Answer:
The correct answer is letter "A": capital turnover or sales margin.
Explanation:
Return on Investment, or ROI, measures the amount of return on an investment relative to the cost of investment. The return of an investment is divided by its cost to calculate ROI. The result is expressed as a percentage or as a ratio. Investments with positive ROI are likely to be successful while those with negative figures are possible to end up in losses.
To increase a division's ROI, the firm can increase the capital turnover (capital assets that allow the company to profit) or the sales margin (the difference between costs and the net profit of selling a unit of a product).
A division's return on investment can be improved by increasing capital turnover or sales margin. Higher capital turnover indicates efficient use of capital to generate income, while higher sales margin indicates more profit made from sales.
Explanation:A division's return on investment (ROI) can be improved by increasing capital turnover or sales margin. ROI is a key performance metric used to measure the probability of gaining a return from an investment. It measures the efficiency of an investment or compares the efficiency of a number of different investments.
Capital turnover is the ratio of how capital is used to generate revenue. The higher the capital turnover ratio, the more effective a company is in using its capital to generate income. A high capital turnover can indicate higher ROI because it shows that the company is effectively using its capital.
On the other hand, sales margin, is the profit made from selling products or services after all costs associated with producing them are deducted. The higher the sales margin, the more profit per dollar of sales a company makes, and therefore, the higher the ROI.
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Which of the following is NOT a part of the business case for why companies should act in a socially responsible manner? A. Acting in a socially responsible manner is in the overall best interest of shareholders. B. Every business has a moral duty to be a good corporate citizen C. Acting in a socially responsible manner reduces the risk of reputation-damaging incidents. D. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage. E. Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).
Answer:
D
Explanation:
Final answer:
The correct answer is B. Every business has a moral duty to be a good corporate citizen.
Explanation:
The correct answer is B. Every business has a moral duty to be a good corporate citizen. The business case for why companies should act in a socially responsible manner includes several factors, such as:
Acting in a socially responsible manner is in the overall best interest of shareholder.Acting in a socially responsible manner reduces the risk of reputation-damaging incidents.To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.Acting in a socially responsible manner can generate internal benefits, such as employee recruiting, workforce retention, employee morale, and training costs.The idea that every business has a moral duty to be a good corporate citizen is not part of the business case for acting in a socially responsible manner. While businesses need to consider their impact on society, it is not necessarily a driving factor in the business case.
During the month of March, Oriole Company's employees earned wages of $80,000. Withholdings related to these wages were $6,120 for FICA, $9,600 for federal income tax, $4,000 for state income tax, and $480 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $800 for state unemployment tax. Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April.
Answer:
Oriole company
The wage earned by the employees is $80,000. However certain deductions need to be recognized and made payable to respective statutory institutions.
After deductions the Employee should receive $59,800 (80,000 - 6,120 - 9,600 - 4,000 - 480)
Journal entries
1.
Debit Wage Account with $59,800
Debit FiCA (Employee) Account with $6,120
Debit Fed. income Tax (Employee) Account with $9,600
Debit State Income Tax (Employee) Account with $4,000
Debit Union Deductions (Employee) Account with $480
Credit Wages Payable Account with $80,000
(Being Wages earned in March and its distribution between accruals to employee and accruals to statutory bodies)
2.
Debit Employer state unemployment taxes Account with $800
Credit Employer state unemployment taxes Payable Account with $800
(Being employer contribution to unemployment taxes in March)
The manager of the Beach Division of Treat Time is evaluating the acquisition of a new mobile ice cream server. The budgeted operating income of the Beach Division is currently $2,940,000 with total assets of $28,600,000 and noninterest-bearing current liabilities of $600,000. The proposed investment would add $18,000 to operating income and would require an additional investment of $120,000. The targeted rate of return for the Beach Division is 9 percent. Ignoring taxes, how much is the return on investment of the Beach Division if the ice cream server is not purchased?
Answer:
ROI = 10.5%
Explanation:
The ROI of a Division is the portion of then operating assets that is earned by as operating income by it. The higher the better.
Net operating assets = 28,600,000 - 600,000 = 28,000,000
ROI = Income/ Net operating assets × 100
ROI = 2,940,000/28,000,000 × 100
= 10.5%
Choose the statement that is correct. A. The MC curve intersects the AFC, AVC, and ATC curves at their minimums. B. Initially as output increases, average variable cost decreases, so average total cost decreases and the ATC curve slopes downward. Average fixed cost remains unchanged. C. The ATC curve eventually slopes upward because average variable cost eventually increases. D. An increase in output always increases average total cost.
Answer: C. The ATC curve eventually slopes upward because average variable cost eventually increases
Explanation:
The Law of Diminishing Marginal Returns causes the Average Total Cost curve to eventually slope upwards because the Average Variable Cost will increase.
Why?
At first, with production increasing, a firm will be very efficient at producing a certain good thereby driving the cost down per unit. As time goes on however, the law of Diminishing Marginal Returns comes into play as more is invested into the business. The cost per unit will therefore rise which will lead to the ATC curve going upwards.
I have included a simple graph to illustrate.
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Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $17,500 in 2016 for adoption-related expenses. The adoption was finalized in early 2017. Marsha received $3,600 of employer-provided adoption benefits. For question a) assume that any adoption credit is not limited by modified AGI or by the amount of tax liability.
A. What amount of adoption credit, if any, can Niles and Marsha take in 2017? $9,970
B. Using the information in question a), assume that their modified AGI was $222,000 in 2017. What amount of adoption credit is permitted in 2017? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)
Answer:
A) the adoption credit for 2017 was $13,570 per child. This credit applies only to adoption processes finalized during that year. This case applies since the adoption process was started in 2016 but ended in 2017.
total adoption credit = $13,570 - $3,600 received in benefits from employer = $9,970
B) the phase out range in 2017 was $203,540–$243,540. Since their income was $222,000, their adoption credit will phase out proportionally by = ($222,000 - $203,540) x ($13,570 / $40,000) = $18,460 x 0.33925 = $6,263
So the adoption tax credit = $13,570 - $6,263 = $7,307
Final answer:
Niles and Marsha can claim a $13,900 adoption credit if it is not limited by their AGI or tax liability. For a modified AGI of $222,000, the credit would begin to phase out, requiring further information for an exact calculation.
Explanation:
When answering part A, if the adoption credit is not limited by modified AGI or tax liability, Niles and Marsha can claim the full amount of their adoption-related expenses as a credit. Given that they have $17,500 in adoption expenses and received $3,600 in employer-provided adoption benefits, they can claim the remaining expenses of $13,900 as an adoption credit.
For part B, since Niles and Marsha have a modified AGI of $222,000 in 2017, their adoption credit begins to phase out. According to the tax brackets provided, their income places them in the range where the credit begins to phase out (phased-out adoption credit). The phase-out amount and the resulting adoption credit they can claim would require additional tax calculation information that has not been provided. Typically, for these calculations, one would need to refer to the specific IRS adoption credit phase-out rules and limits for the year 2017.
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $67, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million, a coupon rate of 7 percent, and sells for 92 percent of par. The second issue has a face value of $45 million, a coupon rate of 6 percent, and sells for 104 percent of par. The first issue matures in 22 years, the second in 7 years. Both bonds make semiannual coupon payments. a. What are the company's capital structure weights on a book value basis
Answer:
The company's capital structure weights on a book value basis are:
a. 28.57% for equity, and
b. 71.43% for debt.
Explanation:
Book value of equity = 7,000,000 * $6 = $42,000,000
Book value of debts = $60,000,000 + $45,000,000 = $105,000,000
Dinklage Corp.'s total value = $42,000,000 + $105,000,000 = $147,000,000
Book value weights of equity = $42,000,000 / $147,000,000 = 0.2857, or 28.57%
Book value weights of debt = = 1 - 0.2857 = 0.7143, or 71.43%
Therefore, the company's capital structure weights on a book value basis are 28.57% for equity and 71.43% for debt.
To calculate the capital structure weights on a book value basis, multiply the number of shares of common stock by the book value per share and the face value of each bond by the number of bonds outstanding. Then divide the book value of each component by the total book value of the company's capital structure to determine the weights.
Explanation:To calculate the capital structure weights on a book value basis, we need to determine the book value of the company's common stock and its outstanding bonds. The book value of the common stock is found by multiplying the number of shares outstanding by the book value per share. The book value of the bonds is the face value of each bond multiplied by the number of bonds outstanding. To calculate the weights, divide the book value of each component by the total book value of the company's capital structure.
The book value of the common stock is $42 million (7 million shares x $6 per share).The book value of the first bond issue is $55.2 million ($60 million x 0.92).The book value of the second bond issue is $46.8 million ($45 million x 1.04).The total book value of the company's capital structure is $144 million ($42 million + $55.2 million + $46.8 million).
The capital structure weights on a book value basis are:
Common stock: 29.17% ($42 million / $144 million)First bond issue: 38.33% ($55.2 million / $144 million)Second bond issue: 32.50% ($46.8 million / $144 million)Learn more about Capital structure weights here:https://brainly.com/question/36197017
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Suppose Stanley's Office Supply purchases 50,000 boxes of pens every year. Ordering costs are $100 per order and carrying costs are $0.40 per box. Moreover, management has determined that the EOQ is 5,000 boxes. The vendor now offers a quantity discount of $0.02 per box if the company buys pens in order sizes of 10,000 boxes. Determine the before-tax benefit or loss of accepting the quantity discount. (Assume the carrying cost remains at $0.40 per box whether or not the discount is taken. And a hint: C*P
Answer:
The Before Tax benefit = 500 USD
Explanation:
Data Given:
Purchase = 50,000 boxes
Ordering Cost = 0.40 USD per box
EOQ = 5000 boxes = Economic Order Quantity
Vendor Offer = 0.02 USD per Box for the order size of 10,000 boxes.
Our EOQ is 5000:
So, first find costs associated without the offer.
Ordering Cost = (50000/5000) x 100 = 1000 USD
Carrying Cost = (5000/2) x 0.4 = 1000 USD
Total cost before accepting the offer = 1000 + 1000 = 2000 USD
Now, let's find the costs associated with offer accepted.
Ordering Cost = (50000/10000) x 100 = 500 USD
Carrying Cost = (10000/2) x 0.4 = 2000 USD
Total Cost = 2500 USD
Cost Saved from Discount = 50000 x 0.02 = 1000 USD
So, Total after accepting the offer = 2500 USD - 1000 USD
Total after accepting the offer = 1500 USD
So, the Before Tax benefit = 500 USD
The before-tax benefit of accepting the quantity discount is $15,900.
Explanation:The before-tax benefit or loss of accepting the quantity discount can be calculated by comparing the costs of ordering and carrying inventory for both scenarios: with and without the discount. Without the discount, the ordering cost for 50,000 boxes of pens is $100. The carrying cost per box is $0.40, so the carrying cost for 50,000 boxes is $20,000. With the discount, the ordering cost for 10,000 boxes of pens is $100, and the carrying cost for 10,000 boxes is $4,000. Therefore, the before-tax benefit of accepting the quantity discount would be the difference between the costs of both scenarios: ($100 + $20,000) - ($100 + $4,000) = $15,900.
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"Division A, which is operating at capacity, produces a component that currently sells in a competitive market for $25 per unit. At the current level of production, the fixed cost of producing this component is $8 per unit and the variable cost is $10 per unit. Division B would like to purchase this component from Division A. The price that Division A should charge Division B for this component is:"
Answer:
$25 per unit
Explanation:
Data provided in the question
Selling price per unit = $25
Fixed cost per unit = $8
Variable cost per unit = $10
Based on the above information, the price that division A should charged from Division B is equal to the selling price per unit i.e $25 because Division A currently sells and operates in a competitive market so it should be same for division B
g"Which of the following statements is true about minimum wage laws? Select Answer A. Minimum wage laws are a successful tool to lift people out of poverty. B. Minimum wage laws encourage employers to hire unskilled labor. C. A minimum wage law set above the equilibrium wage will not affect the labor market. D. All of the above are true. E. None of the above are true."
Answer:
The correct the answer is A. Minimum wage laws are a successful tool to lift people out of poverty.
Explanation:
The minimum wage laws are established to ensure that the employees are not exploited and that they receive a fair amount of pay to ensure a proper standard of living. This however, does not encourage employers to hire unskilled labor and minimum wages affects the labor market.
An industry has 1000 competitive firms, each producing 50 tons of output. At the current market price of $10, half of the firms have a short-run supply curve with a slope of 1; the other half each have a short-run supply curve with slope 2. The short-run elasticity of market supply is:A) 1/50
B) 3/10
C) 1/5
D) 2/5
E) none of the above
Final answer:
The short-run elasticity of market supply is calculated based on the given slopes of supply curves and the price increase from $10 to $11. It is found to be a 3% increase in quantity divided by a 10% increase in price, which equals an elasticity of 3/10.
Explanation:
The question involves calculating the short-run elasticity of market supply for a competitive industry. Elasticity measures responsiveness of quantity supplied to a change in price. In this case, we want to determine the elasticity given that half of the firms have a supply curve slope of 1, and the other half have a slope of 2, when the output changes from 50 tons at $10 to an unknown quantity at $11. We use the formula for elasticity, which is the percentage change in quantity supplied divided by the percentage change in price. Since we are given the slopes of supply curves instead of specific quantities, we'll consider hypothetical quantities to calculate the elasticity.
Let's assume an increase in price from $10 to $11, a 10% increase. For firms with a slope of 1, for every $1 increase in price, the quantity increases by 1 ton. For firms with a slope of 2, for every $1 increase, the quantity increases by 2 tons. Since the increase is $1 for both, we can add up the individual increases:
Firms with slope 1: 500 firms x 1 ton = 500 tons
Firms with slope 2: 500 firms x 2 tons = 1000 tons
Total increase in quantity = 1500 tons
The initial total quantity supplied is 50 tons x 1000 firms = 50,000 tons. A 1500 ton increase on 50,000 is a 3% increase. The elasticity of supply is then:
(3% increase in quantity) / (10% increase in price) = 0.3 or 3/10
Jennifer Baskiter is president and CEO of Plants&More, an Internet company that sells plants and flowers. The success of her startup Internet company has motivated her to expand and create two divisions. One division focuses on sales to the general public and the other focuses on business-to-business sales to hotels, restaurants, and other firms that want plants and flowers for their businesses. She is considering using a return on investment as a means of evaluating her divisions and their managers. She has hired you as a compensation consultant. What issues or concerns would you raise regarding the use of ROI for evaluating the divisions and their managers?
Answer:
Evaluating Divisional Managers on the basis of ROI may not be goal congruent.
Explanation:
While Return On Investment (ROI) is a common denominator for comparing the returns of dissimilar business or divisions, it has its demerits.
A problem exists when this measure is used to evaluate performance of divisional managers. Evaluating Divisional Managers on the basis of ROI may not be goal congruent.
Divisional Managers will accept or not accept projects in their best interest if new projects does not result in greater ROI than the previous,leaving or ignoring the company interest.
Weisbro and Sons common stock sells for $40 a share and pays an annual dividend that increases by 5.2 percent annually. The market rate of return on this stock is 9.2 percent. What is the amount of the last dividend paid by Weisbro and Sons
Answer:
$1.52
Explanation:
We know,
Current stock price, [tex]P_{0}[/tex] = [tex]\frac{D_{1}}{r_{s} - g}[/tex]
Given,
Market rate of return, [tex]r_{s}[/tex] = 9.2% = 0.092
Growth rate, g = 5.2% = 0.052
Expected dividend, [tex]D_{1}[/tex] = [tex]D_{0}[/tex] × (1 + g)
Current stock price, [tex]P_{0}[/tex] = $40
Putting the values into the above formula, we can get,
$40 = [[tex]D_{0}[/tex] × (1 + g)] ÷ [([tex]r_{s} - g[/tex])]
or, $40 = [[tex]D_{0}[/tex] × (1 + 0.052)] ÷ (0.092 - 0.052)
or, $40 = ([tex]D_{0}[/tex] × 1.052) ÷ 0.04
or, $40 = [tex]D_{0}[/tex] × 26.3
or, [tex]D_{0}[/tex] = $40 ÷ 26.3
Therefore, last dividend paid by the company, [tex]D_{0}[/tex] = $1.52
Final answer:
Using the dividend discount model formula, the last dividend paid by Weisbro and Sons was calculated to be approximately $1.52.
Explanation:
The question is seeking to determine the last dividend paid by Weisbro and Sons using the given stock price, the growth rate of the dividend, and the market rate of return. To find the amount of the last dividend (D₀) paid, we can use the dividend discount model (also called the Gordon growth model), which states that the price of a stock (P) is equal to the dividend one year from now (D₁) divided by the discount rate (r) minus the dividend growth rate (g). The formula is P = D₁ / (r - g).
Since we have the stock's selling price (P), the dividend growth rate (g), and the market rate of return (r), we need to rearrange the formula to solve for D₁ and then find D₀. Beginning with the formula:
P = D₁ / (r - g)
Multiplying both sides by (r - g) gives us:
D₁ = P * (r - g)
Since D₁ equals D₀ * (1 + g) (because D₁ is the dividend that will be paid next year, which is the dividend that was paid this year (D₀) grown by the rate g), we can rearrange to find D₀:
D₀ = D₁ / (1 + g)
Replacing D₁ with the expression P * (r - g) from the previous step gives us:
D₀ = (P * (r - g)) / (1 + g)
Plugging in the values we have:
D₀ = ($40 * (0.092 - 0.052)) / (1 + 0.052)
D₀ = ($40 * (0.04)) / (1.052)
D₀ = $1.52 approximately.
Thus, the last dividend (D₀) paid by Weisbro and Sons was around $1.52.
The neighborhood ice cream shop finds that when it charges $3 per ice cream cone, its total revenues are $90,000. It has total variable costs of $30,000 and total fixed costs of $40,000. From this we can infer the:a. shop should be moved because the rent is too high.
b. price is less than average total cost.
c. economic profits are $20,000.
d. shop will be closed in the long run.
e. shop sells 10,000 ice cream cones.
Answer:
The correct answer is Option C.
Explanation:
Economic profit is simply the difference between the total revenue generated from the sale of an output minus the opportunity cost and all costs used in the production of that output.
The costs used in the production of that output are regarded as explicit costs.
Opportunity cost is subjective and judgemental and usually determined by management.
Based on the question, the Economic cost = Total revenue - Total variable cost - Total fixed cost
Economic cost = $90,000 - $30,000 - $40,000 = $20,000
The following is a list of characteristics that describe a firm operating under monopolistic competition. Indicate whether these characteristics occur in the short run, the long run, or both.1. The firm produces a differentiated product. 2. The firm maximizes profits. 3. The firm earns zero economic profit. 4. All factors of production (inputs) are variable. 5. At least one factor of production (an input) is fixed. 6. The LRATC curve is tangent to the demand curve. 7. The price charged to consumers is higher than marginal cost.
Answer: 1. Both Short Run and Long Run
2. Both Short Run and Long Run
3. Long Run
4. Long Run
5. Short Run
6. Long Run
7. Both Short Run and Long Run
Explanation:
In Economics, the Short run refers to a period where wages and prices of other inputs are considered inflexible or rather hard to change whereas in the LONG RUN, these same inputs can be adjusted because they have had time to adjust.
In the both the Short and the Long Run, a company is capable of producing a differentiated product as well as maximising profit through MR=MC.
A firm can only however earn zero Economic profit in the long run as other firms come into the market and competition reaches its peak level.
It is also only in the Long Run that all factors of production are variable because they have time to adjust and adapt.
It is only in the Short run that at least one input is fixed. In the long run, all factors are variable.
In both the long and short run, the price charged to consumers can be higher than the Marginal Cost.
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Answer:
A firm operating under monopolistic display certain characteristics short run which changes in the long run.
Explanation:
1. The firm produces a differentiated product in the short run.
2. The firm maximizes profits in the short run.
3. The firm earns zero economic profit in the Long run.
4. All factors of production (inputs) are variable in the short run.
5. At least one factor of production (an input) is fixed in the long run.
6. The LRATC curve is tangent to the demand curve in the long run.
7. The price charged to consumers is higher than marginal cost in the long run.
Blossom Company incurs these expenditures in purchasing a truck: cash price $20,000, accident insurance (during use) $1,500, sales taxes $1,100, motor vehicle license $200, and painting and lettering $1,600. What is the cost of the truck
To calculate the cost of the truck, making sure to include all expenditures related to the purchase, we add together the cash price, accident insurance, sales taxes, motor vehicle license, and painting and lettering costs. This results in a total cost of $24,400 for the Blossom Company to purchase the truck.
Explanation:The cost of the truck for the Blossom Company incorporates several factors. These factors include the cash price of the truck, accident insurance, sales taxes, motor vehicle license, and painting and lettering. In your case, we'll add all these expenditures together to find the total cost of the truck.
The cash price of the truck is $20,000.Accident insurance during the truck's use is $1,500.Sales taxes paid amounted to $1,100.The cost of the motor vehicle license was $200.Finally, the cost for painting and lettering amounted to $1,600.To calculate the total, you simply add these costs together, i.e., $20,000 + $1,500 + $1,100 + $200 + $1,600 which results in a total cost of $24,400.
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The cost of the truck for Blossom Company, including all associated expenditures, is $24,400.
Here's a breakdown of the expenditures and how they contribute to the total cost:
1. Cash price of the truck: $20,000
- This is the base cost of acquiring the truck.
2. Accident insurance during use: $1,500
- This expenditure directly relates to ensuring the truck against accidents during its operational use.
3. Sales taxes: $1,100
- These are taxes paid on the purchase of the truck, typically calculated as a percentage of the purchase price.
4. Motor vehicle license: $200
- This is the fee paid to legally register and license the truck for road use.
5. Painting and lettering: $1,600
- This expenditure is for customizing the truck with painting and lettering, likely for identification or branding purposes.
To find the total cost of the truck, we sum up all these expenditures:
[tex]\[ \text{Total Cost of the Truck} = \text{Cash Price} + \text{Accident Insurance} + \text{Sales Taxes} + \text{Motor Vehicle License} + \text{Painting and Lettering} \][/tex]
[tex]\[ \text{Total Cost of the Truck} = \$20,000 + \$1,500 + \$1,100 + \$200 + \$1,600 \][/tex]
[tex]\[ \text{Total Cost of the Truck} = \$24,400 \][/tex]
A preferred stock has a face value of $100 and pays annual dividends at a rate of 8 percent. The required rate of return on this stock is 12 percent. What is the price of this security if the next dividend is paid in exactly one year?
Answer: $66.67
Explanation:
The value of a Preferred Stock is calculated with the following formula,
Value of the preferred stock = Annual Dividend/rate of return
The Annual Dividend is 8% of the face value so,
= 0.08 * $100
= $8
Therefore the Value of the Stock is,
= 8/0.12
= $66.67
Answer: $66.67
Explanation:
GIVEN the following ;
Face value of preferred stock = $100
Dividend rate per annum = 8% = 0.08
Required rate of return = 12% = 0.12
Price of stock if Dividend is paid in exactly one year =?
Price of stock = ( Dividend ÷ Rate of return)
Dividend = (annual dividend rate × face value of stock)
Dividend = 0.08 × $100 = $8
Price of stock = ($8 ÷ 0.12)
Price of stock = $66.667
Therefore price of security if Dividend is paid in exactly one year = $66.67
(Measuring growth) If Pepperdine, Inc.'s return on equity is 19 percent and the management plans to retain 61 percent of earnings for investment purposes, what will be the firm's growth rate?
Answer:
11.59% growth rate
Explanation:
This analysis is done in the SUSTAINABLE GROWTH RATE MODEL.
Pepperdine Incorporation's Return on Equity (ROE) is equal to 19%
Pepperdine Incorporation's Retention Ratio (RR) is equal to 61% of it's earnings.
This implies that Pepperdine Incorporation' retains 61% of income(earning) for investment purposes.
The firm's growth rate will be gotten from multiplying the ROE by the RR.
That is: 19% × 61% = 11.59%
That is the answer.
Return on Equity and Retention Rate are two indices used in growth rate measurement.
Pepperdine, Inc.'s growth rate is calculated by multiplying the return on equity (19%) by the retention ratio (61%), resulting in a growth rate of 11.59%.
Explanation:The student is asking about the growth rate of Pepperdine, Inc., which can be calculated using the retention ratio and return on equity (ROE). The growth rate formula in this context is the product of the retention ratio (the percentage of earnings retained after dividends are paid) and the ROE. Given that Pepperdine, Inc. has an ROE of 19% and plans to retain 61% of earnings, the firm's growth rate can be calculated as:
Growth Rate = Retention Ratio × Return on Equity
Growth Rate = 0.61 × 0.19 = 0.1159 or 11.59%
Therefore, Pepperdine, Inc.'s expected growth rate is 11.59%.
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On April 1, Robert LLC purchased two units of inventory, A and B. The cost of unit A was $650, and the cost of unit B was $625. On April 30, Robert LLC had not sold the inventory. The market value of unit A was now $685 while the market value of unit B was $550. The journal entry associated with the lower-of-cost-or-market method on April 30 will be:
Answer:
Debit : Cost of Goods Sold : $75
Credit : Inventory : $75
Explanation:
The lower-of-cost-or-market method is based on the conservative accounting theory. This is where company accounts are prepared with caution and verification. All losses are recorded as they are discovered whereas gains are recorded only after realised. In this case, there is a gain in Inventory A, hence it won’t be recorded as of yet. However, the value of Inventory B has reduced and this requires to be recorded.
The cost of Inventory B should be reduced to the lower net realizable value, hence it would be reduced by the difference : $625 - $550 = $75
Debit : Cost of Goods Sold : $75
Credit : Inventory : $75
A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant has a cost basis of $6,000 and a 10-year depreciable life. The estimated SV of the saw is zero at the end of 10 years. Use the DB method to calculate the annual depreciation amounts when:
(a) R = 2/N (200% DB method)
(b) R = 1.5/N (150% DB method)
Answer:
A) book value after 10 years = $644
depreciation after 10 years = $5356
B) book value after 10 years = $1181
depreciation after 10 years = $4819
Explanation:
cost basis =$6000
10 year depreciable life
SV after 10 years = 0
N = 10
A) Annual depreciation when R = 2/N ( 200% DB method )
year 1 : book value = $6000, R = 2/10 * 100
B) Annual depreciation when R = 1.5/N ( 150% DB method )
year 1: book value = $6000 , R = 1.5/10 * 100
attached to this is a tabular solution using the DB method
Final answer:
The annual depreciation amounts using the DB method for the electric saw can be calculated based on the given rates. For the 200% DB method, the annual depreciation amount is $1,200, and for the 150% DB method, it is $900.
Explanation:
To calculate the annual depreciation amounts using the declining balance (DB) method, we need to determine the depreciation rate (R) and apply it to the cost basis of the electric saw.
(a) For the 200% DB method, R = 2 / N, where N is the depreciable life of 10 years. So, R = 2 / 10 = 0.2.
Depreciation amount = R * Cost basis = 0.2 * $6,000 = $1,200 per year.
(b) For the 150% DB method, R = 1.5 / N, where N is still 10 years. So, R = 1.5 / 10 = 0.15.
Depreciation amount = R * Cost basis = 0.15 * $6,000 = $900 per year.
Policymakers in a small country impose a specific tariff of $2.00 per unit. Prior to the tariff the country imported 10,000 units and after the tariff 8,000 units. The redistributive effects of the tariff are:
Select one:
a. such that $16,000 is forward shifted onto domestic consumers.
b. impossible to determine with the information given.
c. shared equally between domestic producers and domestic consumers.
d. such that $4,000 is backward shifted onto domestic producers.
Answer:
Option A is the correct answer.
Explanation:
Redistribution effect is also referred to as the transfer effect.
Under the redistribution effect, the price level increases after exacting tariff, this, in turn, increases the producer surplus and decreases the consumer surplus.
Based on the given information tariff =$2 per unit; Total revenue before tariff = PQ, where P is price and Q is quantity.
Let us denote the original price as P.
Therefore, total revenue before tariff = P*10000 = 10000P.
After imposing tariff $2 the price raises and becomes: P+2
So,
Total revenue after tariff = (P+2)*8000 = 8000P+16000
This implies that the extra $16000 amount bears consumers after imposing the specific tariff.
Thus, option A is the correct answer.
Lubbock county is planning to construct a bridge across the Rio de Lubbock to facilitate afternoon skiing in the El Dusto ski basin. The first cost of the bridge will amount to $6,500,000. Annual maintenance and repairs will amount to $25,000 for each of the first five years, to $30,000 for each of the next 10 years and to $35,000 for each of the next 5 years. In addition, a major overhaul costing $500,000 will be required at the end of the tenth year. Use an interest rate of 5% and determine the equivalent uniform annual cost for a 20 year period. Please enter your answer without '$' sign.
Answer:
575,010.25
Explanation:
i = 5%. n = 20 Years. P = 6,500,000.
Annual Maintenance Cost for the first five years, A1 = 25,000.
Annual Maintenance Cost from year 6 thro' 15, A2 = 30,000.
Annual Maintenance Cost from year 16 thro' 20, A3 = 35,000.
Overhaul Costs = 500,000 at year 10.
EUAC = [6,500,000 + 500,000 (P/F, 5%, 10)] (A/P, 5%, 20) +
25,000 +[{5000 (F/A, 5%, 5) + 5000(F/A, 5%, 15)} (A/F, 5%, 20)]
= [6,500,000 + 500,000 (0.6139)] (0.0802) +
25,000 +[{5000 (5.526) + 5000 (21.579)}(0.0302)]
= 545,917.39 + 29,092.86 = 575,010.25
Both the Onus ferry operator in the monopoly market and each of the Yuri ferry operators in the perfectly competitive market will want to produce at the point that the marginal revenue is equal to the marginal cost. Explain in detail the two reasons that the monopoly’s marginal revenue will always be less than its price while the marginal revenue in the perfectly competitive market will always be equal to the market price. (2 points)
Answer: Please refer to Explanation.
Explanation:
Monopoly.
The 2 reasons why the monopoly’s marginal revenue will always be less than its price are;
a) Even though Monopolies have very large influence on the prices of goods and services they offer, for a Monopoly to sell more goods, they generally have to lower their prices. This will lead to a situation where Marginal Revenue, which is the additional revenue made per additional unit sold will be less than Price because additional revenue for a new unit will be less than the last one because prices are dropped .
b) A Monopoly's demand schedule is downward sloping. This means that demand rises as prices drop. As prices drop therefore, more goods will be sold but the marginal revenue will be less because prices had to be dropped to get an additional unit to be sold. That unit therefore will bring in less revenue than the last unit.
Perfectly Competitive Market
In such a market, the seller is a Price Taker. This means that sellers in this market do not sell at a price that they want but rather at a price the market has established to be the Equilibrium. This is because of the high competition in the market. Since they are all selling at the same price, this means that every additional revenue they get is the same as the price the market charges. This means that Price equals Marginal Revenue in this market.
5. Ren Inc. has expected earnings before interest and taxes of $63,300, an unlevered cost of capital of 14.7 percent, and a combined tax rate of 23 percent. The company also has $11,000 of debt that carries a coupon rate of 7 percent. The debt is selling at par value. What is the value of this company?
Answer:
$334,101.43
Explanation:
The computation of the value of this company is shown below:
Value of unlevered firm= [$63,300 × (1 - 23%)] ÷ 14.7%
= $331,571.43
And,
Value of this company = 331,571.43 + 23% of $11,000
= $331,571.43 + $2,530
= $334,101.43
As we know that value of the company is the mix o f levered firm and the unlevered firm according to that we done the calculations
There are three economy situations and two stocks Information is as follows Economy Stock A Stock B Booming 0.3 10 20 Neutral 0.3 5 0 Recession 0.4 0 10 a What are the expected returns for both stock A and B respectively b What is the standard deviation risk for stock A c What is the portfolio return given that you have $10000 and allocate $4000 in stock A
Answer:
a) A = 4.50% and B = 2.00%
b) SD for A = 4.15 %
c) Portfolio Return = 3.0%
Explanation:
a) Expected Returns for Both A and B respectively:
In order to calculate the expected returns, let's categorize the given data first.
Economy Probability Stock A Stock B
Booming 0.30 10% 20%
Neutral 0.30 5% 0%
Recession 0.40 0% -10% (not 10%)
So,
Expected Return for Stock A:
A = Sum of (all Probability x Stock A)
A = (0.30 x 0.10) + (0.30 x 0.05) + (0.40 x 0.00)
A = 0.045
A = 4.50 %
Return for Stock B:
B = Sum of all Probability x Stock B
B = (0.30 x 0.20) + (0.30 x 0.00) + (0.40 x -0.10)
B = 0.002
B = 2.0%
b) Standard Deviation /Risk for Stock A:
SD for A = Sum (Square Root (Probability*(Stock A Return - Expected Return of Stock A)²) )
SD for A = [tex]\sqrt{0.30*(0.10-0.045)^2 + 0.30*(0.05-0.045)^2+0.40*(0.00-0.045)^2}[/tex]
SD for A = 0.0415
SD for A = 4.15%
c) Portfolio Return Given that:
Value Weight Return
Stock A 4000 0.4 4.50%
Stock B 6000 0.6 2.0%
10000
Portfolio Return = Sum of ( Weight x Return)
= (0.4 x 0.045) + (0.6 x 0.02)
= 0.03
Portfolio Return = 3%
Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows: Units July 3,500 August 4,400 September 4,900 October 6,300 Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy. Required: Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value.
The detailed answer provides calculations for preparing a direct materials purchases budget for Langer Company for the months of July, August, and September. It also uses the principles of production planning and inventory management to show how to calculate the amount of raw materials to be purchased each month.
Explanation:To calculate the purchases budget for each of the months in question we first compute the total amount of plastic needed for production schedule and then add additional plastic for inventory as per the company's policy.
1. For July, the production requirement is 3500 units. Each unit requires 15 ounces of plastic. Therefore the total plastic needed is 3500*15 = 52500 ounces. The company will need additional 30% of August's production i.e. 30%*4400*15 = 19800 ounces. Therefore, total ounces to be purchased in July = 52500+19800 = 72300 ounces. In dollar Terms, 72300*0.08 = $5784
2. For August, production requirement is 4400*15 = 66000 ounces. Additional 30% for September's production = 30%*4900*15 = 22050 ounces. Therefore, total ounces to be purchased in August = 66000+22050 = 88050 ounces. In dollar terms, 88050*0.08 = $7044
3. For September, production requirement is 4900*15 = 73500 ounces. Additional 30% for October's production = 30%*6300*15 = 28350 ounces. Therefore, total ounces to be purchased in September = 73500+28350 = 101850 ounces. In dollar terms, 101850*0.08 = $8148
The total purchase cost over all three months is $5784 + $7044 + $8148 = $20976 (rounded to the nearest whole number).
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Rihanna, Inc. sells watches for $100 per watch. The variable expenses are $20 per unit, and the fixed expenses total $80,000 per period. By how much will net operating income change if watch sales are expected to increase by $400,000
Answer:
Net operating income = $240,000
Explanation:
At first we have to determine the break-even sales.
We know,
Break-even sales in units = Fixed expense ÷ (Sales price per unit - Variable cost per unit)
Break-even sales in units = $80,000 ÷ ($100 - 80)
Break-even sales in units = $80,000 ÷ $20 = 4,000 units.
Therefore, if the company sells 4,000, there will be no operating income.
If the total sales of Rihanna, Inc. is increased by $400,000, it means the company sells $400,000 ÷ $100 = 4,000 more units.
Therefore,
Sales = $400,000
Less: Variable expense (4,000*$40) = $160,000
Contribution Margin = $240,000
The new net operating income will be $240,000 as the fixed expense remains same for the entire period.
Current Year Prior Year Accounts payable, end of year $ 4,603 $ 8,548 Accounts receivable, net, end of year 18,685 15,726 Inventory, end of year 6,904 6,055 Net sales 220,000 205,000 Cost of goods sold 140,000 130,000 (1) Use the information above to compute the number of days in the cash conversion cycle for each year. (2) Did the company manage cash more effectively in the current year?
Find the given attachments for the complete solution
In budgeting direct labor hours for the coming year, it is important to a.multiply production in units by the labor wage rate. b.multiply production in units by the direct labor hours per unit. c.divide production in units by the direct labor hours per unit. d.subtract direct labor hours per unit from production in units. e.subtract production in units from the direct labor hours per unit.
Answer:
b.multiply production in units by the direct labor hours per unit
Explanation:
In order to calculate the budgeted direct labor hours we simply multiplied the units production with the direct labor per unit
In mathematically,
Budgeted direct labor hours = Production in units × direct labor hours per unit
By considering the units production and direct labor hours per unit we can get the budgeted direct labor hours which are to be considered as a estimated direct labor hours
In budgeting direct labor hours for the coming year, it is important to multiply production in units by the direct labor hours per unit.
Explanation:In budgeting direct labor hours for the coming year, the correct approach is to multiply production in units by the direct labor hours per unit.
This is because direct labor hours per unit give us the amount of labor required to produce each unit, and by multiplying this with the production in units, we can estimate the total labor hours required for the coming year.
For example, if the direct labor hours per unit is 2 and the production in units is 100, then the estimated direct labor hours for the coming year would be 2 x 100 = 200 hours.
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Edelman Engines has $11 billion in total assets. Its balance sheet shows $1.1 billion in current liabilities, $7.7 billion in long-term debt, and $2.2 billion in common equity. It has 900 million shares of common stock outstanding, and its stock price is $25 per share. What is Edelman's market/book ratio? Round your answer to two decimal places.
Answer:
10.23x
Explanation:
Market/Book Ratio = Stock Price / Net Book Value per Share
Stock Price = $25 per share
Net Book Value per Share = Net Book Value / shares of common stock outstanding
Shares of common stock outstanding = 900 million shares
where;
Total Assets = $11 billion
Total Liabilities = Current Liabilities + Long-Term Liabilities
Total Liabilities = $1.1 billion + $7.7 billion
Total Liabilities = $8.8 billion
Hence;
Net Book Value = Total Assets - Total Liabilities
Net Book Value = $11 billion - $8.8 billion
Net Book Value = $2.2 billion
Therefore;
Net Book Value per Share = Net Book Value / shares of common stock outstanding
Net Book Value per Share = $2.2 billion / 900 million shares
Net Book Value per Share = $2,200,000,000 / 900,000,000 shares
Net Book Value per Share = $2.44 per share
So;
Market/Book Ratio = Stock Price / Net Book Value per Share
Market/Book Ratio = $25 per share / $2.44 per share
Market/Book Ratio = 10.23x
It means that Stock is over valued and it has performed well because Market/Book Ratio is greater than 1. So the Stock price is set at higher price in relation to Edelman Engines' Net Book Value, so its Market/Book Ratio is 10.23x.
Coming Home Corporation uses a weighted-average process costing system to collect costs related to production. The following selected information relates to production for October: Materials Conversion Units completed and transferred out 49,000 49,000 Equivalent units: work in process, October 31 11,000 5,000 Total equivalent units 60,000 54,000 Materials Conversion Costs in work in process on October 1 $ 9,000 $ 5,400 Costs added to production during October 243,000 513,000 Total cost $ 252,000 $ 518,400 All materials at Coming Home are added at the beginning of the production process. What total amount of cost should be assigned to the units completed and transferred out during October? a. $676,200 b. $667,800 c. $642,000 d. $690,000
Answer:
A. $676,200
Explanation:
See attached file