Answer:
The company's TIE is 5
Which is above the requirement of the bank.
Explanation:
TIE = income before interest and taxes / interest expense
The first step, is calculate the interest expense:
debt outstanding x debt rate
interest expense: 800,000 x 10% = 80,000
(if there were more than one type of debt, then we should calculate all the interest expense and add them together)
Then we calculate the EBIT (earnings before interest and taxes)
3,200,000 sales
x 6% profit margin:
192,000 net income.
This is the income after taxes and interest
we need to discount this figures.
(EBIT - interest expense) x ( 1 - tax-rate) = net income
(EBIT - 80,000) x ( 1 - 40%) = 192,000
EBIT - 80,000 = 192,000/0.6
EBIT = 320,0000 + 80,000 = 400,000
Now we are able to calculate the TIE ratio:
400,000/80,000 = 5
Final answer:
Alumbat Corporation's current TIE ratio is 4. This is calculated by first determining the EBIT from the annual sales and net profit margin, and then dividing by the annual interest expenses.
Explanation:
Calculation of Alumbat's Current TIE Ratio
To calculate Alumbat Corporation's Times Interest Earned (TIE) ratio, we first need to determine its earnings before interest and taxes (EBIT). The net profit margin on sales is 6%, which gives us a net income (NI) of 6% of $3,200,000. We can calculate EBIT by dividing NI by (1 - tax rate), as EBIT * (1 - tax rate) = NI. Subsequently, we use the formula TIE ratio = EBIT / interest expenses to find out the TIE ratio.
The interest expenses for Alumbat are 10% of the $800,000 debt, which is $80,000 annually. With an annual sales figure of $3,200,000 and a net profit margin of 6%, Alumbat's net income is $192,000.
EBIT = $192,000 / (1 - 0.40) = $320,000
Therefore, Alumbat's current TIE ratio is calculated as follows:
TIE ratio = EBIT / Interest Expenses = $320,000 / $80,000 = 4
With a TIE ratio of 4, Alumbat Corporation meets its bank's requirement to maintain a TIE ratio of at least 4 times.
At December 31, 2014 and 2015, Plank Corp. had outstanding 4,000 shares of $100 par value 8% cumulative preferred stock and 20,000 shares of $10 par value common stock. At December 31, 2014, dividends in arrears on the preferred stock were $16,000. Cash dividends declared in 2015 totaled $60,000. What amounts were payable on each class of stock?
Answer:
For preference stock, the dividend is $50,000 and for the common stock it is $10,000
Explanation:
The computation of each class of stock is shown below:
For preference shareholders = Number of shares × price per share × rate + preferred stock dividend
= 4,000 shares × $100 × 8% + $16,000
= $32,000 + $18,000
= $50,000
The total cash dividend declared is $60,000
So, for common stock it would be equal to
= Total cash dividend - preference stock dividend
= $60,000 - $50,000
= $10,000
By the end of December, Jackson Company has completed work of $2,000. Jackson company has neither billed the clients nor recorded any of the revenue. If the appropriate adjusting entry is not made at the end of the year, what will be the effect on: (a) Income statement accounts (overstated, understated, or no effect)? (b) Net income (overstated, understated, or no effect)? (c) Balance sheet accounts (overstated, understated, or no effect)?
Answer:
(A) sales revenue: understated
gross profit: understated
(B) net income: understated
(C) Retained Earnings : understated
Unearned Services: overstated
Explanation:
(A) sales revenue will not represent the real sales attributable for the period. It will be 2,000 lower than it should be.
Ths will make gross profit be understated as well as is the difference between the sales and the COGS
(B) net income is understated as it do not include a revenue for 2,000 thus, is lower.
(C) unearned services is overstated has it should decrease by 2,000
RE is understate as will increase by the 2,00 additional net income.
As a capital budgeting director for ABC company, you are evaluating the construction of a new plant. The plant has a net cost of $5 million in year 0, and it will provide net cash inflows of $1 million in year 1, $1.5 million in year 2, and $2 million ib years 3 through 5. As a first approximation, you may assume that all cash flows occur at year-end. Within what range is the plant’s IRR?
Answer:
IRR is within range (17.48%, 22.99%)
Explanation:
[tex]NPV = -5,000,000+\frac{1,000,000}{(1+IRR)^{1} }+\frac{1,500,000}{(1+IRR)^{2} }+\frac{2,000,000}{(1+IRR)^{3} }+\frac{2,000,000}{(1+IRR)^{4} }+\frac{2,000,000}{(1+IRR)^{5} }[/tex]
Approximation by defect:
Be
[tex]CF = 1,000,000 + 1,500,000 + 2,000,000 + 2,000,000 + 2,000,000 = 8,500,000[/tex]
[tex]INV = 5,000,000[/tex]
[tex]XCF = 1x1,000,000+2x1,500,000+3x2,000,000+4x2,000,000+5x2,000,000=1,000,000 + 3,000,000+6,000,000+8,000,000+10,000,000=28,000,000[/tex]
[tex]IRR = (\frac{CF}{INV})^{\frac{CF}{XCF} } -1[/tex]
[tex]IRR = (\frac{8,500,000}{5,000,000})^{\frac{8,500,000}{28,000,000} }-1[/tex]
[tex]IRR = (1.7)^{0.30357 }-1= 1.17478-1 = 0.17478[/tex]
IRR = 17.48%
Approximation by excess:
Be
[tex]CF = 1,000,000 + 1,500,000 + 2,000,000 + 2,000,000 + 2,000,000 = 8,500,000[/tex]
[tex]INV = 5,000,000[/tex]
[tex]YCF = 1,000,000/1+1,500,000/2+2,000,000/3+2,000,000/4+2,000,000/5=1,000,000+750,000+666,667+500,000+400,000=3,316,667[/tex]
[tex]IRR = (\frac{CF}{INV})^{\frac{YFC}{CF} } -1[/tex]
[tex]IRR = (\frac{8,500,000}{5,000,000})^{\frac{3,316,667}{8,500,000} } -1[/tex]
[tex]IRR = (1.7)^{0.39} -1=1.2299-1=0.2299[/tex]
IRR = 22.99%
Then,
17.48%<IRR<22.99%
Hope this helps!
The seventh glass of soda that Tim consumes will produce an extra benefit of 10 cents and has an extra cost of zero (Tim is eating at the cafeteria). The cost-benefit principle predicts that Tim will:
A. realize he has had too much soda to drink and go home.
B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.
C. volunteer to empty out the fountain.
D. not drink the seventh glass.
Answer:
B. drink the seventh glass and continue until the marginal benefit of drinking another glass of soda is zero.
Explanation:
The consumer will drink soda until the benefit from consuming matches the cost of consuming.
In this case the cost is zero. So it will consume until the marginal benefit equalt zero.
The costs were taken from the accounting records of the Barnwell Manufacturing Company. Classify each item as either a product cost or a period cost. Also, classify all product costs as direct or indirect, assuming that the cost object is each unit of product manufactured. (If not applicable then select NA.)
(1) State income taxes
(2) Insurance on the manufacturing facilities
(3) Supplies used in manufacturing
(4) Wages for employees in the assembly department
(5) Wages for employees who deliver the product
(6) Interest on notes payable
(7) Materials used in the production process
(8) Rent for the sales outlet in Sacramento
(10) Depreciation expense on delivery trucks
(11) Wages for the sales staff
(12) Factory supervisors' salaries
(13) Company president's salary
(14) Advertising expense
Final answer:
In accounting, costs are categorized into product and period costs. Product costs directly related to the manufacturing process are classified further as either direct or indirect costs. Period costs are expensed in the period they are incurred and are not directly tied to the production process.
Explanation:
In distinguishing between product costs and period costs, product costs are those that are directly associated with the manufacturing process and include direct materials, direct labor, and manufacturing overhead. Period costs are not directly tied to the production process and are expensed in the period in which they are incurred.
State income taxes (1) - Period cost (NA)Insurance on the manufacturing facilities (2) - Product cost (Indirect)Supplies used in manufacturing (3) - Product cost (Indirect)Wages for employees in the assembly department (4) - Product cost (Direct)Wages for employees who deliver the product (5) - Period cost (NA)Interest on notes payable (6) - Period cost (NA)Materials used in the production process (7) - Product cost (Direct)Rent for the sales outlet in Sacramento (8) - Period cost (NA)Depreciation expense on delivery trucks (10) - Period cost (NA)Wages for the sales staff (11) - Period cost (NA)Factory supervisors' salaries (12) - Product cost (Indirect)Company president's salary (13) - Period cost (NA)Advertising expense (14) - Period cost (NA)Cheng builds replica miniature cabinets. His costs for each cabinet are $32 each. A consultant tells Cheng that the average margin in his industry is 54%. Cheng currently sells the cabinets for $43, but thinks he should consider using the industry average margin as his target goal.
(a) What is Cheng's current dollar margin per unit?
(b) What should Cheng's Selling Price be to achieve his target margin?
(c) If Cheng decides to sell to a retailer who earns a retail margin of 10%, what would be the final price to consumers if Cheng changes his price to the retailer to reflect his target margin?
(d) If the retailer decides she would rather have a $10 margin what will be the final retail price to the consumer presuming Cheng changes his price to reflect his new target margin?
Answer:
A) Contribution margin= $9
B) P=$69.56
C) P= $35.56
D) P= $42
Explanation:
Giving the following information:
Unitary variable cost= $32 each.
The average margin industry is 54%.
Selling proice= $43
A) Contribution margin= Price - unitary variable cost= 43-32= $9
B) %Margin= (P-CVu)/P
0.54= (P-32)/P
0.54P=P-32
0.46P=32
P=32/0.46= $69.56
C) 0.10=(P-32)/P
P= $35.56
D) P=32+10= $42
Final answer:
Cheng's current dollar margin per unit is $11. To achieve a 54% margin, his selling price should be $69.57. If selling to a retailer who adds a 10% margin, the consumer price would be $77.30, and if the retailer wants a $10 margin, the consumer price would be $79.57.
Explanation:
To calculate Cheng's current dollar margin per unit, we subtract the cost per unit from the selling price: $43 (selling price) - $32 (cost) = $11 margin per unit.
To achieve the target margin of 54%, we calculate the selling price as follows: Cost divided by 1 minus the desired margin percentage. Hence, $32 / (1 - 0.54) = $69.57, which should be Cheng's selling price to achieve his target margin.
If Cheng sells to a retailer with a target margin of 54%, and the retailer wants a 10% retail margin, the final consumer price is calculated by taking Cheng's new selling price and dividing by 1 minus the retailer's margin percentage: $69.57 / (1 - 0.10) = $77.30.
If the retailer desires a $10 margin instead, we add the $10 to Cheng's selling price to find the final consumer price: $69.57 + $10 = $79.57.
Prior to the 1870s, both gold and silver were used as international means of payment and the exchange rates among currencies were determined by either their gold or silver contents. Suppose that the dollar was pegged to gold at $30 per ounce, the French franc is pegged to gold at 90 francs per ounce and to silver at 9 francs per ounce of silver, and the German mark pegged to silver at 1 mark per ounce of silver. What would the exchange rate between the U.S. dollar and German mark be under this system?
Answer:
the exchange rate between U.S. dollar and German mark be under this system will be of 3 U$D = 1 german mark
Explanation:
We will use gold and silver as a mean to equalize both currencies:
First equivalence between silver and gold:
90 francs = 1 ounce of gold
9 franc = 1 ounce of silver
90/9 = 10 ounce of silver equals 1 ounce of gold.
Now, we convert the german mark to gold:
1 german mark = ounce of silver
10 german mark = ounce of gold.
Finally, we equalize with the US dollars:
30 dollar = ounce of gold = 10 german mark
30 dollars = 10 german mark
3 dollars = 1 german mark
The exchange rate between the U.S. dollar and German mark can be calculated based on the gold and silver pegs of each currency, resulting in an exchange rate of $10 per mark.
Explanation:The exchange rate between the U.S. dollar and German mark can be calculated based on the gold and silver pegs of each currency.
Given that the dollar is pegged to gold at $30 per ounce, the French franc is pegged to gold at 90 francs per ounce, and the German mark is pegged to silver at 1 mark per ounce, we can find that 1 ounce of gold is equivalent to 3 German marks. Therefore, the exchange rate between the U.S. dollar and German mark would be $10 per mark.
A farmer divided his piece of land into 4 equivalent groups. The quality of the soil is the same across the 4 groups of land. He planted the same crop in all 4 groups of land and recorded the yield of the crop in all 4 groups for a 4 week period. Is the study observational or experimental? If it is an experiment, what is the controlled factor?
Final answer:
The student's scenario describes an experimental study where the controlled factors are the quality of the soil and other possible conditions like water, sunlight, and type of crop planted. Control groups, which do not receive the experimental treatment, are a vital component of such studies to isolate the effects of the independent variable.
Explanation:
The study described by the student, wherein a farmer divides his land into 4 equivalent groups and plants the same crop across all groups to record yield over a period of 4 weeks, is an example of an experimental study. The reason it is experimental and not observational is that the farmer is actively controlling the conditions under which the crop is grown, as opposed to simply observing them without intervention.
In this experiment, the controlled factors include the quality of the soil, assumed to be the same across the four groups, and possibly other factors such as the amount of water, plant food, sunlight, and the type of crop planted, all of which are not explicitly stated but are implied to be controlled. The controlled factor is crucial in an experimental setup because it allows the researcher to isolate the effects of a specific variable they are testing (the independent variable) on the outcome of the study (the dependent variable), such as the yield of the crop.
An important aspect of experimental studies is the presence of a control group. This group would not receive the experimental treatment, which in the context of the provided scenarios could be the presence or absence of fertilizer, ensuring that any differences in outcome could be attributed to the fertilizer application.
The study described is an experimental study. The farmer is actively manipulating the conditions by planting the same crop in all 4 groups of land and then observing the outcomes, which in this case is the yield of the crop over a 4-week period.
In an experimental study, there is at least one controlled factor and at least one manipulated factor.
The controlled factor in this experiment is the quality of the soil, which is kept constant across all 4 groups of land. This ensures that any differences in the yield of the crop cannot be attributed to differences in soil quality.
Additionally, the farmer is controlling the type of crop planted and the time period of growth (4 weeks), ensuring that these factors do not vary between the groups.
The manipulated factor in this experiment is likely the specific treatment or condition applied to each of the 4 groups, although the question does not specify what these treatments are.
For example, the farmer might be testing the effect of different fertilizers, irrigation methods, or planting densities on the yield of the crop.
Each group would receive a different treatment, and by comparing the yields, the farmer could determine the effect of each treatment on crop production.
In summary, the study is experimental because the farmer is applying different treatments to the groups of land and controlling for other variables that could affect the yield.
The controlled factors include the quality of the soil, the type of crop, and the duration of the growth period.
Julia wanted to test out a new product for her company. She scheduled several small group lunches and learns with internal staff and then a few town hall meetings with external clients and the community. She wanted to make sure that product would meet the needs of the consumers, but also would be a product that the staff would be excited to produce. Because Julia chose to seek input from others, what type of managerial role do you think she prefers to play?
Answer: Informational
Explanation: These roles refers to the collection, dissemination and transmission of information by the manager. This role of the manager depicts how suitable a manager in decision making as the information collected is usually related to some important decision to be made.
In the given case, Julia tries to collect all the relevant information from different sources such as staff meetings. She collected all the information with objective of making the product suitable for customer needs and preferences.
Thus, we can conclude that Julia likes to play informational role.
Final answer:
Julia's method of product testing reveals her preference for a participative, democratic managerial role, valuing both team and consumer input, indicative of a transformational leadership style.
Explanation:
Julia's approach to product testing shows a preference for a managerial role that is participative and democratic. She values the input and feedback of both internal staff and external consumers, suggesting she seeks to be involved and collaborative rather than authoritative or distant. By organizing small group lunches and learns and town hall meetings, she facilitates open communication and seeks to understand the needs and opinions of those who will ultimately use and produce the product. Julia emphasizes the importance of aligning the product with consumer needs and staff capabilities, showing a holistic view of the product development process. Her style contrasts with that of the manager in the provided example who disregarded employee feedback, showing that Julia prefers an interactive and open management style that values the ideas and satisfaction of her team and clients.
The way Julia has structured her approach indicates that she might favor a management style often associated with transformational leadership, where leaders work with teams to identify needed change, creating a vision to guide the change through inspiration, and executing the change in tandem with committed members of the group. This reflects a modern approach to management that respects the diversity of insights in a team and the value of engaged, motivated employees.
Randy and Frank are both landscapers. Randy can mow 8 lawns per day or prune 24 trees. Frank can mow 6 lawns per day or prune 12 trees. What is each man’s opportunity cost of mowing lawns? Who has a comparative advantage in each task, and who, if anyone, has an absolute advantage at each task?
Answer:
(a) Randy's opportunity cost of mowing lawns = [tex]\frac{24}{8}[/tex]
= 3
Therefore, 3 trees have to be foregone for mowing 1 lawn.
Randy's opportunity cost of pruning trees = [tex]\frac{8}{24}[/tex]
= 0.33
Therefore, 0.33 lawns have to be foregone for pruning 1 tree.
(b) Frank's opportunity cost of mowing lawns = [tex]\frac{12}{6}[/tex]
= 2
Therefore, 2 trees have to be foregone for mowing 1 lawn.
Frank's opportunity cost of pruning trees = [tex]\frac{6}{12}[/tex]
= 0.50
Therefore, 0.50 lawns have to be foregone for pruning 1 tree.
(c) Frank has a comparative advantage in mowing lawns and Randy has a comparative advantage in pruning trees.
(d) Randy has a absolute advantage in both, mowing lawns and pruning trees.
Which of the following techniques are utilized by leaders to stay informed on how well strategy execution process is progressing?A. Managing by walking around (MBWA).B. Managing business with action (MBWA).C. Multi-business warning actions (MBWA).D. Managers being well-advised (MBWA).E. None of these.
Answer:
A. Managing by walking around (MBWA)
Explanation:
Managing by walking around (MBWA) is a term defined by Tom Peters after studyng the most succesdfull companies and their practices. Its means that managers should spend part of their time listening to problems and ideas of their staff, while wandering around an office or plant instead of having only "formal" meetings to check the progress of the company's strategy execution.
If the team is used to this kind of interactioon is more likely thet they will see in their boss some kind of a "peer" and they'll be more confident to talk about their ideas os work problems
Megan Newell is the owner and operator of Ultima LLC, a motivational consulting business.
At the end of its accounting period, December 31, 2013, Ultima has assets of $942,000 and
liabilities of $584,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets increased by $113,000
and liabilities increased by $44,000 during 2014.
Final answer:
The owner's equity for Ultima LLC as of December 31, 2013, was $358,000. By the end of 2014, after accounting for increases in assets and liabilities, the owner's equity amounted to $427,000.
Explanation:
Calculation of Owner's Equity
In accounting, owner's equity is calculated as the difference between a company's total assets and its total liabilities. Using the accounting equation Assets = Liabilities + Owner's Equity, we can determine the owner's equity for Ultima LLC:
a. Owner's Equity as of December 31, 2013
Owner's Equity = Assets - Liabilities
Owner's Equity = $942,000 - $584,000
Owner's Equity = $358,000
b. Owner's Equity as of December 31, 2014
After the increase in assets and liabilities during 2014:
Assets (end of 2014) = Initial Assets + Increase in Assets
Assets (end of 2014) = $942,000 + $113,000
Assets (end of 2014) = $1,055,000
Liabilities (end of 2014) = Initial Liabilities + Increase in Liabilities
Liabilities (end of 2014) = $584,000 + $44,000
Liabilities (end of 2014) = $628,000
Owner's Equity (end of 2014) = Assets (end of 2014) - Liabilities (end of 2014)
Owner's Equity (end of 2014) = $1,055,000 - $628,000
Owner's Equity (end of 2014) = $427,000
The balance shown in the August bank statement of Colt Company was $22,400. After examining the August bank statement and items included with it, the company's accountant found:
Checks outstanding $4,500
NSF check 140
Note collected by bank for the Colt Company 1,500
Deposits outstanding 2,300
Bank service fees 60
What is the amount of cash that should be reported in the balance sheet as of August 31?
A.$20,200
B.$16,700
C.$23,400
D.$15,700
Answer:
A.$20,200
Explanation:
The computation of the cash amount which should be reported in the balance sheet is shown below:
= August Bank statement balance + Deposits outstanding - Checks outstanding
= $22,400 + $2,300 - $4,500
= $20,200
The other amount which is given in the question is irrelevant. Hence, these items should not be considered in the computation, so they are ignored.
Answer:
the amount of cash that should be reported in balance sheet is $20200
option A is correct
Explanation:
given data
balance shown = $22400
Checks outstanding = $4,500
NSF = 140
Note collected = 1500
Deposits outstanding = 2300
service fees = 60
to find out
What is the amount of cash should be reported
solution
we will find amount of that should reported as given by
amount reported = balance amount + deposit outstanding - check outstanding ..................1
put here all these value in equation 1 we get
amount reported = 22400 + 2300 - 4500
amount reported = 20200
so the amount of cash that should be reported in balance sheet is $20200
option A is correct
Which of the following statements is true of expatriate managers?
a. They are managers who work abroad.
b. They are managers who work in domestic firms.
c. They are managers who work for the emerging economies they are a part of.
d. They are managers who work for local businesses in developed countries.
Answer:
The correct answer would be option A, They are managers who work abroad.
Explanation:
Expats are the people who work abroad in other countries, other than their own. They are called the expats in other countries. For example if there is a person who is from Pakistan and is working in Saudi Arabia, he is called as expat in Saudi Arabia. Whatever position they are at, they would be called as expats or expatriates. So in this example, option A describes the expats more appropriately. Expats managers are the managers who work abroad.
Final answer:
The true statement about expatriate managers is that they work abroad (option a). These managers have to adapt to different cultural environments, and their success may depend on various personality traits beyond technical expertise.
Explanation:
The correct answer to which of the following statements is true of expatriate managers is option (a): They are managers who work abroad. Expatriate managers are employed by companies to work in a different country from where the organization is headquartered or where they are originally from. These managers typically have demonstrated leadership skills in their home country, and they are temporarily assigned to oversee operations in the host country, where their effectiveness in a different cultural environment is crucial for both their personal success and that of the organization.
It is important to understand that successful expatriate assignments may require more than just technical skills. Personality traits such as cultural sensitivity, adaptability, emotional stability, and interpersonal skills can be significantly relevant in ensuring success in foreign assignments.
Two candy bar makers sell a chocolate bar that contains coconut and almonds. One company is a well-known national brand name, while the other is a small local candy company that has been marketing its local roots extensively. A customer who likes to support local businesses and is familiar with the local brand chooses the local company’s bar and doesn’t mind paying $.50 more for it. This is an example of the local company having a:
Answer: This is an example of the local company having a: COMPETITIVE ADVANTAGE.
Explanation: A competitive advantage is any characteristic of a company, which differentiates it from others by placing it in a superior relative position to compete. That is, any attribute that makes it more competitive than the others. It is said that a company has a competitive advantage in product differentiation when it offers a product or service that, being comparable to that of another company, has certain attributes or characteristics that make it perceived as unique by customers. Therefore, customers are willing to pay more to get a product from one company than from another.
The local company's advantage in this scenario is a 'Competitive Advantage'. The advantage is built by emphasizing native aspects like local roots which are appealing to consumers who support local businesses. Consumers perceive the local candy's higher price as an investment towards supporting their local economy.
Explanation:The term for the local chocolate company's advantage in this scenario is 'Competitive Advantage'. This advantage often stems from featuring aspects that differentiate a company and its products from the competition, making it the preferred choice among certain consumers. As a small local company, despite not having the sizeable advertising budgets of larger, national brands, it can build competitive advantage by emphasizing aspects like local roots, which can be appealing to consumers who want to support local businesses.
In marketing and strategic management, a competitive advantage is anything that allows an organization to outperform its competitors. It can be a result of various factors such as superior product offering, better customer service, higher quality, among others. In this case, the local candy bar company’s competitive advantage is built upon its local brand image which resonates with the consumers who value supporting local businesses.
As for the reason why consumers are willing to pay more for a product from a company with a competitive advantage, it's because they perceive the product to be worth more. In essence, some consumers may see any additional costs as an investment towards supporting their local economy, this is known as preference for locality strategy in business.
Learn more about Competitive Advantage here:https://brainly.com/question/5647002
#SPJ3
The Holtzman Corporation has assets of $388,000, current liabilities of $74,000, and long-term liabilities of $95,000. There is $38,800 in preferred stock outstanding; 20,000 shares of common stock have been issued. a. Compute book value (net worth) per share. (Round your answer to 2 decimal places.) b. If there is $31,900 in earnings available to common stockholders, and Holtzman’s stock has a P/E of 23 times earnings per share, what is the current price of the stock? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) c. What is the ratio of market value per share to book value per share? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Answer:
a. $9.01 per share
b. $36.69
c. 4.07 : 1
Explanation:
a. For computing the book value per share, we have to apply the formula which is shown below:
= Common stock balance ÷ issued shares
In the given question, the common stock is not given so, first, we have to compute the common stock value which is shown below:
= Assets - current liabilities - long term liabilities - outstanding preference shares
= $388,000 - $74,000 - $95,000 - $38,800
= $180,200
Now put these values to the above formula
So, the answer would be equal to
= $180,200 ÷ 20,000 shares
= $9.01 per share
b. For computing the current price of the stock, we need to apply the formula which is shown below:
= Earning per share × P/E ratio
where,
Earning per share = Earnings available to common stockholders ÷ issued shares
= $31,900 ÷ 20,000 shares
=$1.595 per share
Now put these values to the above formula
So, the answer would be equal to
= $1.595 × 23
= $36.69
c. The ratio of market value per share to book value per share is shown below:
= Market value per share ÷ book value per share
= $36.69 ÷ $9.01
= 4.07 : 1
Financial information is presented below:
Operating expenses $ 26000
Sales revenue 250000
Cost of goods sold 171000
The gross profit rate would be
Answer:
Gross Profit rate = 31.6%
Explanation:
Gross Profit rate = [tex]\frac{Gross\ Profit}{Total\ Sales} \times 100[/tex]
Gross Profit = Total Sales - Cost of Goods Sold.
Operating expenses are not considered while calculating gross profit.
Here, with the given information, gross profit shall be:
Sales Revenue = $250,000
Cost of goods sold = $171,000
Gross profit = $250,000 - $171,000 = $79,000
Gross profit rate = [tex]\frac{79,000}{250,000} \times 100 = 31.6[/tex]
Gross Profit rate = 31.6%
The gross profit rate is calculated by dividing the gross profit ($79,000) by the sales revenue ($250,000) and multiplying by 100, resulting in a gross profit rate of 31.6%.
Explanation:Calculating Gross Profit RateTo calculate the gross profit rate, you subtract the cost of goods sold from the sales revenue and then divide that number by the sales revenue. Using the student's provided financial information:
Sales Revenue = $250,000
Cost of Goods Sold (COGS) = $171,000
Gross Profit = Sales Revenue - COGS
Gross Profit = $250,000 - $171,000
Gross Profit = $79,000
Now, to find the gross profit rate:
Gross Profit Rate = (Gross Profit / Sales Revenue) x 100
Gross Profit Rate = ($79,000 / $250,000) x 100
Gross Profit Rate = 31.6%
Therefore, the gross profit rate is 31.6%.
Learn more about Gross Profit Rate here:https://brainly.com/question/29064762
#SPJ6
This year, State A raised revenues by increasing its general sales tax rate from 5 percent to 6 percent. Because of the increase, the volume of taxable sales declined from $890 million to $759 million. In contrast, State Z raised revenues from its 5 percent sales tax by expanding the tax base to include certain retail services. The volume of services subject to tax was $145 million. Compute the additional revenue raised by State A. Compute the additional revenue raised by State Z.
Answer: (a) $1.04 million
(b) $7.25 million
Explanation:
Additional revenue raised by State A :
Initial revenue = $(5% x 890) million
= $ 44.5 million
Revenue from increased tax rate = $(6% x 759) million
= $45.54 million
Additional Revenue raised by State A = $ (45.54 - 44.5)million
= $1.04 million
Additional revenue raised by State Z :
Revenue from increased tax base = $(5% x 145) million
= $7.25 million
Which one of these was a contributing factor to the need for many foreign banks to seek aid from their governments as a result of the financial crisis of 2007-2009?
A. Decrease in their exchange rates
B. Investments in U.S. subprime mortgages
C. Interest rate spikes
D. Currency controls
Answer:
B. Investments in U.S. subprime mortgages
Explanation:
This was an special mortgage with a higher risk for default. This mortage had a higher premium risk which, made them more expensive than other mortage.
This mortage were traded in the global market and ended being rated as AAA (low risk). This contaminate the entire financial system with uncertainty. When this mortages started to default the bubble explode and the market fell.
The agencies mantain their mistkae in secret and aduce surprise, while there are was indication of the underlying risk in the mortage and the CDO.
You run a school in Florida. Fixed monthly cost is $5000 for rent and utilities, $3000 is spent in salaries and $500 in insurance. Also each student adds up to $90 expense per month for stationary, food etc. You charge $1000 per month from every student. You are considering moving the school to another neighborhood where the rent and utilities will increase to $8000, salaries to $5000 and insurance to $1000 per month. Variable cost per student will increase up to $150 per month. However, you can charge $1500 per student. At what point will you be indifferent between your current mode of operation and the new option?
Answer:
the indifference point is at 12.5
as there can't be 12.5 student it will be between 12 and 13 student per month.
Explanation:
the indifference point will be when the two alternatives yield the same result
(sales price - variable cost)Q - fixed cost = operating income
current scenario:
(1,000 - 90) Q - 8,500
proposed scenario:
(1,500 - 150)Q - 14,000
We equalize each other and solve for Q
(1,000 - 90) Q - 8,500 = (1,500 - 150)Q - 14,000
910Q - 8,500 = 1,350Q - 14,000
14,000 - 8,500 = (1,350 - 910)Q
5,500 = 440Q
5,500/440 = Q
12.5 = Q
A company's inventory records report the following:
August 1 Beginning balance 27 units @ $17
August 5 Purchase 22 units @ $16
August 12 Purchase 26 units @ $17
On August 15, it sold 54 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?
Using the FIFO perpetual inventory method, the value of the inventory at August 15, after the sale, using the FIFO perpetual inventory method, is $442.
The FIFO (First-In, First-Out) perpetual inventory method is an accounting approach used to value inventory and determine the cost of goods sold (COGS) in a perpetual inventory system. It assumes that the earliest items purchased are the first ones sold.
Under the FIFO method, the cost of goods sold is calculated by using the cost of the oldest or earliest inventory items available in stock. This means that when a sale occurs, the cost of the items sold is based on the cost of the oldest inventory acquired.
Learn more about FIFO perpetual inventory here:
https://brainly.com/question/30113315
#SPJ6
The correct answer is A. "$377", as using the First In, First Out perpetual inventory method, the value of the inventory on August 15 after the sale is $377.
To determine the value of the inventory on August 15 using the First In, First Out perpetual inventory method, follow these steps:
Start with the beginning balance of 27 units at $17 each.Add the purchase made on August 5 of 22 units at $16 each.Add the purchase made on August 12 of 26 units at $17 each.Calculate the total units available before the sale, which is 75 units (27 + 22 + 26).Determine the cost of the 54 units sold. Using First In, First Out, the first 27 units come from the beginning balance, and the next 27 units come from the August 12 purchase.The cost of the 54 units sold is (27 units x $17) + (22 units x $16) + (5 units x $17) = $918.Subtract the cost of the sold units from the total initial inventory valuation to find the remaining inventory.After performing these calculations, the remaining inventory on August 15 is valued at $377. Therefore, the correct answer is A. $377.Full Question:
A company's inventory records report the following:
August 1 Beginning balance 27 units at $17
August 5 Purchase 22 units at $16
August 12 Purchase 26 units at $17
On August 15, it sold 54 units. Using the First In, First Out perpetual inventory method, what is the value of the inventory at August 15 after the sale?
A. $377
B. $918
C. $1,575
D. $357
E.$1,029
All else equal, if there are diminishing returns, then what happens to productivity if both capital and labor increase?
a. Productivity will definitely fall.
b. Productivity will definitely be unchanged.
c. Productivity will definitely rise.
d. None of the above are necessarily correct.
Answer:
a. Productivity will definitely fall.
Explanation:
The productivity of a firm is directly associated with the type of return on inputs. If marginal returns on inputs are increasing, the increase in an input quantity will increase output more than proportionally. If the marginal returns of the inputs are constant, for each increase in the amount of inputs, there will be an increase of one unit produced. If the marginal return on inputs is decreasing, the increase in input quantity will lead to a less than proportional increase in output. Thus, the increase of one unit of capital and labor will generate less than one unit produced. Thus, it will be necessary to increase more than one unit of each input to produce one unit of good, that is, productivity will be decreasing.
At the end of January, Mineral Labs had an inventory of 925 units, which cost $9 per unit to produce. During February the company produced 1,650 units at a cost of $13 per unit. a. If the firm sold 2,350 units in February, what was the cost of goods sold? (Assume LIFO inventory accounting.) b. If the firm sold 2,350 units in February, what was the cost of goods sold? (Assume FIFO inventory accounting.)
Answer:
A) Cost of goods sold= $27750
B) Cost of goods sold= $26850
Explanation:
Giving the following information:
Beginning inventory: 925 units; $9 each
Production: 1650 units; $13 each
A) The firm sold 2,350 units in February, what was the cost of goods sold? (LIFO)
1650 units at $13= $21450
700 unit at $9= $6300
Cost of goods sold= $27750
B) The firm sold 2,350 units in February, what was the cost of goods sold? (FIFO)
925 units at $9= $8325
1425 units at $13= $18525
COGS= $26850
The cost of goods sold using LIFO inventory accounting is $14,175, while the cost of goods sold using FIFO inventory accounting is $11,325.
Explanation:a. To determine the cost of goods sold using LIFO inventory accounting, we need to start with the ending inventory and subtract the units sold. In this case, the ending inventory is 925 units, and the firm sold 2,350 units. The cost per unit for the ending inventory is $9. Using LIFO, we assume that the most recently produced units are sold first. So, we will subtract 925 units at a cost of $9 per unit from the total units sold. The cost of goods sold using LIFO is $(2,350 - 925) * $9 = $14,175.
b. To determine the cost of goods sold using FIFO inventory accounting, we assume that the oldest units are sold first. So, we will subtract 925 units at a cost of $9 per unit from the total units sold. The cost of goods sold using FIFO is $(2,350 - 925) * $13 = $11,325.
Learn more about Cost of Goods Sold here:https://brainly.com/question/33405095
#SPJ3
Luther Inc., has 1,000 shares of 8%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2016, and December 31, 2017. The board of directors declared and paid a $3,000 dividend in 2016. In 2017, $12,000 of dividends are declared and paid. What are the dividends received by the preferred shareholders in 2017?
Answer:
The dividends received by the preferred shareholders in 2017 is $7,000
Explanation:
The computation of the preference shareholder dividend is shown below:
= Dividend declared - total preference dividend
= $12,000 - $5,000
= $7,000
where,
dividend declared = $12,000
Each year dividend = Number of shares × $ per share price × rate
= 1,000 shares × $50 × 8%
= $4,000
Since the dividend was paid on 2016 is $3,000
So, the balance would be = $4,000 - $3,000
= $1,000
So the total preferred dividend in 2017 = $4000 + $1,000 = $5,000
Final answer:
In 2017, preferred shareholders of Luther Inc. received a total of $5,000 in dividends, which includes $1,000 carried over from unpaid dividends in 2016 and their annual dividend of $4,000.
Explanation:
The question at hand requires us to calculate the dividends received by preferred shareholders of Luther Inc. in 2017.
Luther Inc. has 1,000 shares of 8%, $50 par value, cumulative preferred stock. The first step is to calculate the annual dividend for these preferred shares: 8% of $50 par value equals $4 per preferred share annually. Given that it's cumulative preferred stock, any unpaid dividend from previous years must first be paid out before common shareholders can receive dividends.
In 2016, the company declared and paid a $3,000 dividend. The total annual dividend for preferred shareholders is the number of shares (1,000) multiplied by the per-share dividend ($4), which equals $4,000. Therefore, in 2016, the preferred shareholders were owed $4,000 but only received $3,000, leaving $1,000 in unpaid dividends that carry over to the next year (2017) due to the cumulative feature.
In 2017, $12,000 of dividends are declared and paid. First, we pay the carried-over dividend of $1,000 from 2016. The remaining $11,000 would then be distributed to the preferred shares before any dividends are paid to common shareholders. With each preferred share entitled to $4 yearly, this equates to 2,750 shares (if all goes to preferred, which would not happen in reality because once preferred dividends are covered, the rest goes to common). However, since there are only 1,000 preferred shares, it means preferred shareholders would receive their entire annual dividend of $4 per share, totaling $4,000 for 2017.
Dividends received by preferred shareholders in 2017
The preferred shareholders receive the unpaid $1,000 from the previous year plus the annual dividend of $4,000, totaling $5,000 in 2017.
Chuck Sox makes wooden boxes in which to ship motorcycles. Chuck and his three employees invest a total of 40 hours per day making the 200 boxes. a) Their productivity = nothing boxes/hour (round your response to two decimal places). Chuck and his employees have discussed redesigning the process to improve efficiency. Suppose they can increase the rate to 400 boxes per day. b) Their new productivity = nothing boxes/hour (round your response to two decimal places). c) The unit increase in productivity is nothing boxes/hour (round your response to two decimal places). d) The percentage LOADING... increase in productivity is nothing% (enter your response as a percentage rounded to two decimal places).
Answer:
a) 5 boxed -per-hour
b) the increase in outpu to 400 will increase productivity to 10 boxes
c) increase in 5 boxed per hour
d) it increase by 100%
Explanation:
chunk and three employees 40 hours (ten hours each) to produce 200 boxes.
a) productivity:
output / hours
200 / 40 = 5
b) new productivity:
output/ hours
400 / 40 = 10
c) new productivity - old productivity = change in productivity
10 boxes per hour - 5 boxes per hour = 5 boxes per hour
d) percent:
increase / base productivity x 100
5 boxes per hour / 5 boxes per hour x 100 = 100%
Given the following cash flows for a capital project, calculate its payback period and discounted payback period. The required rate of return is 8%. The discounted payback period is: Year 0 1 2 3 4 5 Cash flow –50,000 15,000 15,000 20,000 10,000 5,000 A. 0.16 years longer than the payback period. B. 0.51 years longer than the payback period. C. 1.01 years longer than the payback period.
Answer:
Ans. c) Discounted period is 1.01 years longer than payback period.
Explanation:
Hi, the payback period is the time that takes for the initial invesment to return to the investor (regardless of the time value of money), so we add the cash flow for every period until the result is zero.
The discounted payback period is almost the same, here we do take into account the time value of money. let´s check out the math to this.
Payback period
Period Cash Flow Adding cash flows Coefficient Payback
0 -$50,000.00 -$50,000.00 3
1 $15,000.00 -$35,000.00 1
2 $15,000.00 -$20,000.00 1
3 $20,000.00 $- 1
4 $10,000.00
5 $5,000.00
Payback period = 3
Discount rate 8%
Period Cash Flow Present Value Adding Cash Coefficient
0 -$50,000.00 -$50,000.00 -$50,000.00
1 $15,000.00 $13,888.88 -$36,111.11 1
2 $15,000.00 $12,860.08 -$23,251.03 1
3 $20,000.00 $15,876.64 -$7,374.38 1
4 $10,000.00 $7,350.29 -$24.09 1
5 $5,000.00 $3,402.91 0.01
Discounted payback period = 4.01
The only thing here that needs some further explanation is the 0.01, this is by doing the following calculation.
[tex]Coefficient=\frac{24.09}{3402.91} =0.01[/tex]
This is the fraction of the year that will turn those $24.09 in zero (taking into account the cash flow of period 5 which is 3402.91)
So, discounted payback period - Payback period= 4.01 - 3 = 1.01
Best of luck.
Peter, a passionate athlete, uses sports shoes manufactured by Friction Shoes Inc. because of their high quality soles. When Friction Shoes introduced a new line of shoes, Peter could not afford to buy them. Nevertheless, he feels that they are the best in the market. In this case, Peter belongs to the segment of _____.
a. global citizens
b. global dreamers
c. antiglobals
d. global agnostics
Fast Eddie’s Used Cars will sell you a 1989 Mazda Miata for $5,000 with no money down. You agree to make weekly payments for 2 years, beginning one week after you buy the car. The stated rate on the loan is 13%. How much is each payment? (A) $99.65 (B) $42.96 (C) $54.66 (D) $68.19 (E) $75.90
Answer:
C
Explanation:
We calculate the amount of each payment (constant payments; the same amount each period) with the formula attached: PV is present value, i is the interest rate and n is the number of periods.
The problem gives the following information:
PV= $5,000 (The amount you would pay if you had all the money today)
i= 13% (This rate is normally an annual rate, then we must convert it into a periodic (weekly) rate in order to calculate each weekly payment)
n= 1 year have approximately 52 weeks, 2 year have 104 weeks.
To transform the interest rate we use this formula:
Weekly rate= ((1+annual rate)^(1/# periods))-1
Weekly rate= ((1+0,13)^(1/52))-1
Weekly rate= 0,00235= 0.23%
Then we replace the values in the formula attached:
PV= $5,000
i=0,235%
n=104
A= $54,30 (It is almost equal to option C, maybe you must use more decimal places to obtain exactly $54,66)
Each payment will be approximately $54,66 each week for 2 years.
To calculate the weekly payment, we use the present value of an annuity formula. Plugging in the values, we find that each weekly payment is approximately $68.19.
Explanation:To calculate the weekly payment, we need to use the formula for the present value of an annuity:
PV = C * ((1 - (1 + r)^-n) / r)
Where:
PV = Present value (the loan amount)C = Weekly paymentr = Interest rate per period (in this case, weekly)n = Total number of periodsIn this case, the loan amount is $5,000, the interest rate is 13% per year (which converts to approximately 0.25% per week), and the total number of periods is 104 (2 years x 52 weeks/year). Plugging these values into the formula, we get:
$5,000 = C * ((1 - (1 + 0.0025)^-104) / 0.0025)
Solving for C, we find that each weekly payment is approximately $68.19. Therefore, the answer is (D) $68.19.
Fox Corp. has been asked to quote a sales price for additional units of its product. These additional products are above its typical monthly production run of 5,000 units. The relevant data to prepare the quote is as follows: Additional Requested Units: 33 Labor hours to produce 1 unit: 0.79 Labor Cost per hour: $89.98 Material Cost per unit: $203.05 Other Manufacturing Expenses: 18% of the direct labor expense SG&A Expenses remain unchanged at: $173,000 Required Net Margin: 9.3% Compute the COGS per Unit.
Answer:
The COGS per Unit is $286.92
Explanation:
The computation of the cost of goods sold per unit is shown below:
= Material Cost per unit + Labor cost per unit + Other Manufacturing Expenses
where,
Material Cost per unit is $203.05
Labor cost per unit = Labor hours to produce 1 unit × Labor Cost per hour
= 0.79 × $89.98
= $71.08
And, the other manufacturing expenses = 18% of Labor cost per unit
= 18% × $71.08
= $12.79
Now put these values to the above formula
So, the value would equal to
= $203.05 + $71.08 + $12.79
= $286.92
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Assume that David invests $50,000 for a one-fourth interest. Goodwill is to be recorded. The journal to record David's admission into the partnership will include:
A. a credit to cash for $50,000.
B. a debit to goodwill for $7,500.
C. a credit to David, Capital for $60,000.
D. a credit to David, Capital for $50,000.
Answer:
C. a credit to David, Capital for $60,000.
Explanation:
140,000 + 40,000 + 50,000 = 230,000
After the capital Allen and Daniel own 75% of the partnership:
180,000 = 75%
We can calculate for the 100% of the partnership
100% = 240,000 partnership after
David receive 25% = 60,000
but his contribution is for 50,000
goodwill of 10,000
journal entry
Cash 50,000
goodwill 10,000
David Capital 60,000
To record David's admission into the partnership, the cash account will be credited by $50,000, goodwill will be debited by $5,000, and David's capital account will be credited by $50,000.
Explanation:The subject of this question revolves around partnership accounting principles, specifically, the accounting for admission of a new partner in a business partnership. Assuming that David invests $50,000 for a one-fourth interest in an AD partnership where the total capital is $180,000 (Allen's capital $140,000 + Daniel's capital $40,000), he would need to have his share valued at $180,000/4 = $45,000. However, David is contributing $50,000, which is $5,000 more than his share value. This shows the existence of goodwill of $5,000 in the business. The accounting for these transactions will involve a credit to cash for $50,000 (reflecting David's contribution to the partnership's cash), a debit to Goodwill for $5,000 (recording the excess value of David's contribution) and a credit to David, Capital for $50,000 (reflecting David's capital account balance after his admission).
Learn more about Partnership Accounting here:https://brainly.com/question/29736450
#SPJ3