Answer:
$13,500 semiannually
Explanation:
The Interest payment of a bond is calculated using the par value and the coupon rate of the bond. It is calculated by multiplying par value with coupon rate of the bond. Premium or Discount is amortized separately and added in the interest expense value.
As per given data
Par value = $270,000
Coupon Rate = 10%
Interest Payment = $270,000 x 10% = $27,000 annually = $13,500
The company pay $13,500 semiannually as interest payment
Photo Framing's cost formula for its supplies cost is $1,080 per month plus $18 per frame. For the month of November, the company planned for activity of 618 frames, but the actual level of activity was 608 frames. The actual supplies cost for the month was $12,550. The spending variance for supplies cost in November would be closest to:
Answer:
$526 was the spending variance in November
Explanation:
The spending variance in the month involves knowing the difference between actual supplies cost incurred in the month and the budgeted supplies cost based on actual activity
Budgeted supplies cost based on actual activity of 608 frames=$1080+(608*$18)
Budgeted supplies cost based on actual activity of 608 frames=$1080+$10,944=$12,024
Spending variance=$12,550-$12.024 =$526
The actual spend was $526 more than the budgeted spend based on actual activity,hence an unfavorable variance was recorded
1. What are the three stages in strategic management? Which stage is more analytical? Which relies most on empowerment to be successful? Which relies most on statistics?
Answer:
strategic management: strategy formulation, strategy implementation, and evaluation and control.
1. The three stages in strategic management are strategy formulation, strategy implementation, and strategy evaluation. 2. Strategy formulation is the most analytical. 3. Strategy implementation relies most on empowerment for success. 4. Strategy formulation relies heavily on statistics.
1. Strategic management consists of three main stages:
Strategy Formulation: This involves the development of a vision and mission, identifying the organization's external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.Strategy Implementation: This is the process through which strategies and policies are put into action via the development of programs, budgets, and procedures. It often requires changes within the organization and relies heavily on leadership and communication.Strategy Evaluation: The final stage involves monitoring and controlling the strategies to ensure that they are moving the organization towards its goals. It involves the review of internal and external factors, performance measurements, and corrective actions if needed.2. Most Analytical Stage:
Strategy Formulation is the most analytical stage as it involves extensive research, data analysis, and the use of strategic planning models to assess the internal and external environment.
3. Stage Relying on Empowerment:
Strategy Implementation relies most on empowerment as it requires employees at all levels to take initiative and align their actions with the strategic objectives. Successful implementation depends on effective empowerment and leadership.
4. Stage Relying on Statistics:
Strategy Formulation also relies most on statistics as it involves the analysis of market data, trends, financial data, and other quantitative assessments to make informed decisions.
The complete question is:
1. What are the three stages in strategic management?
2. Which stage is more analytical?
3. Which relies most on empowerment to be successful?
4. Which relies most on statistics?
Petrus Framing's cost formula for its supplies cost is $1,750 per month plus $9 per frame. For the month of March, the company planned for activity of 615 frames, but the actual level of activity was 622 frames. The actual supplies cost for the month was $7,850. The activity variance for supplies cost in March would be closest to: Multiple Choice $63 U $565 U $565 F
Answer:
$ 565 Unfavorable
Explanation:
The actual supplies cost for the month was $7,850
The planned cost supplies for the month would be = $1750 + 9(615)= $1750 +5535= $ 7285
Activity Variance= Actual Supplies Cost- Planned Supplies Cost
Activity Variance= $7,850-$ 7285= $ 565 Unfavorable
An activity variance is a measure of the difference in the planned budget amounts and actual amounts. It is calculated for different activity levels.
The 2016 financial statements of CVS Health Corporation reported the following information (in millions): 2016 2015 Net sales $177,526 $153,290 Cost of sales 148,669 126,762 Inventories, net 14,760 14,001 The inventory turnover ratio for 2016 is: A. 9.22 B. 11.48 C. 9.33 D. 10.34 E. None of the above
Answer:
D. 10.34
Explanation:
The computation of inventory turnover ratio is shown below:-
For computing the inventory turnover ratio first we need to find out the average inventory
Average inventory = (Opening stock + Closing stock) ÷ 2
= ($14,760 + $14,001) ÷ 2
= 14380.50
Inventory turnover ratio = Cost of goods sold ÷ Average inventory
= $148,669 ÷ 14380.50
= 10.34
On January 1, Alan King decided to transfer an amount from his checking account into an investment account that later will provide $80,000 to send his son to college (four years from now). The investment account will earn 8 percent, which will be added to the fund each year-end. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided.)
Answer:
The requirement of the question is as below:
How much must Alan deposit on January 1? (Round your final answer to the nearest whole dollar amount.)
What is the interest for the four years? (Round your final answer to the nearest whole dollar amount.)
Alan deposit on January 1 is $ 58,802.39
Interest for four years is $21,197.61
Explanation:
The first is asking for today's worth of the investment,which is the amount to be invested,this can be computed using the present value as shown below:
PV=FV*(1+r)^-n
PV is the present value
FV is the worth of the investment in 4 years from now which is $80,000
r is the rate of return of 8%
n is the number of years of investment which is 4 years
PV=$80,000*(1+8%)^-4
PV=$80,0008(1+0.08)^-4
PV=$80,000*(1.08)^-4
PV =$ 58,802.39
interest for four years=FV-PV
interest for four years=$80,000-$ 58,802.39
=$21,197.61
Oceanside Marine Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Oceanside uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 2 pound per unit; $ 12 per pound Direct labor: 4 hours per unit; $ 19 per hour Oceanside produced 3 comma 000 units during the quarter. At the end of the quarter, an examination of the direct materials records showed that the company used 7 comma 500 pounds of direct materials and actual total materials costs were $ 99 comma 300. What is the direct materials cost variance? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A. $ 3 comma 720 Unfavorable B. $ 9 comma 300 Unfavorable C. $ 3 comma 720 Favorable D. $ 9 comma 300 Favorable
Answer:
B. $9 comma 300 Unfavorable
Explanation:
To calculate the direct material cost variance we use formula :
Cost variance : (Actual cost - Standard cost ) * Actual quantity
Actual cost : Actual total direct material cost / Actual direct material used in pounds
$99,300 / 7500 pounds = $13.24
$13.24 - $12 * 7,500 pounds = $9,300
The actual cost is higher than the standard cost therefore the variance is unfavorable.
Baker Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work-in-process inventory that were 90% complete with respect to conversion costs. An additional 95,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 11,000 units in the ending work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month
Answer:
the equivalent units of production for conversion costs in the Assembly Department for the month are 101,900
Explanation:
Step 1 Calculate the Units Completed and Transferred to Finished Goods
Units Completed and Transferred to Finished Goods = units in beginning work-in-process inventory+ units were transferred in from the prior department-units in the ending work-in-process inventory
therefore, Units Completed and Transferred to Finished Goods = 8,000+95,000-11,000 = 92,000
Step 2 Calculate the equivalent units of production for conversion costs
Note : work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs
Work-in-process inventory (11,000× 90%) = 9,900
Units Completed and Transferred Out (92,000× 100%) = 92,000
Total equivalent units of production = 101,900
Answer:
Equivalent unit of production = 101,900 units
Explanation:
Calculating the unit transfer to next department using the formula;
Unit transfer to next department = unit in beginning work in progress+unit started into production -unit in ending work in progress
Unit transfer to next department = 8000+95000-11000
= 92,000
Calculating the conversion unit, we have;
Conversion = 11,000*90%
= 9900
Therefore,
Equivalent unit of production = Unit transfer to next department + Conversion
= 92,000+9900
= 101,900 units
Equivalent unit of production = 101,900 units
1. Understanding Persuasion in a Social and Mobile Age Contemporary businesses have embraced leaner corporate hierarchies, simultaneously relying on teams, eliminating division walls, and blurring the lines of authority. As teams and managers are abandoning the traditional command structure, excellent persuasive skills are becoming ever more important at work. Effective businesspeople must learn to in order to improve relationships with teams and coworkers. influence The most striking developments, summ on, are less than three decades old. be authoritative be blunt Check all that apply command How has persuasion changed in the digitar ager Check an that apply. All businesses are in the persuasion business Persuasion is more complex and impersonal Persuasive techniques are more subtle and misleading Persuasive messages are slow to engage audiences Persuasive messages are targeted to very specific audiences While delivery channels have changed, the principles of effective persuasion have not. 1. Understanding Persuasion in a Social and Mobile Age Contemporary businesses have embraced leaner corporate hierarchies, simultaneously relying on teams, eliminating division walls, and blurring the lines of authority. As teams and managers are abandoning the traditional command structure, excellent persuasive skills are becoming ever more important at work. Effective businesspeople must learn to in order to improve relationships with teams and coworkers. The most striking developments, summarized in this section, are less than three decades old. Check all that apply How has perstasion changed in the digital age? Check all that apply All businesses are in the persuasion business Persuasion is more complex and impersonal Persuasive techniques are more subtle and misleading Persuasive messages are slow to engage audiences Persuasive messages are targeted to very specific audiences While delivery channels have changed, the principles of effective persuasion have not.
Answer:
Explanation:
1. Understanding Persuasion in a Social and Mobile Age Contemporary
businesses have embraced leaner corporate hierarchies, simultaneously relying on teams, eliminating division walls, and blurring the lines of authority.
As teams and managers are abandoning the traditional command structure, excellent persuasive skills are becoming ever more important at work.
As businesses change their hierarchies, persuasive skills are becoming ever more important at work as teams.In the digital age, businesses have moved toward leaner corporate hierarchies, simultaneously relying on teams, dismantling division walls, and blurring the lines of authority. This is why persuasive skills are becoming ever more important at work, as teams and managers are abandoning the traditional
command structure
How has persuasion changed in the digitar age Check an that apply.
All businesses are in the persuasion business
Persuasion is more complex and impersonal
Persuasive techniques are more subtle and misleading:Instead of a blunt, pushy hard-sell approach, persuaders play on emotions by using flattery, empathy, nonverbal cues, and likability appeals, which can be more subtle and misleading
The volume and reach of persuasive messages have exploded
In the digital age, business persuasion relies heavily on subtlety, credibility and physical attractiveness. The principles of effective persuasion have remained largely unchanged, but the delivery channels have evolved. All businesses are in essence in the persuasion business.
Explanation:The nature of persuasion has significantly evolved in the digital age. As businesses shift towards leaner corporate hierarchies, and traditional command structures are blurred, the power of persuasion has become a critical skillset for individuals and teams within a business structure.
In the digital age, all businesses are essentially in the persuasion business. Persuasion has become simultaneously more complex and impersonal due to several factors. Foremost among these factors is the shift towards subtle and nuanced techniques that are often more effective than direct messages. Yet, the principles of effective persuasion have remained largely unchanged.
In today's rapidly evolving workplace environments, characterized by shifts in technology, economics, foreign competition, globalization, and demographics, excellent persuasive skills are becoming ever more critical. Teams and managers need to use persuasive power to influence others and build group consensus, especially when authority is diffused throughout the organization.
In summation, while the delivery channels of persuasion have changed, the principles of effective persuasion - such as credibility, physical attractiveness, and subtlety - have remained the same. All businesses - irrespective of their field of operation - must learn to influence to improve relationships with teams and coworkers in today's social and mobile age.
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Jones is the manager of an upscale clothing store in a shopping mall that contains only two such stores. While these two competitors do not carry the same brands of clothes, they serve a similar clientele. Jones was recently notified that the mall is going to implement a 10 percent across-the-board increase in rents to all stores in the mall, effective next month. How should Jones change her prices in response to this 10 percent increase in monthly rent?
Answer:
Jones is the manager of an upscale clothing store in a shopping mall that contains only two such stores. While these two competitors do not carry the same brands of clothes, they serve a similar clientele. Jones was recently notified that the mall is going to implement a 10 percent across-the-board increase in rents to all stores in the mall, effective next month. How should Jones change her prices in response to this 10 percent increase in monthly rent?
In response to this 10 percent increase in monthly rent, Jones should not increase the prices for both stores.
Explanation:
A 10 percent increase in the rent signifies an increase in the fixed cost. Therefore, both stores observe a rise of 10 percent in their fixed cost, when a 10 percent across-the-board increase in rent is applied in the mall. However, this does not raise the variable cost and the marginal cost.
Therefore, in response to this 10 percent increase in monthly rent, Jones should not increase the prices for both stores.
Suppose labor productivity is $110,000 per worker in 2015. Calculate the value of labor productivity in 2035 (20 years later) if: Instructions: Enter your responses rounded to the closest $100. a. Productivity continues to grow by 2.6 percent per year. U.S labor productivity in 2035 would be $ 183,798 183,798 Correct per worker. b. Productivity falls to 2.0 percent per year (the average productivity growth between 1970 and 2009). U.S. labor productivity in 2035 would be $ 163,454 163,454 Correct per worker. c. How much lager would labor productivity per worker be in 2035 with the higher growth rate compared to the lower growth rate. Instructions: Enter your responses rounded to two decimal places. 1.12
Answer:
A. Based on a 2.6% productivity growth per year labor productivity will be $183,798 in 2035 (that is $73,798 improvement over 20 years)
B. Based on a 2.0% productivity growth per year labor productivity will be $163,454 in 2035 (that is $53,454 improvement over 20 years)
C. The difference between both growth scenarios is $20,343
Explanation:
A detailed presentation can be found attached.
The labor productivity in 2035 is estimated to be $183,798 per worker with a 2.6% annual growth rate and $163,454 per worker with a 2.0% annual growth rate. The difference between these two rates is 1.12 times larger at a growth rate of 2.6% than 2.0%.
Explanation:The question asks to calculate the value of labor productivity in 2035, given certain growing rates. In this scenario:
If productivity continues to grow by 2.6 percent per year, from a labor productivity of $110,000 in 2015, the estimation for 2035 predicts a U.S labor productivity of $183,798 per worker. If productivity falls to 2.0 percent per year (average productivity growth between 1970 and 2009), from the same initial labor productivity of $110,000 in 2015, U.S labor productivity in 2035 will be estimated to be $163,454 per worker. The difference in labor productivity per worker in 2035 with the higher growth rate compared to the lower growth rate is 1.12 times larger at a growth rate of 2.6% versus 2.0%.Learn more about Labor Productivity Calculation here:
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On January 1 st 2012, Everhart Corporation, a calendar year company issues $100,000, 5%, 5-year bonds dated January 1, 2012. The bond pays interest semiannually on January 1 and July 1 . The bonds are issued to yield 6%. 2.50% 3.00% 5.00% 6.00% Present value of a single sum for 5 periods 0.88385 0.86261 0.78353 0.74726 Present value of a single sum for 10 periods 0.78120 0.74409 0.61391 0.55839 Present value of an annuity for 5 periods 4.64583 4.57971 4.32948 4.21236 Present value of an annuity for 10 periods 8.75206 8.53020 7.72173 7.36009 If Everhart Corporation uses the effective interest method to amortize any premiums or discounts on their
outstanding bonds, what will be the journal entries to record interest expense for calendar year 2013?
Answer:
Interest expense 2894.7 debit
discount on Bonds Payable 394.7 credit
cash 2500 credit
Interest expense 2906.55 debit
discount on Bonds Payable 406.55 credit
interest payable 2500 credit
Explanation:
We have to solve for the 2013 year which is one year after the issuance ofthe bonds.
We solve for the bond issuance price and then, we construct the bonds schedule and take the numbers from period 3 and 4.
Issuance proceeds: present value fo the coupon payment and maturity at market rate:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 2,500.000
time 10
rate 0.03
[tex]2500 \times \frac{1-(1+0.03)^{-10} }{0.03} = PV\\[/tex]
PV $21,325.5071
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 100,000.00
time 10.00
rate 0.03
[tex]\frac{100000}{(1 + 0.03)^{10} } = PV[/tex]
PV 74,409.39
PV c $21,325.5071
PV m $74,409.3915
Total $95,734.8986
Now we will calcautlethe interest expense by multiplying carrying value by the market value and sutract from the cash outlay to determinate the amortization on the bonds.
Conley Company has fixed costs of $23,415,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow:
Product Selling Price Variable Cost per Unit Contribution Margin per Unit Yankee $295 $120 $175 Zoro 235 160 75 The sales mix for products Yankee and Zoro is 30% and 70%, respectively. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet
Determine the break-even point in units of Yankee and Zoro of the overall (total) product, E. If required, round your answers to the nearest whole number.
Answer:
Yankee = 66,900 units
Zoro = 156,100 units
Explanation:
Break Even Point = Fixed Costs / Contribution per unit
= $23,415,000 / ((3×$175) + (7×$75))
= $23,415,000 / $1,050
= 22,300
Yankee = 22,300×3
= 66,900
Zoro = 22,300×7
= 156,100
Which of the following actions are likely to reduce the length of a company’s cash conversion cycle? Select one: a. Adopting a new inventory system that reduces the inventory conversion period. b. Reducing the average days sales outstanding (DSO) on its accounts receivable. c. Reducing the amount of time the company takes to pay its suppliers. d. Statements a and b are correct. e. All of the statements above are correct.
Answer:
e. All of the statements above are correct.
Explanation:
Cash Conversion Cycle Duration Significance
The greater the quantity of inventory the company purchases, the less cash it has on hand to pay bills. The more days a company's money is tied up in inventory, the longer the cash conversion cycle and the greater the number of days creditors must wait for their money.
Sufficient cash flow is incredibly important to the success of your business. It’s a critical metric in business health. The amount of available cash your business has on hand at any given time affects both your daily and long-term operations. Poor cash flow makes your day-to-day business operations more challenging and it also negatively affects your timeline on paying creditors.
Fortunately, there are ways to shorten your cash conversion cycle. Reducing the cycle length can even boost your bottom line through interest savings. This are the few ways:
1. Improve Your Cash Flow Management
2. Collect Your Accounts Receivables Faster
3. Manage your inventory more efficiently
4. Improve Your Accounts Receivables Process
5. Take advantage of your bank’s treasury management service
g Alphabet Co. uses activity-based costing. The company manufactures two products, Product A and Product B. There are three activity cost pools, with estimated costs and expected cost driver quantities as follows: Activity 1 cost pool has estimated overhead of $18,000. The expected cost driver quantity of Product A is 500 and Product B is 400. Activity 2 cost pool has estimated overhead of $21,000. The expected cost driver quantity is 1,000 for Product A and 500 for Product B. Activity 3 cost pool has estimated overhead of $32,000. The expected cost driver quantity is 300 for Product A and 200 for Product. What is the pool rate for Activity 1
Answer:
Activity 1 rate driver= $20 per driver
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers.
Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
Activity rate per driver is calculated as:
Activity overhead for the period / Total cost drivers for the period
Activity 1 overhead = $18,000
Total expected cost drivers for activity 1 = 500 +400 = 900
Overhead rate per cost driver
= $18,000/900 hours
= $20 per driver
Your company's human resource manager is away from the office on vacation, and you have four open positions to fill in your department. Which of the following tests should you choose if you want to engage applicants in a conversation to determine if they have good communication skills?a. An employment testb. An online checkc. An interviewd. An application form
Answer:
An interview
Explanation:
Job interviewing is one of the most common methods companies use to recruit new candidates. The interview involves a conversation between prospective candidates and recruiting firm members, usually one candidate at a time. However, there may be one or more members of the interview panel. Through the interview, the candidate's communication skills can be tested as there is an interaction between the interviewer and the interviewerAssume that the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the world portfolio is 17.1%, and the correlation between the U.S. and nonU.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the nonU.S. portfolio. What is the standard deviation of your portfolio?
Answer:
15.5%
Explanation:
The computation of the standard deviation of your portfolio is shown below:
Standard deviation of portfolio = weight of US Market portfolio ^2 × Standard deviation of US Market portfolio ^2 + weight of Non US Market portfolio^ 2 × Standard deviation of Non US Market portfolio^2 + 2 × weight of US Market portfolio × weight of Non US Market portfolio × Standard deviation of US Market portfolio × Standard deviation of Non US Market portfolio × correlation
= [0.25^2 × 18.2^2 + 0.75^2 × 17.1^ 2 + 2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47]
= (0.0625 × 331.24 + 0.5625 × 292.41 + 54.852525
= 20.7025 + 164.480625 + 54.852525
= 240.03565
Now take the square root of 240.03565 i.e 15.5%
We simply applied the above formula
b) The standard deviation of the portfolio is approximately 15.5%.
To find the standard deviation of a portfolio with multiple assets, you can use the formula for the standard deviation of a two-asset portfolio:
σp = √[(w₁² × σ₁²) + (w₂² × σ₂²) + (2 × w₁ × w₂ × σ₁ × σ₂ × ρ₁₂)]
Where: σp = standard deviation of the portfolio, w₁ and w₂ = weights of the assets in the portfolio, σ₁ and σ₂ = standard deviations of the assets, and ρ₁₂ = correlation between the assets.
Given: σ₁ (U.S.) = 18.2%, σ₂ (Non-U.S.) = 17.1%, ρ₁₂ = 0.47, w₁ = 0.25, w₂ = 0.75
Plugging in the values:
σp = √[(0.25² × 18.2²) + (0.75² × 17.1²) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]
= √[(0.0625 × 331.24) + (0.5625 × 292.41) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]
= √[20.7025 + 164.10525 + 54.78585]
= √[239.5936]
≈ 15.48%
Therefore, the standard deviation of the portfolio is approximately 15.5% (closest to option b).
Complete question
Assume the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the non-U.S. portion of the world portfolio is 17.1%, and the correlation between the U.S. and non-U.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the non-U.S. portfolio. What is the standard deviation of your portfolio?
a) 16.7%
b) 15.5%
c) 17.1%
d) 18.6%
Abe Frill wants to attend AVP Tech. He will need to have $15,000 seven years from today. How much should Abe put in the bank today (12% quarterly) to reach his goal in the future?
Answer:
$6,556.15
Explanation:
The calculation of Initial Deposit Required is shown below:-
Future value required = Present value × (1 + Rate of interest ÷ Quarterly)^Time period
15,000 = Present value(1 + 0.12 ÷ 4)^7×4
15,000 = Present value(1 + 0.12 ÷ 4)^28
Present value = $6,556.15
Therefore, for computing the initial deposit required simply we applied the above formula and the initial deposit required = $6,556.15.
The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500. Based on this information, what amount of office supplies was purchased during the year
Answer:
Purchases= $3,200
Explanation:
Giving the following information:
The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500.
To calculate the number of purchases, we need to use the following formula:
Purchases= expense of the year + ending balance - beginning balance
Purchases= 3,500 + 500 - 800= $3,200
Between projects A and B, project A will be considered a superior financial undertaking if it has:
a. A shorter payback period than project B.
b. A lower net present value than project B.
c. A lower average rate of return than project B.
d. A longer payback period than project B.
Answer:
A. a shorter payback period than project B.
Explanation:
Payback period is the period when the investment value is fully recovered through the business.
Hence the shorter the payback period, the better it is because this means that the return on investment in earned at a greater pace.
Hope this clear things up.
Good luck.
A stock is expected to pay dividends of $1.00, $0.75 and $2.00 for the next 3 years, respectively. After that time, dividends are expected to grow at a constant rate of 6% indefinitely. The required return on the stock is 10% during the non-constant growth period and 8% afterwards. Compute the fair market value of the stock today.
Answer:
The fair market value of the stock today is $82.67
Explanation:
The fair value of the stock can be calculated using the dividend discount model which bases the value or fair price of a stock today based on the present value of the expected future dividends from the stock. The dividends are discounted to the present value using an appropriate discount rate.
When the dividend growth rate of a stock becomes constant, we calculate the terminal value of the stock and discount it back too. The terminal value of the stock will be calculated at the end of year 3 using the required rate of return of 8% and will be discounted back 3 years to present value using the rate of 10%.
Thus, the price today of the given stock will be,
P0 = 1 / (1+0.1) + 0.75 / (1+0.1)^2 + 2 / (1+0.1)^3 +
[ (2 * (1+0.06) / (0.08-0.06)) / (1+0.1)^3 ]
P0 = $82.67
To compute the fair market value of the stock today, calculate the present value of the future dividends and the present value of the future stock price. The fair market value of the stock today is the sum of the present value of the dividends and the present value of the future stock price. The fair market value of the stock today is $82.7034.
Explanation:To compute the fair market value of the stock today, we need to calculate the present value of the future dividends and the present value of the future stock price. First, let's calculate the present value of the dividends for the next 3 years:
Year 1 dividend: $1.00 / (1 + 0.10)^1 = $0.9091Year 2 dividend: $0.75 / (1 + 0.10)^2 = $0.6198Year 3 dividend: $2.00 / (1 + 0.10)^3 = $1.5089Next, let's calculate the present value of the future stock price using the constant growth rate formula:
Future stock price = Year 4 dividend / (required return - growth rate) = $2.00 / (0.08 - 0.06) = $100
Finally, let's calculate the present value of the future stock price:
Present value of future stock price = $100 / (1 + 0.08)^3 = $79.6656
The fair market value of the stock today is the sum of the present value of the dividends and the present value of the future stock price:
Fair market value of the stock today = $0.9091 + $0.6198 + $1.5089 + $79.6656 = $82.7034
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Listed below are selected transactions from a Loudon County Debt Service Fund (all amounts are in thousands of dollars).
1. The remaining funds of a Capital Projects Fund, $2,000, were transferred to the Debt Service Fund to be used in the repayment of debt and interest on that debt that was issued to finance and expansion of the transit system.
2. The county General Fund transferred $9,200 to the Debt Service Fund to provide financing for principal, interest, and fiscal agent fees for debt service transactions during the year. $6,700 of the transfer from the General Fund and all of the transfer from the CPF were invested.
Record the above transactions in the Debt Service Fund.
Answer:
LOUDON DEBT SERVICE FUND
Debit Service Fund Account
Capital project fund $2,000,000
County General fund 9,200,000
Investment 6,700,000
Balance c/d 4,500,000 -
11,200,000 11,200,000
Explanation:
Which statement is true regarding a foreign currency option? Multiple Choice A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future. A foreign currency option gives the holder the obligation to only sell foreign currency in the future. A foreign currency option gives the holder the obligation to only buy foreign currency in the future. A foreign currency option gives the holder the right but not the obligation to buy or sell foreign currency in the future. A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future at the spot rate on the future date.
Answer: A foreign currency option gives the holder the right but not the obligation to buy or sell foreign currency in the future
Explanation:
A currency option which is also referred to as the forex option is a contract which gives the buyer the right, but not obligated to purchase or sell a particular currency at an exchange rate on or before a particular date.
Currency options is a common way for individuals, corporations, or financial institutions to curtail adverse movements in the exchange rates.
White company had no investments prior to the current year. It had the following transactions involving short-term available-for-sale and held-to-maturity securities during the year. Prepare journal entries to record the following transactions associated with the investment purchases. January 10 Purchased 6,000 shares of Gray Company stock at $15.00 plus a broker's fee of $700. (Classified as short-term available-for-sale securities) June 1 purchased $180,000 of Duke Company 4%, five-year bonds at par value. Interest payments are paid semiannually on June 1 and December 1. (Classified as held-to- maturity) July 1 Sold 3,000 shares of Gray company stock at $22 less a $600 brokerage fee. December 1 Received a check for the first semiannual interest payment on the Duke Company bonds. Answer (show calculations in description of JE when appropriate) Date Description DR CR Jan. 10 June 1 July 1 Dec. 1
Answer:
Gray stocks 90,700 debit
Cash 90,700 credit
Duke- Bond 180,000 debit
Cash 180,000 credit
Cash 65,400 debit
Gray stocks 45,350 credit
Gain on Securities 20,050 credit
Dec 1st
Cash 3,600 debit
Interest revenue 3,600 credit
Explanation:
Jan 10th
6,000 x $15 + 700 fee = $90,700
June 1st we record at cost as it was purchase at par.
July 1st
3,000 x $22 - 600 fee = $65,400
Cost: 90,700 x 3,000/6,000 = 45,350
Gain 65,400 - 45,350 = 20.050
December 1st
180,000 x 0.02 = $3,600
the rate is 4% payment semiannually so we divide the rate by 2.
The following information is for a collateralized mortgage obligation (CMO). Tranche A of $50 million receives quarterly payments at 9 percent per year, tranche B of $100 million receives quarterly payments at 10 percent per year, and tranche C of $50 million receives quarterly payments at 11 percent per year.If at the end of the first quarter, the CMO trustee receives total cash flows of $8 million, how are they distributed among the three tranches? (0.2 points)5. What is the principal outstanding on Tranche A, Tranche B, and Tranche C after the end of year payment in the previous question? (0.2 points)
BCD Partnership plans to distribute cash of $20,000 to partner Brad at the end of the taxyear. BCD reported a loss for the year, and Brad’s share of the loss is $10,000. At thebeginning of the tax year, Brad’s basis in his partnership interest, including his share ofpartnership liabilities, was $15,000. BCD expects to report substantial income in futureyears.• What rules are used to calculate Brad’s ending basis in his partnership interest?• How much gain or loss will Brad report for the tax year?• Will the deduction for the $10,000 loss be suspended?• Could any planning opportunities be used to minimize any negative taxramifications of the distribution
Answer:
The rules used to calculate brad's ending basis in his partnership interest is called Ordering rules., and his gain for the tax year report is $ 5,000. the loss for $10,000 can be suspended or put on hold.
Explanation:
From the above question, we resolve the following.
Question 1: What rules are used to calculate Brad’s ending basis in his partnership interest
Explanation: The rules used here is called the Ordering rules. or refers to reduce basis by distributions; increase basis by income items and contributions; and then losses deducted to the extent of remaining basis
Question 2: How much gain or loss will Brad report for the tax year
Explanation: For he tax year report the gain is $ 5,000 gain
Question 3: Will the deduction for the $10,000 loss be suspended
Explanation: Yes loss of $ 10,000 is to be suspended because losses cannot be deductible to pay off shareholders.
Question 4: Could any planning opportunities be used to minimize any negative tax ramifications of the distribution
Explanation: Yes there are planning opportunities to minimize negative tax ramifications of the distribution are as under tax diversification: which means diversifying investments in different types of accounts can diversify tax risk and create more flexibility to optimally select the most tax efficient method of liquidating assets.
Michael's, Inc., just paid $2.00 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 4.4 percent. If you require a rate of return of 8.6 percent, how much are you willing to pay today to purchase one share of the company's stock?
Answer:
$49.71
Explanation:
The computation of the willing to pay for the company stock is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $2 + $2 × 4.4%
= $2 + 0.088
= $2.088
The required rate of return is 8.6% and the growth rate is 4.4%
So, the price of one share of the company stock is
= $2.088 ÷ (8.6% - 4.4%)
= $2.088 ÷ 4.2%
= $49.71
We simply applied the above formula
The net income for Martinez Company for 2020 was $305,900. During 2020, depreciation on plant assets was $120,200, amortization of patent was $39,400, and the company incurred a loss on sale of plant assets of $23,500. Compute net cash flow from operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
$489,000
Explanation:
Martinez Company
Computation of net cash flow from operating activities for 2010
Details Amount ($)
Net income 305,900
Non-cash expenses adjustment:
Plant depreciation 120,200
Patent amortization 39,400
Loss on sale of plant assets 23,500
Net cash flow from operating activities 489,000
A tornado struck the only manufacturing plant of Toledo Farm Implements (TFI) on June 1. All work-in-process inventory was destroyed, but a few records were salvaged from the wreckage and from the company's headquarters. If acceptable documentation is provided, the loss will be covered by insurance. The insurable value of work-in-process inventory consists of direct materials, direct labor, and applied overhead. The following information about the plant appears on the April financial statements at the company's downtown headquarters: Materials inventory, April 30 $ 98,000 Work-in-process inventory, April 30 172,400 Finished goods inventory, April 30 64,000 Cost of goods sold through April 30 697,200 Accounts payable (materials suppliers), April 30 43,200 Manufacturing overhead through April 30 369,800 Payroll payable, April 30 0 Withholding and other payroll liabilities, April 30 19,400 Overhead applied through April 30 359,200 A count of the inventories on hand May 31 shows the following: Materials inventory $ 86,000 Work-in-process inventory
Required:
Determine the cost of the work-in-process inventory lost in the disaster.
Calculating the lost WIP inventory involves starting with the April 30 WIP value, adding May's manufacturing costs, and subtracting any remaining inventory. Without complete data, an exact calculation isn't possible, and TFI must work with their insurer to estimate the loss.
Explanation:To determine the cost of the work-in-process (WIP) inventory lost in the disaster at Toledo Farm Implements (TFI), we need to calculate the WIP as of May 31. This is done by adding the beginning WIP inventory to the total manufacturing costs incurred during the month (materials used, direct labor, and overhead applied) and then subtracting the ending WIP inventory (if any).
Starting with the WIP inventory as of April 30, which was $172,400, we then add the costs of materials used, direct labor, and manufacturing overhead applied during May. The value of materials used can be calculated by taking the beginning materials inventory, adding purchases (which can be calculated by the change in accounts payable if that represents solely material purchases), and then subtracting the ending materials inventory. The exact amount of materials purchased is not provided, but if we assume all accounts payable were for materials, purchases would be the change in accounts payable plus the materials used during May. We need additional data for direct labor costs and actual overhead costs for May to make a complete calculation, but we know the applied overhead figure is $359,200 as of April 30.
The missing figures make it impossible to calculate the exact loss without assumptions or additional data. If such data is unattainable, TFI should consult with their insurer on an estimation method acceptable for the insurance claim.
Your grandmother left you $90,000 that you'll receive when you turn 40 in 18 years. Since you'd rather have some money now, you want to sell your claim to the inheritance. Attempt 1/10 for 10 pts. Part 1 What is the minimum amount that you should sell your claim for now if the interest rate is 5%
Answer:
The minimum amount to sell the claim is =$37,396.85
Explanation:
The minimum amount is the present value of the the expected future sum discounted at the rate of 5%.
PV = FV × (1+r)^(-n)
FV - 90,000, r- 5%, n- 18
= 90,000 × (1.05)^(-18)
= 37,396.85
The minimum amount to sell the claim is =$37,396.85
Final answer:
Calculate the minimum amount to sell your claim now using the present value formula at an interest rate of 5% for a $90,000 inheritance received in 18 years.
Explanation:
The present value formula can be used to calculate the minimum amount to sell your claim for now:
Present Value formula: PV = FV / (1 + r)^nGiven FV = $90,000, r = 5%, n = 18 yearsCalculating the present value:PV = $90,000 / (1 + 0.05)^18 = $90,000 / (1.05)^18 = $90,000 / 2.078928 = $43,222.96
So, the minimum amount you should sell your claim for now is approximately $43,222.96.
On November 30, Petrov Co. has $105,400 of accounts receivable and uses the perpetual inventory system. Dec. 4 Sold $6,505 of merchandise (that had cost $4,163) to customers on credit, terms n/30. 9 Sold $14,756 of accounts receivable to Main Bank. Main charges a 2% factoring fee. 17 Received $3,578 cash from customers in payment on their accounts. 27 Borrowed $8,432 cash from Main Bank, pledging $10,962 of accounts receivable as security for the loan. (1) Prepare journal entries to record the above transactions. (2) Which transaction would most likely require a note to the financial statements?
Answer:
1)Journal Entries are given below
2) November 27 requires notes to Financial Statements
Explanation:
1) Journal Entries :
DEBIT CREDIT
Nov-04 A/C RECEIVABLES 6505
SALES/REVENUE 6505
COST OF GOODS SOLD 4163
INVENTORY 4163
Nov-09 FEE EXPENSE FACTORING 295
CASH 14461
A/C RECEIVABLES 14756
Nov-17 CASH 3578
A/C RECEIVABLES 3578
Nov-27 CASH 8432
NOTES PAYABLES 8432
Nov-27 NO JOURNAL ENTRY REQUIRED
2) NOTES TO FINANCIAL STATEMENTS
AN AMOUNT OF $ 10962 OF A/C Receivable IS PLEDGED AS SECURITY FOR LOAN.