = $1,220,000
MACRS Depreciation Expenses = $4,800,000
Project useful life or project duration = 5 years
Tax rate = 35%
Tax expense = $427,000
After-tax salvage value = $793,000 ($1,220,000 - $427,000)
b) The salvage value of the project asset is the recovery or residual value after depreciation expenses have been recognized over the project asset's useful life. Depreciation is an accounting method of spreading the cost of an asset over its useful life. There are many depreciation methods, including straight-line, double-declining, unit-of-production, sum-of-the-years digits, etc.
Explain the significance of capital structure.
In 1960, Frederick Herzberg constructed a two-dimensional paradigm of factors that affect people's work attitudes.
a. True
b. False
Answer:
A.
Explanation:
Frederick Herzberg was an American behavioral scientists who proposed the theory of Two-Factors. In his theory, he defined that an employee is motivated by two-factors, viz., motivators and hygience factors.
He remarks that motivators such as recognition and achievement motivates employees to work harder, whereas, hygience factors such as salary also effects employees motivation to work.
Therefore, the given statement is true. Thus option A is correct.
Your purpose for writing a formal business letter should be clearly stated in _____.
a postscript following your signature
the first paragraph
the salutation
the conclusion of the letter
Answer:
the answer is C hope this helps
Which of the following statements is incorrect?
a. Adjustments to prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities.
b. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded.
c. Adjusting entries can be used to record both accrued expenses and accrued revenues.
d. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time.
e. Adjusting entries affect the cash account.
my brain can't process this lol
Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2020. Gross receipts were $300,000. The following expenses were incurred and paid as indicated:
Expense Payment Date
Rental of coliseum $25,000 December 21, 2020
Cost of goods sold:
Food 30,000 December 30, 2020
Souvenirs 60,000 December 30, 2020
Performers 100,000 January 5, 2021
Cleaning the coliseum $10,000 February 1, 2021
Performers Cleaning the coliseum Because the coliseum was not scheduled to be used again until January 15, the company with which Duck had contracted did not perform the cleanup until January 8-10, 2020. a. Calculate Duck's net income from the concert for tax purposes for 2019. If an amount is zero, enter "0".
Gross receipts 300,000 ✓
Coliseum rental 25,000
Food 30,000
Souvenirs 60,000
Performers 100,000
a. Calculate Duck's net income from the concert for tax purposes for 2019. If an amount is zero, enter "0". Gross receipts 300,000 Less: Coliseum rental 25,000 Food 30,000 Souvenirs 60,000 Performers 100,000 Cleaning costs Total expenses 215,000 Net income for 2019 85,000
b. What is the true cost to Duck if it had to defer the $100,000 deduction for the performers until 2020? Assume a 5% discount rate and a 21% marginal tax rate in 2019 and 2020. The present value factor for a single sum at 5% for one year is 0.9524. If required, round your answers to the nearest dollar. The present value of the 2020 tax savings is and the cost of the deferral to Duckiss.
Answer:
Duck Corporation
Rock Concert
a) Income Statement for the year ended December 31, 2020:
Gross receipts $300,000
Less: Coliseum rental 25,000
Food 30,000
Souvenirs 60,000
Performers 100,000
Total expenses 215,000
Net income for 2019 85,000
b) The true cost is $116,240.
Explanation:
a) Data and Calculations:
Rental of coliseum $25,000 December 21, 2020
Cost of goods sold:
Food 30,000 December 30, 2020
Souvenirs 60,000 December 30, 2020
Performers 100,000 January 5, 2021
Cleaning the coliseum $10,000
b) The Cleaning expense is excluded because the services had not been rendered as at December 31. The inclusion of the Performers' compensation is necessary because the services had been enjoyed and incurred as at December 31.
c) The true cost = the Present value of the $100,000 performers' compensation plus additional tax expense of $21,000 ($100,000 * 21%) that would have been deducted.
= $116,240 ($95,240 + $21,000)
Alexa and David are managers of different sales teams. Together, they decide to have a competition between teams to see who can bring in the most new clients this month. To increase the sense of competition, they create spirit days where they wear team colors (Alexa's team: blue, David's black), strategize ways to beat the other group, and keep a running total of who is winning on a white board. Alexa and David are employing______to increase productivity.
A. Social identity theory.
B. Parasocial interaction theory.
C. Leader-member exchange theory.
D. Vigilant interaction theory.
E. Expectancy theory.
Answer:
D. Vigilant interaction theory
Explanation:
It is correct to say that Alexa and David are employing the theory of vigilant interaction to increase productivity.
This theory is related to the team's decision-making process, that is, its objective is the integration and collaboration of the entire group with innovative and creative contributions that help in solving problems, helping in a more effective decision-making that contributes for the positive end result of the team.
Therefore, when using the strategy of increasing the sense of competition in the teams, managers seek the theory of vigilant interaction so that the final result and the goals of the teams are achieved.