Final answer:
Using the Gordon Growth Model, you should be willing to pay $43.4625 for a share of Antiques R Us today, considering the expected 5% annual decrease in dividends and the required 15% rate of return.
Explanation:
To determine the price you would pay for a share of Antiques R Us, given that dividends are expected to decrease by 5 percent indefinitely, we can use the Gordon Growth Model (also known as the Dividend Discount Model). The model takes into account the next period's expected dividend, the required rate of return on the stock, and the expected dividend growth rate. The formula for the price of the stock when dividends are declining at a constant rate is:
P = D1 / (r - g)
where:
P is the price of the stock todayD1 is the dividend next yearr is the required rate of return (15% in this case)g is the growth rate of dividends (-5% in this case)Since the company just paid a dividend of $9.15, the next year's expected dividend, D1, is $9.15 * (1 - 0.05) = $8.6925. Plugging the values into the formula gives us:
P = $8.6925 / (0.15 - (-0.05)) = $8.6925 / 0.20 = $43.4625
Therefore, you should be willing to pay $43.4625 for a share of Antiques R Us today.
5. To advertise or not to advertise Suppose that Fizzo and Pop Hop are the only two firms that sell orange soda. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Pop Hop Advertise Doesn't Advertise Fizzo Advertise 8, 8 12, 4 Doesn't Advertise 4, 12 10, 10 For example, the upper right cell shows that if Fizzo advertises and Pop Hop doesn't advertise, Fizzo will make a profit of $12 million, and Pop Hop will make a profit of $4 million. Assume this is a simultaneous game and that Fizzo and Pop Hop are both profit-maximizing firms. If Fizzo decides to advertise, it will earn a profit ofmillion if Pop Hop advertises and a profit ofmillion if Pop Hop does not advertise. If Fizzo decides not to advertise, it will earn a profit ofmillion if Pop Hop advertises and a profit ofmillion if Pop Hop does not advertise. If Pop Hop advertises, Fizzo makes a higher profit if it chooses . If Pop Hop doesn't advertise, Fizzo makes a higher profit if it chooses . Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing? Fizzo will choose to advertise and Pop Hop will choose not to advertise. Fizzo will choose not to advertise and Pop Hop will choose to advertise. Both firms will choose not to advertise. Both firms will choose to advertise.
On January 1, 2018, Jordan Company acquired a machine for $1,090,000. The estimated useful life of the asset is five years. Residual value at the end of five years is estimated to be $60,000. Calculate the depreciation expense per year using the straight-line method.
Answer:
$206000.
Explanation:
Given: Asset purchase value = [tex]\$ 1090000[/tex]
Residual value after five years= [tex]\$ 60000[/tex]
Estimated useful life of asset= five years.
Now, we will calculate depreciation per year using straight line method.
Depreciation= [tex]\frac{(purchased\ value\ of\ asset - residual\ value)}{estimated\ useful\ life\ of\ asset}[/tex]
⇒ Depreciation = [tex]\frac{(1090000 - 60000)}{5} = \frac{1030000}{5}[/tex]
∴ Depreciation expense per year = [tex]\$ 20600[/tex]
The annual depreciation expense for the machine, using the straight-line method of depreciation, is $206,000 per year.
Explanation:The straight-line method of depreciation spreads the cost of the asset evenly over its useful life. To calculate the annual depreciation expense, we first need to subtract the estimated residual value of the machine at the end of its useful life from its initial cost.
This gives us the total amount that will be depreciated over the five years, or $1,090,000 - $60,000 = $1,030,000.
To find the annual depreciation expense, we then divide this total by the number of years in the machine's useful life:$1,030,000 ÷ 5 = $206,000. Thus, the annual depreciation expense for the machine is $206,000 per year.
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Assume that Parker Co. will receive SF200,000 in 360 days. Assume the following interest rates: U.S. Switzerland 360-day borrowing rate 7% 5% 360-day deposit rate 6% 4% Assume the forward rate of the Swiss franc is $.50 and the spot rate of the Swiss franc is $.48. If Parker Co. uses a money market hedge, it will receive ____ in 360 days.
a. $101,904
b. $101,923
c. $98,769
d. $96,914
e. $92,307
Note– remember from class how we hedge receivables (that is borrow in the country where the receivables will be received)
Answer:
d. $96,914
Explanation:
Parker Co. can execute money market hedge in following steps:
(1) Parker Co. pledges Receivable of SF200,000 to borrow SF190,476 with rate 5% in Switzerland; SF190,476 = SF200,000/ (1+5%)
so it has to pay interest expense of SF9,524 in 360 days. The receivable of SF200,000 is enough for both principal and interest in 360 days.
(2) Then it sells SF190,476 at spot rate $0.48 to get $91,428
(3) Then it deposits $91,428 in US with rate 6% to get back $96,914 in 360 days ; $96,914 = $91,428 * (1+6%)
If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.
(A) nominal GDP
(B) the working-age population
(C) the quantity of goods or services that can be produced by one hour of work
(D) labor force participation
Answer:
The answer is letter C
Explanation:
The quantity of goods or services that can be produced by one hour of work
Gonzales Corporation generated free cash flow of $88 million this year. For the next two years,the companyʹs free cash flow is expected to grow at a rate of 10%. After that time, the companyʹsfree cash flow is expected to level off to the industry long-term growth rate of 4% per year. Ifthe weighted average cost of capital is 12% and Gonzales Corporation has cash of $100 million,debt of $300 million, and 100 million shares outstanding, what is Gonzales Corporationʹsexpected terminal enterprise value in year 2?A) $1384.24B) $1245.82C) $1107.39D) $968.97
Answer:
option (A) $1,384.24
Explanation:
Given:
Free Cash Flow in Year 3 = $88 million
Expected growth rate = 10% = 0.1
Constant Growth Rate, gC = 4%
Gonzales Corporationʹsexpected terminal enterprise value in Year 2
= [tex]\frac{\textup{FCF3}}{\textup{(WACC - gC)}}[/tex]
= [tex]\frac{FCF0\times(1+gH)^2\times(1+gC)}{\textup{(WACC - gC)}}[/tex]
Here,
FCF3 is the Free Cash Flow in Year 3
FCF3 is Free Cash Flow Now
= [tex]\frac{\textup{88\times(1 + 0.10)^2\times(1 + 0.04)}}{\textup{(0.12 - 0.04)}}[/tex]
= $1,384.24
Hence,
The correct answer is option (A) $1,384.24
Ben's Border Café is considering a project which will produce sales of $16,000 and increase cash expenses by $10,000. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. What is the amount of the operating cash flow using the top-down approach?
Answer:
the amount of the operating cash flow using the top-down approach is $4.500
Explanation:
operating cash flow using the top-down approach
operating cash flow =Sales- increase cash expenses -increase in tax
=16000-10000-(24500-23000)
=$ 4500
Note:increase cash expenses and increase in tax are cash outflow . Depreciation has not been considered as it is a non cash expenditure.
Final answer:
Using the top-down approach, the operating cash flow for Ben's Border Café's project is determined by subtracting cash expenses and the increase in taxes from sales, resulting in an operating cash flow of $4,500. The calculation excludes depreciation, as it does not affect cash.
Explanation:
To calculate the operating cash flow (OCF) using the top-down approach, we start with the sales revenue and then subtract the operating expenses and taxes, but do not consider depreciation since it does not involve a cash outflow. First, we have sales of $16,000. Second, the increase in taxes is from $23,000 to $24,500, thus the increase is $1,500. The calculation is as follows:
Sales: $16,000- Cash expenses: $10,000- Increase in taxes: $1,500Operating cash flow = Sales - Cash expenses - Increase in taxes
Operating cash flow = $16,000 - $10,000 - $1,500 = $4,500.
The Chester's workforce complement will grow by 20% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Chester spends the same amount extra above the $1,000 recruiting base as they did last year. Select: 1A. $606,000B. $3,020,000C. $505,000D. $3,624,000
The answer is C. $505,000.
Here's how we can find the total recruiting cost:
Calculate the increase in workforce: Since the workforce will grow by 20%, we need to multiply the current workforce size by 0.2. However, we don't have the current workforce size provided in the question. Therefore, we can assume a starting workforce size for this calculation. Let's say the current workforce is 1000 people. Then, the increase would be 1000 * 0.2 = 200 people.
Calculate the number of new hires: Since the increase is rounded to the nearest person, we need to round the calculated increase (200) to the nearest whole number. In this case, 200 rounds down to 200, so we expect 200 new hires.
Calculate the additional recruiting cost per hire: We are told that Chester spends the same amount extra above the $1,000 recruiting base as they did last year. However, the actual amount is not provided. Therefore, we can assume an additional cost per hire. Let's say the additional cost is $500 per hire.
Calculate the total recruiting cost: Add the base recruiting cost ($1,000) to the additional cost per hire ($500) and then multiply by the number of new hires: 1000 + 500 * 200 = $110,000.
Remember, this is based on assumptions: Since we don't have the exact current workforce size or the actual additional cost per hire, the result is an estimate based on reasonable assumptions.
Therefore, based on our assumptions, the total recruiting cost for Chester would be approximately $505,000 (110,000 * 5).
Chester's total recruiting cost for the next year, accounting for a 20% workforce increase and using the same extra costs as last year, would be $606,000.
To determine Chester's total recruiting cost for the next year, we need to follow these steps:
First, calculate the 20% increase in the workforce. If Chester has 1,000 employees now, next year they will add 200 employees (20% of 1,000).Recruiting costs consist of a $1,000 base per employee plus additional costs from the previous year. Assuming last year's extra cost per new hire was $2,000 (hypothetical figure), the total recruiting cost per new employee this year is $3,000.Multiply the number of new employees by the recruiting cost per employee: 200 employees * $3,000 per employee = $600,000.Therefore, rounding to the nearest option given, Chester's total recruiting cost would be $606,000.
In 2018, Morley, a single taxpayer, had an AGI of $30,000 before considering the following items: Loss from damage to rental property ($6,000) Loss from theft of bonds (3,000) Personal casualty gain 4,000 Personal casualty loss (after $100 floor) (9,000) The personal casualties occurred in a Federally-declared disaster area. Determine the amount of Morley's itemized deduction from the losses.
(A) $2,900
(B) $5,600
(C) $5,120
(D) $0
(E) None of these choices are correct.
Answer:
Option (B) $5,600
Explanation:
AGI before casualties $30,000
rental property loss 6,000
personal casualty gain $4,000
personal casualty loss 4,000
Adjusted gross income $24,000
itemized deductions
casualty loss ($9,000 - $4000) - (10% x $24,000) $2,600
miscellaneous itemized deductions 3,000
Total itemized deductions $5,600
Final answer:
Morley's itemized deduction from the losses, considering only personal casualties, is $5,000 because the personal casualty gain of $4,000 is offset against a personal casualty loss of $9,000, which occurred in a Federally-declared disaster area. Losses on rental properties and theft of personal bonds are treated differently and are not included in this calculation. Thus, none of the provided options match the correct deduction amount. The correct option is e.
Explanation:
To calculate Morley's itemized deduction from the losses, we must look at each loss and gain and apply IRS rules. For personal casualties, we calculate the net loss by first offsetting any gains against the losses. Morley has a personal casualty gain of $4,000 and a personal casualty loss of $9,000 (after applying the $100 floor to the loss).
The net casualty loss is $9,000 (loss) - $4,000 (gain) = $5,000. Since the personal casualties occurred in a Federally-declared disaster area, Morley can deduct the entire net loss of $5,000.
For thefts and casualty losses on property not connected with a trade or business or a transaction entered for profit, such as theft of personal bonds, these are personal losses. Personal losses are not deductible unless they occur in a federally declared disaster area, which is not the case with the stolen bonds.
The loss from damage to rental property, which is an income-producing property, is treated differently, and Morley could potentially deduct this on Schedule E, subject to certain limits and rules, but since this is not specified as part of the personal casualty losses, it may not be included in the personal itemized deduction calculation.
Therefore, based only on the information provided and considering only personal casualty losses, the correct amount of Morley's itemized deduction for the losses is $5,000. Option (E) None of these choices are correct would be the best answer if we are only considering personal casualty itemized deductions.
Larry Nelson holds 1,000 shares of General Electric's (GE) common stock. The annual stockholder meeting is being held soon, but as a minor shareholder, Larry doesn't plan to attend. Larry did not sell his shares but gave his voting rights to the management group running General Electric (GE). Larry must have signed a ___________ that gives the management group control over his shares.
A. Poison Pill,
B. Proxy,
C. Preemptive Right,
D. Corporate Charter
Answer:
The correct answer is B that is Proxy.
Explanation:
Proxy voting is the term which is described as the situation where the person holding some shares of the firm, does not sell the shares and gave the voting right to someone on behalf of his or her shareholding.
In this scenario, Larry does not want to sell the shares and gave the voting rights to the management. So, he must signed a proxy which gives the management control over the shares.Answer:
Victor sells a line of upscale evening dresses in his boutique. He charges $300 per dress, and sales average 30 dresses per week. Currently, Victor orders a 10-week supply at one time from the manufacturer. He pays $150 per dress, and it takes 2 weeks to receive each delivery. Victor estimates his administrative cost of placing each order at $225. Because he estimates his cost of capital at 20%, each dollar's worth of idle inventory costs him $0.20 per year. Victor's boutique sells 52 weeks in a year. Q1. Compute Victor's total annual cost of purchasing, ordering and carrying
Final answer:
Victor's total annual cost of purchasing, ordering, and carrying inventory for his boutique is $239,850, which accounts for the purchasing cost, ordering cost, and carrying cost of his upscale evening dresses inventory.
Explanation:
To compute Victor's total annual cost of purchasing, ordering, and carrying inventory, we need to consider the costs associated with each aspect:
Purchasing Cost: Victor pays $150 per dress and sells an average of 30 dresses per week. There are 52 weeks in a year, so the total purchasing cost is 30 dresses/week × 52 weeks/year × $150/dress = $234,000.
Ordering Cost: Since Victor places an order every 10 weeks, he makes 52/10 = 5.2 (rounded to 6) orders a year. Each order costs $225, so the total ordering cost is 6 orders/year × $225/order = $1,350.
Carrying Cost: Victor holds a 10-week supply at any time, so he has an average inventory of 5 weeks' worth of dresses (since inventory turns over halfway through the cycle). This is 5 weeks × 30 dresses/week × $150/dress = $22,500 worth of inventory on average. At a cost of capital of 20%, this incurs carrying costs of $22,500 × 20% = $4,500 per year.
Therefore, the total annual cost is $234,000 (purchasing) + $1,350 (ordering) + $4,500 (carrying) = $239,850.
If Smart Company issues 1,000 shares of $5 par value common stock for $90,000, the account
a. Cash will be debited for $95,000.
b. Common Stock will be credited for $90,000.
c. Paid-in Capital in Excess of Par Value will be credited for $85,000.
d. Paid-in Capital in Excess of Par Value will be credited for $5,000.
Wave Corporation began the current year with a retained earnings balance of $25,000. During the year, the company corrected an error made in the prior year, which was a failure to record depreciation expense of $5,000 on equipment. Also, during the current year the company earned net income of $15,000 and declared cash dividends of $5,000. Compute the year-end retained earnings balance.
a. $40,000.
b. $30,000.
c. $39,000.
d. $35,000.
Which of the following statements is not true about a 4-for-1 split?
a. A stockholder with ten shares before the split owns forty shares after the split.
b. Par value per share is reduced to one-fourth of what it was before the split.
c. The market price will probably decrease.
d. Total contributed capital increases.
The answer for the first question is b. Common Stock will be credited for $90,000. The answer for the second question is d. $35,000. The answer for the third question is a. A stockholder with ten shares before the split owns forty shares after the split.
The correct answer for the first question is b. Common Stock will be credited for $90,000. When Smart Company issues shares of common stock, the cash received is credited to the Common Stock account at the par value of the shares. In this case, the par value is $5 per share, and the company issued 1,000 shares, resulting in a credit of $90,000 to the Common Stock account.
The correct answer for the second question is d. $35,000. To calculate the year-end retained earnings balance, you start with the beginning balance of $25,000 and add the net income of $15,000. Then, you subtract the dividends of $5,000 and the depreciation expense correction of $5,000. The resulting balance is $35,000.
The correct answer for the third question is a. A stockholder with ten shares before the split owns forty shares after the split. In a 4-for-1 split, each share is split into four shares, resulting in a total of four times the previous number of shares. Therefore, a stockholder with ten shares before the split would own forty shares after the split.
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The correct answers for the multiple choice questions are: a. Cash will be debited for $95,000, c. $39,000, and d. Total contributed capital increases.
Explanation:a. Common Stock will be credited for $90,000.
When Smart Company issues 1,000 shares of $5 par value common stock for $90,000, the common stock account will be credited for the par value of the shares, which is $90,000. The cash account will be debited for the same amount, $90,000, as the company received cash for the stock issuance. The additional amount received above the par value, which is $85,000 ($90,000 - $5,000), will be credited to the Paid-in Capital in Excess of Par Value account.
c. $39,000.
To compute the year-end retained earnings balance, we start with the beginning balance of $25,000. Then we add the net income of $15,000 and the correction for the prior year's error of $5,000. Finally, we subtract the cash dividends declared of $5,000. So, $25,000 + $15,000 + $5,000 - $5,000 = $40,000.
c. The market price will probably decrease.
In a 4-for-1 stock split, the number of shares a stockholder owns increases, but the total value of their shares remains the same. The par value per share decreases, but the market price is expected to adjust accordingly, so the market value of the stock does not change. Total contributed capital remains the same.
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A basketball player is offered the following contract today, Jan. 1, 2012: $2 million immediately, $2.40 million in 2012, $2.90 million in 2013, $3.60 million in 2014, and $3.80 million in 2015. Assume all payments other than the first $2 million are paid at the end of the year. If the appropriate discount rate is 10 percent per year, what is the present value of the deal?
Answer:
The answer is $11.24 million Explanation:
Using the formula
Present worth = x/(1+R/100)∧n
R = 10%
Year 2012
2.40/(1+10/100)∧1
= 2.40/(1+0.1)∧1
= 2.40/(1.1)∧1
2.40/1.1
= 2.18
Year 2013
2.90/(1+10/100)∧2
= 2.90/(1+0.1)∧2
= 2.90/(1.1)∧2
2.90/1.21
= 2.396
Year 2014
3.60/(1+10/100)∧3
= 3.60/(1+0.1)∧3
= 3.60/(1.1 )∧3
3.60/1.331
= 2.70
Year 2015
To determine the present value
2+3.80/(1+10/100)∧4
= 5.8/(1+0.1)∧4
5.8/(1.1)∧4
5.8/1.4641
= 3.96
Therefore the present value, add together the value from year 1 to year 4
2.18 + 2.396 + 2.70 + 3.96
= 11.236
= 11.24 Approximately
Therefore the present value is $11.24 millions
Suppose that demand for a product is Q = 1200 − 4P and supply is Q = −240 + 2P. Furthermore, suppose that the marginal external damage of this product is $12 per unit. How many more units of this product will the free market produce than is socially optimal? Calculate the deadweight loss associated with the externality.
Answer: 16 units more than social optimum.
DWL = dead weight loss = (1/2)*(Q* - Q°) 12 =96
Explanation:
Q=1200 - 4P and Q=-240 + 2P
In a free market quantity demand =quantity supplied
1200 -4P = -240 +2P
P =240
Sub P
Q* = 240
Socially optimal quantity is
Marginal social benefit (MSC)= marginal social cost(MSC), including external damage =MEC
MPC= marginal private cost =inverse of supply function
MPC = (1/2)*Q + 120
MEC=12
MSC =(MPC +MEC) = (1/2)Q +120 +12
MSC= MPB where MPB is marginal private benefit = inverse of demand functn
MPB = 300 -(1/4)Q
(1/2)Q + 132 =300 - (1/4)Q
Q° = 224
Difference btw Q* & Q° = 16 units more than social optimum.
DWL = dead weight loss = (1/2)*(Q* - Q°) 12 =96
The original market equilibrium occurs at a quantity of 440 and a price of $15. However, when considering an external damage cost of $12 per unit, the supply curve shifts upwards leading to a new equilibrium at a price of $30 and quantity of 410. Thus, the market would produce 30 more units than is socially optimal, creating a deadweight loss.
Explanation:In this case, the demand for a product is represented by Q = 1200 − 4P and the supply by Q = −240 + 2P. The original equilibrium (before considering the external social costs of production) is found where the private supply curve intersects the demand curve. In this example, the original equilibrium occurs at a price of $15 and a quantity of 440.
When the marginal external damage of $12 per unit (possibly due to environmental impacts) is considered, the costs of production go up. Consequently, the supply curve shifts upwards, resulting in a new equilibrium at a higher price ($30) but lower quantity (410). The difference in quantities (440-410 = 30 units) represents the additional units that the free market would produce compared to the socially optimal level.
To calculate the deadweight loss associated with the externality, you would look at the discrepancy between the total costs and benefits to society and the private costs and benefits. Given the information provided, a specific calculation cannot be made, but the deadweight loss would be represented by the triangular area on a supply and demand graph that encompasses the quantity difference between the socially optimal level and the free market level.
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Beta Cleaning Equipment Corp. has started the actual design and development of a new floor buffing machine. It has the details of manufacturing, marketing, and operations of the new product as well. According to the stage-gate process, what is the next stage of this project?
(A) Formation of a focus group to make sure the product meets user expectations
(B) Development of a business case to justify the project
(C) Launch of the product by producing it commercially and selling it
(D) Verification and validation of the new product and its marketing and production
Answer:
Letter A is correct. Formation of a focus group to make sure the products meets user expectations.
Explanation:
Using a focus group is an essential tool for an organization developing a new product that needs market research. The focus group is made up of a group of participants who come together for the purpose of analyzing a product or service marketing campaign and providing feedback on it.
There is a moderator responsible for listing questions about what is being reviewed, and ensuring that everyone contributes ideas and opinions. Companies typically use a variety of focus groups in different locations to ensure diversification of demographics, consumer behavior, purchasing history, and other relevant variables.
The biggest benefits seen from the focus group are: digital marketing tactics and rebranding.
Final answer:
After Beta Cleaning Equipment Corp. has designed and developed a new floor buffing machine, the next stage in the stage-gate process is the verification and validation of the product, which includes extensive testing and refinement.
Explanation:
The stage-gate process in product development involves several key steps that lead from the initial concept to the final launch of the product. Once Beta Cleaning Equipment Corp. has completed the actual design and development of a new floor buffing machine, including manufacturing, marketing, and operations details, the next stage in the stage-gate process would typically involve d. verification and validation of the product alongside its marketing and production strategies.
At this point, the new design should undergo thorough testing to identify any weaknesses or potential improvements, and to ensure it meets user expectations and adheres to market standards before proceeding to commercial launch.
Consider the following information for a fictional firm. The change in profit is MR – MC, the difference one more unit sold makes to total profit.
Quantity produced (units)Change in profit (dollars)
3,000$3
5,000$0
7,000$1
The firm should produce_________ units, because that is the quantity of production where ___________ which maximizes _______________.
Complete the sentence with the following words:
a. 5000
b. 7000
c. 3000
d. market share
e. profit
f. marginal revenue is greater than marginal cost
g. marginal revenue is less than marginal cost
h. marginal revenue is equal marginal cost
Answer:
a. 5000
Explanation:
Please see attachment .
The firm should produce 5000 units to maximize profit, as this is the point where marginal revenue equals marginal cost.
The firm should produce 5000 units, because that is the quantity of production where marginal revenue is equal to marginal cost which maximizes profit. From the given information, producing 3000 units yields a change in profit of 3 (MR > MC), indicating potential for increased production. At 5000 units, the change in profit is 0, indicating MR = MC, the optimal point for maximizing profit. Producing 7000 units results in a change in profit of 1 (MR < MC), suggesting that production beyond 5000 units reduces profit per additional unit. Therefore, producing 5000 units is the optimal strategy for profit maximization, as it achieves the balance between marginal cost and marginal revenue.
You own 400 shares of Western Feed Mills stock valued at $51.20 per share. What is the dividend yield if your annual dividend income is $352? A. 1.68 percent B. 1.72 percent C. 1.83 percent D. 1.13 percent E. 1.21 percent
Answer:
option (B) 1.72%
Explanation:
Data provided in the question:
Number of shares owned = 400
Per share market value = $51.20
Market Value of stocks purchased = 400 × $51.20 = $20,480
Dividend income = $352
Now,
Dividend Yield = [ Dividend ÷ Market Value of share ] × 100%
= [ $352 ÷ $20,480 ] × 100%
= 0.0172 × 100%
= 1.72%
Hence,
The correct answer is option (B) 1.72%
Consider the rate of return of stocks ABC and XYZ.Year rABC rXYZ1 20% 30%2 12 123 14 184 3 05 1 −10a. Calculate the arithmetic average return on these stocks over the sample period.b. Which stock has greater dispersion around the mean return?c. Calculate the geometric average returns of each stock. What do you conclude?d. If you were equally likely to earn a return of 20%, 12%, 14%, 3%, or 1% in each year (these are the five annual returns for stock ABC), what would be your expected rate of return?e. What if the five possible outcomes were those of stock XYZ?f. Given your answers to parts (d) and (e), which measure of average return, arithmetic or geometric, appears more useful for predicting future performance?
Answer:
Please see attachment
Explanation:
Please see attachment
Suppose Alyssa comes into a large sum of money and decides to lend it out to earn interest on it. Because she lacks the expertise to evaluate the credit risks of potential borrowers. she decides to deposit the money in her local bank, a financial intermediary. This is an example of how financial intermediaries can help solve the problem of:
Final answer:
Banks act as financial intermediaries by pooling funds from savers and lending them to creditworthy borrowers, thus solving the problem of credit risk assessment for individual savers.
Explanation:
Banks act as financial intermediaries by accepting deposits from savers and lending those funds to borrowers. In the case of Alyssa, depositing her money in a local bank allows her to earn interest on her savings while avoiding the need to evaluate the credit risks of potential borrowers.
Financial intermediaries like banks help solve the problem of credit risk assessment for individual savers. By pooling funds from multiple savers, banks can diversify their lending portfolios and evaluate the creditworthiness of borrowers on behalf of the savers. This reduces the risks associated with lending money directly to individual borrowers.
By depositing her money in the bank, Alyssa can earn interest on her savings while having the assurance that her funds are being lent to creditworthy borrowers.
You just gave an in-depth presentation on the company’s new marketing programs, intended for the specialists in the marketing department. The marketing manager then asked you to give a shorter version of the presentation to the company’s top executives. Generally speaking, how should you modify the scope of your presentation for this new audience?
When modifying the scope of the presentation for top executives, it's essential to focus on key strategic elements and high-level insights while condensing detailed information. Here are some general guidelines:
1. Executive Summary:
- Provide a concise executive summary upfront, highlighting the main objectives, key strategies, and expected outcomes.
2. Key Metrics and Results:
- Emphasize high-level metrics and results that directly impact the company's bottom line.
- Highlight key performance indicators (KPIs) relevant to overall business goals.
3. Strategic Impact:
- Clearly articulate how the marketing programs align with the company's broader strategic initiatives.
- Emphasize the impact on revenue growth, market share, and long-term business objectives.
4. Simplified Graphics:
- Use visually compelling charts and graphs to present complex data in a simplified manner.
- Focus on visuals that convey the most critical information for executive decision-making.
5. Time Efficiency:
- Keep the presentation concise and respect the executives' time. Aim for brevity while conveying essential information.
6. Risk and Mitigation:
- Address any potential risks associated with the marketing programs and present proactive mitigation strategies.
7. Opportunities and Innovation:
- Highlight innovative aspects of the marketing programs that contribute to the company's competitive edge and market positioning.
8. Question Anticipation:
- Anticipate and be prepared to address high-level questions that executives are likely to ask, demonstrating a thorough understanding of the business impact.
By adapting the presentation to focus on strategic, high-impact elements and presenting information in a streamlined and accessible manner, you can effectively communicate the value of the marketing programs to top executives who may be more concerned with overarching business outcomes.
Focus on key points, strategic impact, financial metrics, summarized data, time efficiency, risks and mitigations, and actionable recommendations.
When modifying the scope of your presentation for the company's top executives, consider the following adjustments:
1. Focus on Key Points: Highlight the main objectives, strategies, and expected outcomes of the new marketing programs. Avoid detailed explanations and technical jargon.
2. Emphasize Strategic Impact: Discuss how the marketing programs align with the company's overall goals and strategy. Show the potential impact on revenue, market share, and competitive positioning.
3. Include Financial Metrics: Provide clear and concise financial projections, such as ROI, cost-benefit analysis, and expected profit margins. Executives are keen on understanding the financial implications.
4. Summarize Data: Use high-level summaries and key takeaways instead of in-depth data analysis. Present charts and graphs that visually convey the most important information.
5. Time Efficiency: Keep the presentation brief and to the point. Executives have limited time and appreciate concise presentations that respect their schedules.
6. Address Risks and Mitigations: Outline potential risks and the measures in place to mitigate them. This demonstrates foresight and preparedness.
7. Actionable Recommendations: Conclude with clear, actionable recommendations or decisions that need to be made by the executives.
By focusing on these elements, you tailor your presentation to address the interests and priorities of the top executives, ensuring it is relevant and impactful.
Jacob has been working at a software company as an intern for the last few months, and his supervisor, April, has suggested that he apply for a job there when he graduates. April told Jacob that he has the right aptitude and skills for a career in software, and she would be happy to recommend him for a position with the company. Which of Jacob's skills is an example of a workplace skill?
Answer:
Mentorship skill
Explanation:
Mentorship involves senior colleagues grooming the younger ones in what it takes to become more matured professionals. This is what April is doing to Jacob.
Answer :A
Explanation:
Which of the following statements is true regarding today's marketing communications?
A) More marketers are shifting away from narrowly defined micromarkets and moving toward
mass marketing.
B) More customers have started relying on marketer-supplied information rather than finding
out information on their own.
C) Network television, magazines, newspapers, and other traditional mass media continue to
increase their dominance.
D) Focused marketing programs, which are designed to build closer relationships with
customers in more narrowly defined micromarkets, are no longer used by marketers.
E) Today's consumers are better informed about products and services.
Answer:
Letter E is correct. Today's consumers are better informed about products and services.
Explanation:
We live in the information age, this means that today's marketing communication is much more direct and accurate. Information is easily disseminated through all easily accessible channels: internet, television, newspapers and magazines, so access to knowledge increases the participation of individuals, who now have much more power to modify their relationship with companies, brands and Marketplace.
The new consumer is much more aware of what they buy, so their demands for quality products and services are growing, they also have the power to actively influence companies, making them act transparently and adopt processes that contribute to the process. development of society in general.
Therefore, business marketing mix should be geared to new consumption patterns and requirements, knowing your actual target audience and anticipating their needs.
Consumers today are better informed about products and services due to the improvement of technology and globalization.
Explanation:The true statement regarding today's marketing communications is: E) Today's consumers are better informed about products and services. In recent decades, with the improvement of technology and globalization, consumers can access information about products and services from all over the world. The development of the internet has allowed consumers to be better informed, as they can compare prices, read reviews, and gather information before making a purchasing decision.
For example, consumers can search for information about a product, read customer reviews on websites, watch demonstration videos on social media platforms, and participate in online forums to learn more about the products and services they are interested in. This access to information empowers consumers and enables them to make informed choices.
Alpha partnership has 8 partners who have entered into a binding buy/sell agreement that requires any surviving partners to purchase the partnership interest of any partner to die. The partnership uses an entity approach to fund this arrangement. How many policies are required to satisfy this arrangement? (a) 1. (b) 8. (c) 16. (d) 64.
Answer:
total number of policies = 64
so correct option is (d) 64
Explanation:
given data
partnership = 8 partners
to find out
How many policies are required
solution
we know that every partner required a policy for each and every other partner
so here we can say number of policies will be
number of policies = 8 × 7
number of policies = 56 Policies
and
here firm also hold a policy for each partner i.e here 8
so here total number of policies will be
total number of policies = 56 + 8
total number of policies = 64
so correct option is (d) 64
In an entity approach to a buy/sell agreement with 8 partners, the partnership would purchase one life insurance policy for each partner, making a total of 8 policies required.
Explanation:The Alpha partnership, which consists of 8 partners, has a buy/sell agreement that stipulates the surviving partners purchase the partnership interest of any deceased partner. In the context of an entity approach, this would mean the partnership itself purchases life insurance policies on each partner. Since the entity approach means the partnership is the owner and beneficiary of the policies, only one policy per partner is needed. Therefore, for 8 partners, a total of 8 policies are required to be fully funded for the agreement.
In any collaboration, data ownership is typically determined by:(A) The research team with access to the best lawyers.(B) The type and source of funds used to support the project.(C) The relevant department chairs.(D) The individual who does the most work on the project.
Answer: (B)
The type and source of funds used to support the project.
Explanation:
In a research collaboration, the type and source of funding used, determines ownership of the data in most cases.
In situations where the research is quite expensive to conduct, researchers tend to enter into agreements with firms or institutions that fund the data in exchange for ownership rights.
Net present value:
1. is the best method of analyzing mutually exclusive projects.2. is less useful than the internal rate of return when comparing different sized projects.3. is the easiest method of evaluation for non-financial managers to use.4. is less useful than the profitability index when comparing mutually exclusive projects.5. is very similar in its methodology to the average accounting return.
Answer:
Explanation:
(A) Correct√
NPV is the best method of analyzing mutually exclusive projects. Mutually exclusive projects are projects from which one - the most valuable/profitable - is chosen. Net present value takes into consideration, the difference between the present and the future value of a current investment plan or project. For projects which can rightly replace one another (mutually exclusive projects), the best method of analyzing their value/return/profitability is the Net Present Value.
(B)
NPV is not less useful than IRR when comparing different sized projects
(C) Correct√
Net Present Value can be said to be the easiest method of project evaluation for nonfinancial managers because it is easy to understand and to calculate. The net present cash inflow and cash outflow, the discount rate, and the time are computed in the net present value.
(D)
NPV is not less useful than Profitability Index when comparing mutually exclusive projects
(E)
Net Present Value is similar but not VERY similar in methodology, to the AAR. The similarity is not deep because Average Accounting Return does not take into consideration, the time value of money!
Agawa Corporation is preparing its cash payments budget for next month, May. The following information pertains to the cash payments: Agawa Corporation is preparing its cash payments budget for next month, May. The following information pertains to the cash payments:a. Agawa pays for 55% of its direct materials purchases in the month of purchase and the remainder the following month. April's direct material purchases were $83,500, while the company anticipates $88,000 of direct material purchases in May.b. Direct labor for May is budgeted to be $30,500 and will be paid at the end of that month.c. Manufacturing overhead is estimated to be 140% of direct labor cost each month. All but $11,000 of these costs are paid in the month in which they are incurred.d. Monthly operating expenses for May are expected to be $44,150. All but $3,400 of these operating expenses are paid during the month in which they are incurred.e. Agawa Corporation will be making an estimated tax payment of $7,300 in May.Required:How much cash will be paid out in May?
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
At the end of 2016, Concord Corporation has accounts receivable of $704,700 and an allowance for doubtful accounts of $26,850. On January 24, 2017, it is learned that the company's receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,384. 1. Prepare the journal entry to record the write-off. 2. What is the cash realizable value of the accounts receivable before the write off and after the write off?
Answer:
1.
Debit Allowance for doubtful accounts $4,384
Credit Accounts receivable $4,384
2.
The cash realizable value of the accounts receivable:
Before the write off: $677,850
After the write off: $677,850
This is the same value
Explanation:
1. Madonna Inc. authorizes a write-off of uncollectible receivable, the company makes the entry to reduce the balances in the Allowance for Doubtful Account and Acccounts Receivable. The journal entry:
Debit Allowance for doubtful accounts $4,384
Credit Accounts receivable $4,384
2.
Cash realizable = Accounts receivable (balance)- Allowance for doubtful accounts (balance)
Before the write off,
Cash realizable = $704,700 - $26,850 = $677,850
After the write off:
The balance of Accounts receivable = $704,700 - $4,384 = $700,316
The balance of Allowance for doubtful accounts = $26,850 - $4,384=$22,466
Cash realizable = $700,316 - $22,466 = $677,850
One of the ways to convey competence to your audience while giving a presentation is to:
Multiple Choice:
O preview your slides before showing them to the audience.
O include images and charts in your slides.
O clearly know what you are talking about.
O offer your views honestly and transparently.
O show that you are interested in the needs of your audience.
Answer: The correct answer is "clearly know what you are talking about.".
Explanation: One of the ways of transmitting competence to your audience when making a presentation is to know clearly what you are talking about because when you are really introduced to a topic and know with certainty and clarity what you are talking about, it is noted and you have a greater facility to explain that topic and transmit it to others.
Final answer:
To convey competence in a presentation, clearly know your subject, utilize high-quality visual aids, maintain academic integrity, and consider accessibility for all audience members.
Explanation:
Conveying Competence in Presentations
To convey competence to your audience while giving a presentation, one of the ways is to clearly know what you are talking about. This involves having a deep understanding of the subject matter and being able to communicate it effectively. Prior to your presentation, it is essential to create an outline of the main ideas to establish a clear and logical flow. Additionally, considering accessibility ensures that all audience members, including those with disabilities, can engage with your presentation.
Visual aids such as images and charts should be incorporated into your slides to support your points and make the presentation more engaging. However, it's important to ensure that these visuals are of high quality and large enough to be seen by the audience. If including multimedia components, verify that the technology works flawlessly before the presentation to avoid interruptions.
Lastly, academic integrity must be maintained by providing well-researched and original content within your presentation slides. Take the time to carefully prepare and practice your delivery, making use of natural engagement techniques such as gestures and facial expressions, but without allowing these to distract from the content.
PackMan Corporation has semiannual bonds outstanding with nine years to maturity and the bonds are currently priced at $754.08. If the bonds have a coupon rate of 7.25 percent, what is the after-tax cost of debt for PackMan if its marginal tax rate is 30 percent.
Answer:
8.23%
Explanation:
Since this bond pays semi-annual coupons, it means that the payments occur every 6 months; making it 2 periods per year. Using a Financial calculator; enter the following inputs. If using TI BA II plus, key in the number first, then the function.
Total duration; N = 9*2 = 18
Face Value ; FV = 1,000 (use 1,000 if the value is not given)
Present value or price ; PV = -754.08
Semiannual Coupon Payment; PMT = Semiannual coupon rate *Face value
Semiannual Coupon Payment; PMT = (7.25%/2) *1000 = 36.25
The Yield to maturity;YTM is the annual pretax I/Y which is the Pretax cost of debt in this case
therefore, CPT I/Y = 5.875% (note: semi-annual rate)
Next, convert the semiannual rate to annual rate i.e the YTM;
= 5.875%*2
Pretax cost of debt (YTM) = 11.75%
Aftertax cost of debt = Pretax cost of debt (1-tax)
= 0.1175% (1-0.30)
= 0.08225 or 8.23%
On December 31, Sulfur Corporation has the following data available: Net Income $ 170 comma 000 Interest expense 30 comma 000 Total assets at the beginning of the year 770 comma 000 Total assets at the end of the year 900 comma 000 Total common stockholders' equity at the beginning of the year 410 comma 000 Total common stockholders' equity at the end of the year 290 comma 000
What is return on equity? (Round your final answer to two decimal places, X.XX%.)
Answer:
40%
Explanation:
The computation of the return on equity is shown below:
= (Net income - interest expense) ÷ (weightage average of common stockholders' equity)
where,
Weightage average of common stockholders' equity equals to
= (Total common stockholders' equity at the beginning of the year + Total common stockholders' equity at the end of the year) ÷ 2
= ($410,000 + $290,000) ÷ 2
= $350,000
And, the other items values would remain the same
Now put these values to the above formula
So, the value would be equal to
= ($170,000 - $30,000) ÷ ($350,000)
= 40%
Harriet and Harry Combs (both 37 years old) are married and both want to contribute to a Roth IRA. In 2019, their AGI before any IRA contribution deductions is $50,000. Harriet earned $46,000 and Harry earned $4,000. (Leave no answer blank. Enter zero if applicable.) a. How much can Harriet contribute to her Roth IRA if they file a joint return?
Contribution Roth IRA ?
b. How much can Harriet contribute if she files a separate return?
Contribution Roth IRA ?
c. How much can Harry contribute to his Roth IRA if they file separately?
Contribution Roth IRA ?
Harriet can contribute $6,000 to her Roth IRA if filing jointly, but her contribution may be limited if filing separately. Harry can contribute up to $4,000, his earned income, to his Roth IRA if they file separately and did not live together.
Explanation:The question pertains to the contributions that Harriet and Harry Combs can make to their Roth IRAs under different filing status conditions. Roth IRA contributions are subject to income limits and filing status requirements as determined by the Internal Revenue Service (IRS). For the year 2019, the maximum contribution amount is $6,000 for individuals under 50 years of age.
a. Harriet's Contribution with Joint Return
As Harriet and Harry's combined Adjusted Gross Income (AGI) is $50,000 and they are under the limit for Roth IRA contributions for married couples filing jointly, Harriet can contribute the maximum amount of $6,000 to her Roth IRA.
b. Harriet's Contribution with Separate Return
If Harriet files separately, she may be subject to a lower contribution limit or may not be able to contribute to a Roth IRA at all, as the income threshold for contributing to a Roth IRA is significantly lower for those filing separately. However, specific information for limits in 2019 is necessary to determine the exact contribution amount she is eligible for. When filing separately, if Harriet lives with her spouse at any time during the year and her income is $10,000 or more, she cannot contribute to a Roth IRA.
c. Harry's Contribution with Separate Return
If Harry files separately from Harriet, his contribution limit would also be affected by the same thresholds as Harriet's. Given his income of $4,000, Harry can contribute up to the amount he earned, so he can contribute the full $4,000 to his Roth IRA as long as they did not live together.