Answer:
Option B $1.03
Explanation:
First lets calculate present value = cash flow(PVAF, life, rate) where PVAF = present value annuity factor
= 15(PVAF, 10, 5 years)
from the annuity table
Present value = 15 * 3,790 = $56.8618 million
The decrease in Present value will be $56.8618 million
Decrease in price = present value/number of share = 56.8618/66 = 1.033851 approx $1.03
Final answer:
Aerelon's shares are expected to fall by $1.14 per share due to the crash. This is calculated by determining the present value of the lost free cash flows at a 10% discount rate and dividing by the number of shares outstanding.
Explanation:
To calculate how much Aerelon’s shares are expected to fall in price as a result of the crash, we need to determine the present value (PV) of the loss in free cash flows (FCF). The total loss in FCF is $15 million per year for five years. Using the given equity cost of capital which is 10%, we can discount these future cash flows to the present value. We then divide this total loss in present value by the number of shares outstanding to determine the per-share price impact.
Calculating the Present Value of the Loss in Free Cash Flows:
The formula for the present value of an annuity (a series of equal payments at regular intervals) is PV = FCF × [(1 - (1 + r)^(-t)) / r], where FCF is the annual free cash flow, r is the equity cost of capital, and t is the number of years.
PV = $15 million × [(1 - (1 + 0.10)^(-5)) / 0.10]
PV = $15 million × [(1 - (1 + 0.10)^(-5)) / 0.10]
PV = $15 million × [4.16986]
PV = $62.5479 million
Calculating the Per-Share Price Impact:
The total present value of the loss is divided by the number of shares outstanding to find the per-share impact.
Share price impact = PV / Number of shares
Share price impact = $62.5479 million / 55 million shares
Share price impact = $1.14
Therefore, as a result of the crash, Aerelon’s shares would be expected to fall by $1.14 per share, which corresponds to option C.
The S&P 500 index delivered a return of 25%, 15%, -35%, and -5% over four successive years.
What is the arithmetic average annual return for four years?
A) -5%
B) 0%
C) 5%
D) 3%
Answer:
arithmetic average annual return is 0
correct option is B) 0%
Explanation:
given data
return r1 = 25%
return r2 = 15%
return r3 = -35%
return r4 = -5%
to find out
What is the arithmetic average annual return for four years
solution
we know that arithmetic average annual return is express as
[tex]\bar{X} = \frac{\sum x}{N}[/tex] .........................1
here [tex]\bar{X}[/tex] is arithmetic mean and ∑x is sum of return and N is number of observation i.e 4
so put here value in equation 1 we get
[tex]\bar{X} = \frac{25+15-35-5}{4}[/tex]
[tex]\bar{X}[/tex] = 0
so arithmetic average annual return is 0
correct option is B) 0%
You are asked to spend a week or so as the Fed chairman. It turns out to be a very interesting week. If your goal is to stabilize inflation and economic activity, what would be your response to these three events? Consider each event individually, independent from the others:
(a) a rapid rise in the stock markets rapidly increases people’s wealth.
(b) Chilean citizens get a sudden taste for Buffalo hot wings (they must be made in Buffalo).
(c) firms begin to grow anxious about the decline in consumer confidence.
Answer:
(a) A rapid rise in the stock markets that rapidly increases people’s wealth would mean that for the same level of real interest rate, output will rise because of the rise in demand for consumer goods. This will probably lead to inflation and as chair of the Fed you should raise interest rates to quiet inflation and reduce the gap.
(b) If Chilean citizens get a sudden taste for Buffalo hot wings that must be made in Buffalo, this will have a similar effect as the answer before. The answer is to raise interest rates.
(c) Firms begin to grow anxious about the decline in consumer confidence.
According to Bruce Scagel, which of the following is NOT one of the four principles necessary to ensure a successful training effort?
a. Duration: Training should be ongoing.
b. Focus: Training should be focused on a limited number of very important performance areas.
c. Mass: Training should provide the maximum payoff that is possible.
d. Value: Training should be focused on performance areas the offer the highest opportunity for payback.
e. Efficiency: Training should be produce the greatest results for the least amount of effort.
Answer:
one principle which is against the BRUCE Scagel principle for training effort is Efficiency
Explanation:
one principle which is against the BRUCE Scagel principle for training effort is Efficiency
According to the Bruce duration of the training must be long enough to provide basic knowledge to the worker. Focus should be on one goal not on the various goal. Maximum number of worker get the benefit of successful training. The main thing that Bruce focused on his principle is the value of training. He focus training on the key area of the employee to get maximum benefit out of the training.
Your neighbor Bob has two annuities. The first annuity will pay him $10,000 per month for the next 10 years. The second annuity will pay him $15,000 per month for the following 10 years (years 11 through 20). Assuming a discount rate of 6%, what is the present value of the annuities?
Answer:
$1,643,344.308
Explanation:
These are Ordinary annuities because if it is not mentioned that the payments are made at the beginning of the year which is the case for Annuity Due.
You can use a financial calculator to find the Present value of these two ordinary annuities.
PV of Annuity 1 from (yr1-yr10)
Recurring payment; PMT = 10,000
Total duration ; N = 10 *12 = 120 months
Monthly interest rate in this case ; I/Y = 6%/12 = 0.50%
Future value ; FV = 0 (use 0 if annuity variable is not given )
then CPT PV= $900,734.533
PV of Annuity 1 from (yr11-yr20)
This will happen in 2 steps sice it is a forward-starting annuity;
Recurring payment; PMT = 15,000
Total duration ; N = 10 *12 = 120 months
Monthly interest rate in this case ; I/Y = 6%/12 = 0.50%
Future value ; FV = 0 (use 0 if annuity variable is not given )
then CPT PV( at t=10)= $1,351,101.80
Next find the PV of $1,351,101.80 at t=0;
$1,351,101.80 /(1.005^120) = $742,609.7754
Next, find the sum of these two PVs to find the answer;
=$900,734.533 + $742,609.7754
PV = $1,643,344.308
The present value of Bob's two annuities, given a discount rate of 6%, is approximately $1,637,896. This is calculated by discounting the future payments of each annuity back to their value in today's dollars.
Explanation:The subject of this question is annuities, specifically the concept of the present value of future cash flows. The present value calculation discounts future cash flows back to today's dollars using a specific discount rate, in this case, 6%. In this example, Bob's first annuity pays $10,000 per month for the next 10 years and is calculated using the present value of an ordinary annuity formula: PV = Pmt * [(1 - (1 + r)^-n) / r], where 'Pmt' is the monthly payment, 'r' is the monthly interest rate, and 'n' is the number of periods. For Bob's first annuity, this results in a present value of approximately $890,471. The second annuity's present value needs to be calculated with a delay of 10 years as it starts in the 11th year. The calculation is first done as if it starts today (resulting in approximately $1,335,707), then discounted back an additional 10 years, giving a present value of approximately $747,425. Summing these two amounts provides the total present value of approximately $1,637,896.
Learn more about Present Value of Annuities here:https://brainly.com/question/36591150
#SPJ11
When several different vendors and/or products are candidates and you want to solicit competitive proposals and quotes, what would you use?A) Request for proposal (RFP)B) Request for quotation (RFQ)C) Request for specification (RFS)D) Request for design (RFD)E) None of these
Answer:
A) Request for proposal (RFP)
Explanation:
Request for proposal is a document generated by a company which is basically describing its need and criteria for fulfilling the requirement by the company. In this the company demands proposals for the eligible vendors fulfilling the criteria and requirement as mentioned in the request for proposal.
When there are competitive proposals then company can prepare this and ask the vendors eligible to put there conditions and letters so that the most favorable ones can be asked to put the quotations.
Intel reports retained earnings at the end of fiscal 2018 of $35,477 million and retained earnings at the end of fiscal 2017 of $32,138 million. The company reported dividends of $4,479 million and other transactions with shareholders that reduced retained earnings during the year by $1,802 million. How much net income did the firm report in fiscal 2018?
A) $3,339 million net income
B) $3,339 million net loss
C) $9,620 million net income
D) $9,620 million net loss
E) None of the above
Answer:
net income = $9620
so correct option C) $9,620 million net income
Explanation:
given data
retained earnings 2018 = $35,477 million
retained earnings 2017 = $32,138 million
dividends = $4,479 million
reduced retained = $1,802 million
to find out
net income did the firm report in fiscal 2018
solution
we get reduced due to dividend and other transaction is
reduced due to dividend and other transaction = $4479 + $1802
reduced due to dividend and other transaction = $6281
net income = retained earnings - reduced due to dividend and other transaction .............1
net income = $35477 -$6281
net income = $9620
so correct option C) $9,620 million net income
Which of the following statements is correct about the provision of public goods?
Check all that apply.
O The government always provides the exact types of public goods that everyone in the society wants.
O It is hard for the government to decide the appropriate amount of public goods to produce because people have differing preferences regarding such goods.
O Majority rule is the most efficient way to determine the amount of public goods a society should produce.
Answer:It is hard for the government to determine the appropriate amount of public goods to produce because people have differing preferences regarding such goods.
Explanation:
Public goods refers to essential goods or services that are freely made available to the populace by the government, private groups or individuals.
Due to the large numbers of people, high cost, differences in preference the government cannot meet all the needs for public goods.
Majority rules may not be the most efficient way to determine the provision of public goods, for people are more likely to strive for their personal interest even if it antagonize the general interest. The needs of the people should be measured in providing public goods.
Final answer:
The provision of public goods is complex due to their nonexcludable and nonrival nature, causing it to be difficult for the government to gauge the exact public demand and appropriately allocate resources. Tools like surveys and cost-benefit analysis are used to estimate and address collective demands, which illustrates why not all statements about public goods and government provision can be deemed accurate.
Explanation:
When considering the provision of public goods, there are several accurate statements:
This statement is correct because determining the optimal quantity and type of public goods to provide is challenging due to varying individual valuations and the nonexcludable, nonrival nature of these goods. The government tends to use tools like surveys to ascertain the collective demand and applies cost-benefit analysis to accommodate the diverse needs and preferences within a society.
However, the assertion that the government always provides the exact types of public goods that everyone in the society wants is not correct due to the diverse needs and preferences among the population. Similarly, using majority rule to determine the amount of public goods a society should produce isn't always the most efficient method since it may not accurately capture the value all individuals place on different public goods.
Benny Company budgeted 610 pounds of direct materials costing $18.00 per pound to make 8,000 units of product. The company actually used 650 pounds of direct materials costing $30.00 per pound to make the 8,000 units. What is the direct materials quantity variance?
Answer:
-$720 unfavorable
Explanation:
The computation of the material quantity variance is shown below:
= Standard Price × (Standard Quantity - Actual Quantity)
= $18 per pound × (610 pounds - 650 pounds)
= $18 per pound × -40 pounds
= -$720 unfavorable
Simply we take the difference between the standard quantity and the actual quantity and then multiply it by the standard price so that the correct value can come
The direct materials quantity variance for Benny Company is $720 Unfavorable, calculated by multiplying the excess quantity of materials used (40 pounds) by the budgeted price per pound ($18.00).
The direct materials quantity variance is calculated by comparing the difference between the actual quantity of materials used and the budgeted amount, and then multiplying by the budgeted price per unit. The formula is as follows:
Direct Materials Quantity Variance = (Actual Quantity - Budgeted Quantity) × Budgeted Price
In this case, the budgeted quantity is 610 pounds, the actual quantity used is 650 pounds, and the budgeted price is $18.00 per pound. The variance calculation would be:
Variance = (650 pounds - 610 pounds) × $18.00/pound
Variance = 40 pounds × $18.00/pound
Variance = $720 Unfavorable
Since the company used more materials than it budgeted for, the variance is considered unfavorable.
Adams Corporation’s balance sheet indicates that the company has $510,000 invested in operating assets. During 2018, Adams earned operating income of $52,020 on $1,020,000 of sales. Required Compute Adams’s profit margin for 2018. Computed Adams turnover for 2018. Compute Adams’s return on investment for 2018. Recompute Adams’s ROI under each of the following independent assumptions:
(1) Sales increase from $1,020,000 to $1,224,000, thereby resulting in an increase in operating income from $52,020 to $55,080.
(2) Sales remain constant, but Adams reduces expenses, resulting in an increase in operating income from $52,020 to $54,060.
(3) Adams is able to reduce its invested capital from $510,000 to $408,000 without affecting operating income.
Answer:
Profit Margin = 5.1%
Asset Turnover Ratio = 2:1
ROI (Normal) = 10.20%
ROI (Scenario 1) = 10.80%
ROI (Scenario 2) = 10.60%
ROI (Scenario 3) = 12.75%
Explanation:
Normal Scenario
Profit Margin = Operating Income ÷ Sales Revenue for the year
Profit Margin = $52,020 ÷ $1,020,000 = 5.1%
Asset Turnover Ratio = Sales Revenue ÷ Operating Assets
Asset Turnover Ratio = $1,020,000 ÷ $510,000 = 2 : 1
Return on Investment = Operating Income ÷ Operating Assets
Return on Investment = $52,020 ÷ $510,000 = 10.20%
Scenario 1
Return on Investment = $55,080 ÷ $510,000 = 10.80%
Scenario 2
Return on Investment = $54,060 ÷ $510,000 = 10.60%
Scenario 3
Return on Investment = $52,020 ÷ $408,000 = 12.75%
Ford recently hired twenty employees to work in various departments of the company. On the first day, all twenty had the same orientation and attended the same training and development sessions. They were most likely engaged in what form of training?
Answer:
They were most likely engaged in "classroom training and lectures."
Explanation:
Classroom training method involves a facilitator passing across knowledge or information to a group of employees at the same time. The main advantage of this training method is that many employees can learn at the same time.
As the employees were hired by Ford to work in various departments, with different job functions, then it is most likely that on their first day at work, they were put through a "classroom training".
This is further buttressed by the the statement that all twenty of the employees received the same orientation and attended the same training and development sessions in one day and at the same time.
Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell issued $25,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $26,625,925. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.*
2. Journalize the entries to record the following:*
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.)
b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.)
Answer:
Explanation:
1. CHECK THE FIRST IMAGE ATTACHED.
the cash received from the issuance of bond is debited with $26,625,925. The premium on bonds payable is credited with $1,625,925 and bonds payable is credited with $25,000,000.
Working notes:
Calculation is given below:
Premium on Bonds Payable = Cash − Bonds Payable
=$26,625,925−$25,000,000
=$1,625,925
2a and b. CHECK THE SECOND AND THIRD IMAGE.
It is given to record the semi-annual interest for June-30 and amortization of the premium in the journal entry. The interest expense is calculated by multiplying the interest rate with the value of bonds and dividing it by 2. Since the interest rate is given for one year, to calculate the semi-annual interest rate, only half of the year should be taken. The half of the year can be 6/12 or 1/2. The premium on amortization is calculated by dividing the premium on bonds by 20. Therefore, the calculated amortization premium on bonds payable is $81,296. The interest expense is calculated by subtracting the premium on bonds payable from cash. As per the debit and credit rules, the cash account is credited with $1,250,000, the premium on bonds payable is credited with $81,296, and bonds payable is credited with $1,168,704.
Therefore, the premium on bonds payable is $1,625,925.
The journal entries for Campbell Inc.'s bond issuance and premium amortization were provided, including the issuance of bonds and the first two interest payments. The premium amortization was calculated using the straight-line method.
Explanation:Campbell Inc.'s situation is a typical case in accounting for bonds issuance and premium amortization. Here are the necessary journal entries:
Issuance of Bonds: Dr. Cash $26,625,925, Dr. Premium on Bonds Payable $1,625,925, Cr. Bonds Payable $25,000,000. First Interest Payment (Dec 31, Year 1): Dr. Interest Expense $1,125,000 ([$25,000,000 x 10%]/2), Dr. Premium on Bonds Payable $81,296 ([$1,625,925/20]), Cr. Cash $1,250,000 ([$25,000,000 x 10%] / 2). Second Interest Payment (Jun 30, Year 2): Dr. Interest Expense $1,125,000, Dr. Premium on Bonds Payable $81,296, Cr. Cash $1,250,000
The calculation of the premium amortization is straight line, dividing the total premium by the number of payments over the life of the bond (10 years x 2 payments per year).
Learn more about Premium Amortization here:https://brainly.com/question/29643279
#SPJ3
As of 2014, Fischer Corp. has $10 par, 4% preferred stock, 6,000 shares outstanding, and $1 par common stock with 38,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2012.
If the company wants to distribute $3 per share to the common stockholders in 2014, what is the total amount of dividends that the company must pay in the current year?
A) $ 60,000
B) $118,800
C) $ 54,000
D) $114,000
Answer:
B) $118,800
Explanation:
The computation of the total amount of dividends are shown below:
= Preference dividend for year 2013 + Preference dividend for year 2014 + dividend for common stock
= (6,000 shares × $10 × 4%) + (6,000 shares × $10 × 4%) + (38,000 shares × $3)
= $2,400 + $2,400 + $114,000
= $118,800
Simply we added the preference dividend for 2013 and 2014 and then added the common stock dividend so that the accurate value can come.
A fire destroyed most of the inventory in Mick’s warehouse on September 1. After the fire, Mick’s accounting records showed the following: Inventory, January 1 $ 55,000 Purchases, January 1 through September 1 $ 310,000 Sales, January 1 through September 1 $ 370,000 Inventory not damaged by fire $ 45,000 Gross profit percentage on sales 30 % What amount of inventory was lost in the fire?
Answer:
$61,000
Explanation:
For computing the inventory lost in fire, first we have to determine the various items like - cost of goods available for sale, gross profit, cost of goods sold and ending inventory
So, the cost of goods available for sale would equal to
= Opening inventory + purchase made
= $55,000 + $310,000
= $365,000
The gross profit would be
= Sales × Gross profit percentage
= $370,000 × 30%
= $111,000
And, the costs of goods sold would be
= Sales - gross profit
= $370,000 - $111,000
= $259,000
Now the ending inventory would be
= Cost of goods available for sale - costs of goods sold
= $365,000 - $259,000
= $106,000
And, the not damaged goods were $45,000
So, the lost goods would be
= $106,000 - $45,000
= $61,000
The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhad and $1.30 for fixed overhead) based on 100% capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows:Actual Variable Factory Overhead: $360,000fixed factory overhead 104,000Standard hours allowed for units produced: 60,000 hoursWhat is the amount of the factory overhead controllable variance?options for both are:a) 12,000Ub) 12,000Fc) 14000Ud) 26000U
Answer:
b) 12,000F
Explanation:
Please see attachment .
The factory overhead controllable variance is calculated by comparing actual total overhead costs to standard overhead costs, resulting in a $12,000 favorable variance due to lower actual costs indicating efficient control.
The question asks for the calculation of the factory overhead controllable variance, which involves comparing the standard cost of variable and fixed overhead based on allowed hours to the actual variable and fixed factory overhead costs. The standard variable overhead is calculated as $6.20 per machine hour for 60,000 hours, resulting in $372,000. Meanwhile, the standard for fixed overhead remains constant regardless of the standard hours allowed and is based on the 100% capacity of 80,000 machine hours, which is not directly given but its actual cost is $104,000.
The actual variable factory overhead is $360,000, and the actual fixed factory overhead is $104,000. To find the controllable variance, we compare the actual total overhead ($360,000 + $104,000 = $464,000) to the standard overhead ($372,000 + $104,000 = $476,000). This results in a $12,000 favorable variance, since the actual costs were lower than the standard, indicating efficient control over overhead costs.
William is a single writer (age 35) who recently decided that he needs to save more for retirement. His 2019 AGI before the IRA contribution deduction is $66,000 (all earned income). (Leave no answer blank. Enter zero if applicable.)If he does participate in an employer-sponsored plan, what is the maximum deductible IRA contribution William can make in 2018?
Answer:
$ 3,850
Explanation:
Please see attachment
William can make a contribution to his IRA, but due to his AGI of $66,000 and the phase-out rules for singles participating in an employer-sponsored plan in 2018, he would only be eligible for a partial deduction, not the full $5,500 limit.
Explanation:Given William's situation, if he decides to participate in an employer-sponsored plan, his maximum deductible IRA contribution for the year 2018 would be influenced by the IRS rules on IRA contributions and deductions.
For the year 2018, the standard IRA contribution limit was $5,500 for individuals under 50 years of age. This limit is applicable to all contributors regardless of their participation in an employer-sponsored plan. However, deduction limits based on modified adjusted gross income (MAGI) apply for those participating in an employer-sponsored retirement plan.
Since William's AGI is $66,000 and assuming he is covered by an employer-sponsored retirement plan, his ability to take a full deduction for his IRA contribution is phased out between $63,000 and $73,000 for single filers in the year 2018. Therefore, William would be able to make a partially deductible contribution to his IRA, but not the full $5,500. To determine the exact deductible amount, he would need to calculate it based on the IRS phase-out calculation, which reduces the deductible amount as one's income increases within the phase-out range.
Oriole Company lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation’s books disclosed the following. Beginning inventory $173,200 Sales revenue $672,900 Purchases for the year 424,200 Sales returns 24,600 Purchase returns 28,000 Rate of gross profit on net sales 30 % Merchandise with a selling price of $21,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $16,100 had a net realizable value of $5,700. Compute the amount of the loss as a result of the fire, assuming that the corporation had no insurance coverage.
Answer:$95,190
Explanation:. $
Opening stock. . 1 73,200
Add purchase less return
(424200-28,000). 396,200
------------
569400
Less cost of goods sold
Salers- return * 70/100
(672900-24600)*70/100=. (453,810)
-----------
Stock balance. 115,590
Less stock salvage
21000*70/100 (14,700)
Damaged realisable value ( 5700)
--------
Stock damaged by fire
95,190
Final answer:
The loss as a result of the fire is $168,857.14.
Explanation:
To compute the loss as a result of the fire, we need to calculate the cost of the damaged inventory and subtract it from the original inventory value.
The cost of the damaged inventory can be determined by multiplying the net realizable value ($5,700) by the ratio of the original selling price of the damaged merchandise to the original selling price of the undamaged merchandise ($16,100/$21,000).
This gives us a cost of $4,342.86 for the damaged inventory.
Subtracting this from the beginning inventory value of $173,200, we find that the loss as a result of the fire is $168,857.14.
National Geographic is replacing an old printing press with a new one. The old press is being sold for $350,000 and it has a net book value of $75,000. Assume that National Geographic is in the 30% income tax bracket. What is the tax implication of the proceed of the sale of the old press? Round to the nearest penny. If tax liabilities, type a negative sign in front. Do not include a dollar sign in your answer. (i.e. If your answer is tax liabilites of $8,765,43, type -8765.43; if tax shield of $8,765.43, type 8765.43).
Answer:
$82,500
Explanation:
The computation of the tax implication on proceed on sale is shown below:
= (Sale value of old press - net book value) × income tax rate
= ($350,000 - $75,000) × 30%
= $275,000 × 30%
= $82,500
We simply deduct the net book value from the sale value of the old press and then multiply it with the income tax rate so that the correct amount can come.
Final answer:
The tax implication of the sale of National Geographic's old printing press is a tax liability of $82,500, calculated as 30% of the gain realized from the sale.
Explanation:
The tax implication of the sale of the old printing press for National Geographic involves calculating the gain on the sale and then applying the corporate income tax rate to determine the tax owed. The sold price of the old press is $350,000, and its net book value is $75,000, resulting in a gain of $275,000 ($350,000 - $75,000). Since National Geographic is in the 30% income tax bracket, the tax liability on the gain is 30% of $275,000, which is $82,500.
Countess Corp. is expected to pay an annual dividend of $5.29 on its common stock in one year. The current stock price is $79.83 per share.
The company announced that it will increase its dividend by 3.40 percent annually.
What is the company's cost of equity?
Answer:
10.03%
Explanation:
Using the dividend discount formula, find the cost of equity; r
[tex]r = \frac{D1}{P0} +g[/tex]
whereby,
D1 = Next year's dividend = 5.29
P0 = Current price of the stock = 79.83
g = growth rate of dividends = 3.40% or 0.034 as a decimal
Next, plug in the numbers to the formula above;
[tex]r = \frac{5.29}{79.83} +0.034\\ \\ r =0.06627 + 0.034\\ \\ =0.10027[/tex]
As a percentage, r = 10.03%
Therefore, the company's cost of equity is 10.03%
On June 1, Harding Co. purchased a machine for $14,000 and estimates it will use the machine for five-years with a $2,000 salvage value. Using the straight-line depreciation method, compute the machine's first year (partial) depreciation expense for June 1st through December 31st.
Answer:
The machine's first year (partial) depreciation expense was $1,400
Explanation:
Harding Co. uses straight-line depreciation method, Depreciation Expense each year is calculated by following formula:
Annual Depreciation Expense = (Cost of machine − Salvage Value )/Useful Life = ($14,000 - $2,000)/5 = $2,400
Depreciation Expense of each month = $2,400/12 = $200
In the first year, from June 1st through December 31st, the machine had been used for 7 months.
Depreciation Expense = Depreciation expense of each month x 7 = $200 x 7 = $1,400
Answer:
$1400
Explanation:
A stock can earn a return of 2%, 20%, or 8%. The stock’s distribution is known, and states that there is a 30% probability of the stock earning a return of 2%, a 36% probability of the stock earning a return of 20%, and a 34% probability of stock earning a return of 8%. What is the variance of the stock’s return?Select one: a. .0056 b. .0923 c. .0061 d. .078 e. .0748
Answer:
option (a) 0.0056
Explanation:
Data provided in the question:
Return that can be earned : 2% 20% 8%
Probability of returns : 30% 36% 34%
Now,
Average return, m = [tex]\frac{2\% + 20\% + 8\%}{3}[/tex] = 10%
Return (X) P(X) X - m ( X - m )² ( X - m )² × P(X)
2% 30% -8% = -0.08 0.0064 0.00192
20% 36% 10% = -0.10 0.01 0.0036
8% 34% -2% = -0.02 0.0004 0.000136
Thus,
Variance of the stock’s return = ∑ ( ( X - m )² × P(X) )
= 0.00192 + 0.0036 + 0.000136
= 0.005656 ≈ 0.0056
Hence,
The correct answer is option (a) 0.0056
Final answer:
The variance of the stock's return is found by calculating the expected return and then summing the squared deviations of each return from the expected return, multiplied by their respective probabilities. The right answer is option (b) .0923.
Explanation:
To calculate the variance of the stock's return, we need to first find the expected value (mean return) of the stock, and then use this to calculate the variance. The expected return is calculated as the sum of the products of each return and its associated probability:
Expected return (E) = (2% * 30%) + (20% * 36%) + (8% * 34%)Next, we calculate the variance by finding the squared deviation of each return from the expected return, multiplying by the probability of that return, and summing these values:
Variance = (30% * (2% - E)^2) + (36% * (20% - E)^2) + (34% * (8% - E)²)After calculating, we will see that the correct option from the provided list is (b) .0923, assuming there are no calculation errors.
If other factors are held constant, what happens to a confidence interval if the sample variance increases?
A. The standard error increases and the width of the interval increases.
B. The range of t scores increases and the width of the interval increases.
C. The standard error decreases and the width of the interval decreases.
D. The range of t scores decreases and the width of the interval decreases.
Answer:
Someon
Explanation:
Know the answer
It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Check all that apply.
A. Baldwin's long-term debt will rise by $10,000,000
B. Working capital will remain the same at $13,607,943
C. Total Assets will rise to $211,976,070
D. The total investment for Baldwin will be $13,954,930
E. Total liabilities will be $132,001,543
Answer:
Please see attachment
Explanation:
Please see attachment
The following information is available for the year ended December 31:
Beginning raw materials inventory $3,000
Raw materials purchases 4,200
Ending raw materials inventory 2,700
Office supply expense 1,600
The amount of raw materials used in production for the year is:
A. $4,500.
B. $1,500.
C. $7,200.
D. $2,900.
E. $4,000
Answer:$4500
Explanation:3000+ 4200 = 7200 - 2700 = 4500
Hotel Cortez is an all-equity firm that has 125000 shares of stock outstanding at a market price of $44.46 per share. The firm's management has decided to issue $80000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 4.2 percent. What is the break-even EBIT? Ignore taxes.
Answer:
EBIT = $3387.42
Explanation:
At break even EBIT, both EPS are the same
EPS in case of all equity firm = EPS of leverd firm
EPS in case of all equity firm = EBIT/ 125.000
EPS of leverd firm = (EBIT-Interest) / Shares outstanding
(Shares outstanding= 125.000-80.000/44.46 = 1012.14 )
EPS of leverd firm = (EBIT - 4.2 %* 80.000 )/ 1012
=(EBIT - 3360)/ 1012
Hence
EBIT/ 125.000= (EBIT - 3.360)/ 1.012
1012 EBIT = 125.000 EBIT - 420.000.000
EBIT = $3387.42
Consider three bonds with 6.8% coupon rates, all making annual coupon payments and all selling at a face value of $1,000. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. a.What will be the price of each bond if their yields increase to 7.8%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years 30 Years Bond price$ $ $ b.What will be the price of each bond if their yields decrease to 5.8%? (Do not round intermediate calculations. Round your answers to 2 decimal places.) 4 Years 8 Years 30 Years Bond price$ $ $
Answer:
a. What will be the price of each bond if their yields increase to 7.8%?4 Years : $966,73 (see example)
8 Years : $942,09
30 Years : $885,26
b. What will be the price of each bond if their yields decrease to 5.8%?4 Years : $1,034.81 (see example)
8 Years : $1,062.59
30 Years : $1,140.64
Explanation:
Principal Present Value = F / (1 + r)^t
Coupon Present Value = C x [1 - 1/(1 +r)^t] / r
This is an example for 4 years, 7,8%, to the others years only change "t".
The price of this bond it's $740,50 + $226,23 = $966,73
Present Value of Bonds $740,50 = $1,000/(1+0,0780)^4
Present Value of Coupons $226,23 = $68 (Coupon) x 3,33
3,33 = [1 - 1/(1+0,0780)^4 ]/ 0,0780
This is an example for 4 years, 5,8%, to the others years only change "t".
The price of this bond it's $798,10 + $236,71 = $1,034.81
Present Value of Bonds $798,10 = $1,000/(1+0,0580)^4
Present Value of Coupons $236,71 = $68 (Coupon) x 3,48
3,48 = [1 - 1/(1+0,0580)^4 ]/ 0,0580
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15. Seven thousand units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $9 each, or processed further at a total cost of $9,500 and then sold for $12 each. Required:Should product X15 be processed further or sold at the split-off point?
Answer:
Processed further
Explanation:
For taking the decision, first we have to determine the increase or decrease cost which is shown below:
Sales revenue if processed further (7,000 units × $12 per unit) $84,000
Less: Sales revenue at the split-off point (7,000 units × $9 per unit) -$63,000
Increase in revenue $21,000
Less: total cost for processing further -$9,500
Financial advantage $11,500
Since the amount is comes in positive, so it would be processed further rather sold at the split-off point
Suppose real GDP for a country is $1,200 billion. The GDP price index is 114.6. There are 25 million workers who work 36 hours per week, and the real wage averages $16 per hour. What is labor productivity for this country?
Final answer:
Labor productivity is calculated by dividing the real GDP by the total hours worked in the economy. For this country, with a real GDP of $1,200 billion and 25 million workers working 36 hours per week, labor productivity comes out to be $25.64 per hour.
Explanation:
To calculate labor productivity, we need to first determine the total number of hours worked and then divide the real GDP by this number. Each worker works 36 hours per week, and we can assume there are roughly 52 weeks in a year, hence the total hours worked annually per worker would be 36 hours/week × 52 weeks/year = 1,872 hours/year.
With 25 million workers, the total hours worked in the economy would be :
25 million workers × 1,872 hours/worker/year = 46.8 billion hours.
Dividing the real GDP ($1,200 billion) by the total hours worked gives us the labor productivity.
Labor productivity = $1,200 billion / 46.8 billion hours
= $25.64 per hour.
. Determine which market the following industries fit in. Choose from purely competitive, monopoly, oligopoly or monopolistic competition. Explain your choice.
a. Corn farming
b. Grocery stores
c. Electric companies
d. Automobile manufacturing
Answer:
a. Purely competitive
b. Monopolistic Competition
c. Monopolistic Competition
d. Oligopoly
Explanation:
a. Corn farming is a purely competitive market as there is a large number of producers selling the homogenous good i.e corn.
b. Grocery stores are an example of monopolistic competition as there is a large number of sellers providing differentiated products.
c. Electric companies are also an example of monopolistic competition as there is a large number of companies providing differentiated products.
d. Automobile manufacturing is an oligopoly market, there are few large firms dominating the market. These firms are producing slightly differentiated products and are interdependent.
The social cost of a monopoly ______.
(A) is equal to the value of the economic rent
(B) equals the social benefit
(C) is illustrated by a curve that would also be the supply curve of the competitive industry
(D) is greater with rent seeking than it otherwise would be
Answer:
(D) is greater with rent seeking than it otherwise would be
Explanation:
In the monopoly, the company is alone to manufacture such product and gain through it. It do not make any efforts to advertise or gain the market share, as it is the sole producer.
Also, the company is the sole producer and thus, charges high for the product, accordingly its earning more than the actual efforts made by it.
Accordingly the social cost is more with the rent seeking concept, because efforts are less.
The social cost of a monopoly is greater with rent seeking than it otherwise would be.
Explanation:The social cost of a monopoly is greater with rent seeking than it otherwise would be.
Learn more about monopoly here:https://brainly.com/question/33076874
#SPJ6
Suppose a bank customer with €1,000,000 wishes to trade out of euro and into Japanese yen. The dollar-euro exchange rate is quoted as $1.60 = €1.00 and the dollar-yen exchange rate is quoted at $1.00 = ¥120. How many yen will the customer get?
Answer:
192,000,000 yen
Explanation:
Please see attachment