Answer:
$746,617.36
Explanation:
Using a financial calculator, input the following to calculate the price of the US Treasury note. I'm using Texas Instruments BA II Plus model;
Face value of the bond ; FV = 1,000,000
Semiannual coupon payment; PMT = Coupon rate * Face value ;
PMT= (3%/2) *1,000,000 = 15,000
Time to maturity of the note ; N = 4*2 = 8
Semiannual interest rate; I/Y = 11% /2 = 5.5%
then compute the Present value of bond or price; CPT PV = $746,617.36
The value of the $1,000,000 semiannual coupon US Treasury note with a coupon rate of 3% is (A) $634,624.76 given a YTM of 11%. This bond is selling at a discount compared to its par value of $1,000,000.
To calculate the value of the treasury note, we need to use the present value formula for each cash flow. This bond pays a semiannual coupon of 3% annual coupon rate, which means $30,000 every six months on a $1,000,000 par value bond. The yield to maturity (YTM) is 11%, which is 5.5% per six months.
Steps to Calculate:
Calculate the semiannual coupon payment:Using these calculations, the bond's value is approximately $634,624.76. Therefore, the T-note described in this problem is selling at a discount.
On July 1, 2010, Ellison Company granted Sam Wine, an employee, an option to buy 400 shares of Ellison Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $1,800. Wine exercised his option on October 1, 2010 and sold his 400 shares on December 1, 2010. Quoted market prices of Ellison Co. stock in 2010 were:
July 1 $30 per share
October 1 $36 per share
December 1 $40 per share
The service period is for three years beginning January 1, 2010. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense on its books in the amount of
a. $1,800.
b. $600.
c. $450.
d. $0.
Answer:
Ellison Company should recognize compensation expense on its books in the amount of $600
Explanation:
Solution
The transaction in the books of Ellison Company during the period of July 1st 2010 to December 31st 2010
On July 1st the share value was $30 *400 = 12000
On October 1st 2010 sold at $ 36 * 400 = 14400
The gain on this transaction was = $2,400
31st July 2010, less compensation expenses =$ 1,800
The fair vale to be recorded as a gain = $ 600
Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $800 $891 $901 $1,000 $1,107
Complete question:
Security Term (years) Yield (%)
Treasury 2 0 5.5%
AAA Corporate 2 0 7.0%
BBB Corporate 20 8.0%
B Corporate 2 0 9.6%
Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to:
A) $891 B) $901 C) $1,000 D) $800
Answer:
If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901
Solution:
Given,
FV = 1000,
N = 40,
I = 4,
PMT = 35
Compute PV ,
PV = [tex]FV \frac{1}{( 1+r)^{n} }[/tex]
PV = 901.04
If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901
The issue price for the bond issued by Wyatt Oil is likely to be around $1000, assuming the market interest rate for BBB bonds rates aligns with the 7% coupon rate.
Explanation:The issue price for the bond is typically the same as the face value if the coupon rate equals the market interest rate for bonds of similar risk. Since the bond issued by Wyatt Oil has a BBB rating, we can comprehensively analyze it. However, without knowing the market interest rate, it's difficult to establish the exact price of the bond. If the given options are the only possibilities, and if we assume that the market interest rate for BBB-rated bonds is approximately the same as the 7% coupon rate, then the price would most likely be closest to $1000 as the face value, and the coupon rate are close.
Learn more about Bond Issue Price here:https://brainly.com/question/32526802
#SPJ3
Tresnan Brothers is expected to pay a $1.60 per share dividend at the end of the year (i.e., D1 = $1.60). The dividend is expected to grow at a constant rate of 3% a year. The required rate of return on the stock, rs, is 5%. What is the stock's current value per share? Round your answer to the nearest cent.
Answer:
The price of the stock today is $80.00
Explanation:
The price of a stock whose dividends are expected to grow at a constant rate is calculated by the constant growth model of the DDM. The price of a stock under DDM is based on the present value of the expected future dividends that the stock will pay. The formula for price under this model is,
P0 = D1 / r - g
Where,
D1 is the dividend expected for the next periodr is the required rate of returng is the growth rate in dividendsP0 = 1.6 / (0.05 - 0.03)
P0 = $80.00
Ballard Company uses the perpetual inventory system. The company purchased $9,700 of merchandise from Andes Company under the terms 3/10, net/30. Ballard paid for the merchandise within 10 days and also paid $420 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $18,400 cash. The amount of gross margin for this merchandise is:
Answer:
$8,571
Explanation:
The computation of amount of gross margin is shown below:-
Total Purchase = Purchase - Purchase discount + Freight paid
= $9,700 - ($9,700 × 3%) + $420
= $9,700 - $291 + $420
= $9,829
Gross Margin = Sales - Total Purchase
= $18,400 - $9,829
= $8,571
Therefore for computing the Gross Margin we simply appied the above formula.
A matrix organization for project management has a distinct advantage because:A) Dual hierarchies mean two bosses.B) A significant amount of time is spent negotiating the sharing of critical resources.C) Workers must reconcile competing project and functional demands.D) Project importance is enhanced by setting authority equal to that of functional departments.
Answer:
D) Project importance is enhanced by setting authority equal to that of functional departments.
Explanation:
A matrix organization is characterized by, multiple command system and overlapping of command, control and behavioral pattern.
Here, temporary project groups are created so as to handle short term projects. Personnel are drawn from functional department and their activities are controlled and coordinated by a project manager.
Once a project is completed, the structure is disbanded and the personnel return to their original departments i.e functional department.
During the project duration, a person is responsible and reports to two bosses, one being the project manager and secondly to the functional boss. Thus, under such a structure exists dual reporting.
Under matrix structure for project management, the project manager is not allowed to use resources exclusively for the project i.e like in project management. Rather, such a manager is required to share resources with the organization.
Mixed Costs and Cost Formula Ben Palman owns an art gallery. He accepts paintings and sculpture on consignment and then receives 20% of the price of each piece as his fee. Space is limited, and there are costs involved, so Ben is careful about accepting artists. When he does accept one, he arranges for an opening show (usually for 3 hours on a weekend night) and sends out invitations to his customer list. At the opening, he serves wine, soft drinks, and appetizers to create a comfortable environment for prospective customers to view the new works and to chat with the artist. On average, each opening costs $600. Ben has given as many as 20 opening shows in a year. The total cost of running the gallery, including rent, furniture and fixtures, utilities, and a part-time assistant, amounts to $120,000 per year.Required:
1. Assume that the cost driver is number of opening shows. Develop the cost formula for the gallery's costs for a year.
2. Using the cost formula developed above, what is the total cost for Ben in a year with 12 opening shows?
$
Using the cost formula developed above, what is the total cost for Ben in a year with 14 opening shows?
$
Answer:
$136,200 is the total costs for 14 opening shows
Explanation:
See attached file
Sammy's is the hot new lunch spot among the hipsters, who flock there at noon for their artisanal peanut butter and jelly sandwiches, which sell for $12.95. The sandwiches are made from two slices of their own artisanal bread, which they bake continuously throughout the day at a rate of seven loaves an hour (each loaf contains twenty slices). The actual cost of a loaf of bread is $1 and the cost to hold a loaf is 80%, since freshness is important in baking as well as to hipsters. The cost to run a new batch of a dough is $3 per loaf. Sammy's sells their sandwiches at a rate of fifty per hour.
What is the optimal batch size to produce?
Answer:
Optimal batch size to produce= 5.56 slices
Explanation:
Selling rate of sandwich = 50 / hour
No of slices used per hour = 50* 2 =100 ( each sandwich use 2 slices)
No of loafs which gets baked in an hour = 7
No of sandwich slices which get produuced in an hour = 7*20 =140
No of sandwich which can be produce = 10/2 =70
So every hour no of slices to be hold = 40
No fo loaf to be hold = 40/20 =2
Cost of holding = 0.8* 1 =0.8
Cost of running a new batch = $3*2 = $6
Selling each sandwich = $12.95
Saving = $12.95 - $6 =$6.95
Optimal batch size = saving * ( Holding cost) = 6.95 *0.8 = 5.56 slices
If three workers are assigned to a task lasting four days, two workers are assigned a task lasting three days, and one worker is assigned to a task lasting three days. The tasks can be completed independently of each other. If you are to schedule with a resource-limit, what is the minimum resource limit for the project
Three workers per day is minimum resource limit.
Explanation:
Every day he needs maximum of 3 workers, so this can be set of the minimum resource limit for the project.
Thus, the minimum resource limit for the project is - Three workers per day
All asset make and change demands are assessed against each LimitRange object in the task. In the event that the asset abuses any of the listed requirements, at that point the asset is dismissed. In the event that the asset doesn't set an express worth, and on the off chance that the imperative backings a default esteem, at that point the default esteem is applied to as far as possible is an edge for an asset the executives and helps control asset use. A procedure for overseeing limits takes into consideration the reallocation of assets to various clients or activities as necessities change.
The minimum resource limit for the project would be:
- 3 workers every day.
In the given scenario, each day requires at least three workers to accomplish the required task. The given descriptions suggest that a total of three workers are assigned, the first two for the initial three days and the latter for the last three days, and each one can finish it on themselves only.This implies that the lowest limit of human resources for the project would be 3 workers irrespective of the challenges or problems that might occur.
Learn more about 'Resource Limit' here:
brainly.com/question/439768
1. Depreciation on the equipment for the month of January is calculated using the straight-line method. The company estimates future uncollectible accounts. The company determines $4,300 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible.
2. The remaining accounts receivable on January 31 are not past due, and 2% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
3. Accrued interest revenue on notes receivable for January.
4. Unpaid salaries at the end of January are $33,900.
5. Accrued income taxes at the end of January are $10,300.
Record the adjusting entries on January 31 for the above transactionsOn January 1, 2018, the general ledger of ACME Fireworks
Answer and explanation:
2)
Date Account title Debit credit
Jan 31
1 Depreciation expense 525
Accumulated
depreciation -equipment 525
2
Bad debt expense 11160
Allowance for uncollectible account 11160
3 interest expense 255
Interest payable (51000*.06*1/12] 255
4 Income tax expense 13100
Income tax payable 13100
5 Deferred revenue 3100
sales revenue 3100
**Depreciation on equipment =[cost-residual value]/useful life
[16000-4300]/2
= 5850
Depreciation for one month = 5850*1/12= 487.5
**Accounts receivable at end = 46400 beginning+136000-125500-4900+134000=186000
Estimated uncollectible account at end =[12000*30%]+[(186000-12000)*.04]
= 3600+ 6960
= 10560
Unadjusted balance in allowance account =4300-4900=-600 debit
Bad debt expense= estimated uncollectible account at end- unadjusted balance in allowance account
= 10560 - (-600)
= 10560+600
= 11160
Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,700. Budgeted cash receipts total $186,500 and budgeted cash disbursements total $189,400. The desired ending cash balance is $30,700. To attain its desired ending cash balance for January, the company should borrow:
Answer:
Cash borrow = $14,900.
Explanation:
Given,
The company budgeted ending cash balance is $30,700.
We know,
Budgeted ending cash balance = Budgeted beginning cash balance + Budgeted cash receipts - Budgeted cash disbursements + Budgeted cash borrow
Given,
Budgeted ending cash balance = $30,700.
Budgeted beginning cash balance = $18,700
Budgeted cash receipts = $186,500
Budgeted cash disbursements = $189,400
Budgeted cash borrow = ?
Putting the values into the formula, we can get
$30,700 = $18,700 + $186,500 - $189,400 + Cash borrow
Or, $30,700 - ($18,700 + $186,500 - $189,400) = Cash borrow
Or, $30,700 - $18,700 - $186,500 + $189,400 = Cash borrow
Or, $220,100 - $205,200 = Cash borrow
Or, $14,900 = Cash borrow
Or, Cash borrow = $14,900.
Therefore, cash borrow is $14,900.
MakerMan Manufacturing creates heavy-duty hand tools. It produces a new collapsible hammer called the SmackN’Stash. One of the first purchasers of the hammer, Rob, is using it at a construction site when the hammer’s head flies off and injures his coworker Cliff. How does the concept of strict liability apply to this situation?
Answer:
Anyone who is injured by a defective product may sue the manufacturer, merchants and all others who handled the product.
Explanation:
Strict liability is a legal doctrine that holds a person responsible for the damages or loss caused by his or her acts or omissions. In torts, strict liability is the doctrine that imposes liability on a party or person without a finding of fault. A finding of fault would be negligence or tortious intent.
Strict liability is an important factor in maintaining safety in high-risk environments by encouraging individuals, employers, and other parties to implement the means to prevent injuries and damages. Construction, manufacturing, and other potentially dangerous work settings are typically subject to strict liability.
Strict liability holds manufacturers like MakerMan Manufacturing responsible for injuries caused by defective products like the SmackN’Stash hammer, regardless of intent or negligence. This legal principle places the onus on manufacturers to ensure the safety of their products, as they are better equipped to mitigate potential risks. In cases of product defects that result in injury, manufacturers can be required to compensate for damages without the injured party proving fault.
Strict Liability in Product Defect Cases
The concept of strict liability applies to situations where a party can be held legally responsible for damages or injuries caused by its products or activities, regardless of whether there was any intent to harm or negligence. In the case of MakerMan Manufacturing and the incident with the SmackN’Stash hammer, under strict liability, the company could be held liable for the coworker's injury simply because their product malfunctioned and caused harm. Strict liability is important in product liability cases because it ensures manufacturers are accountable for the safety of their products. If a product is found to be defective and causes injury, the manufacturer can be required to pay for damages without the injured party having to prove negligence or fault.
Strict liability is based on the principle that some activities or products inherently come with certain risks, and those who engage in manufacturing or selling such products are in the best position to prevent harm. Therefore, they are held responsible when their products fail to be safe for their intended use. Factors such as the manufacturer's quality control processes, design decisions, or how clear the instructions or warnings were could be considered in determining if the product was defective.
Malcolm, a dealer in securities, is a 60 percent owner of the Real Partnership which on July 1, 2015, sold to him Acme Securities which it had held as an investment for three years. The basis of the securities to the Real Partnership was $40,000, and the sales price to Malcolm was $100,000.
On his 2015 federal income tax return, Malcolm should report income in the amount and character of:
a. $36,000 long-term capital gain.
b. $36,000 short-term capital gain.
c. $36,000 ordinary income.
d. $18,000 long-term capital gain.
e. $18,100 ordinary income.
Answer:
c. $36,000 ordinary income.
Explanation:
Data provided
Sales price to Malcolm = $100,000
Basis of the securities to the Real Partnership = $40,000
The computation of should report income in the amount and character of is shown below:-
The gain that arose = Sales price to Malcolm - Basis of the securities to the Real Partnership
= $100,000 - $40,000
= $60,000
But because Malcolm is the Real Partnership's 60 percent shareholder, he will declare income in the amount and character of $60,000 × 60% = $36,000 as ordinary income on his federal income tax return for 2015.
Mequon Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $47,000, and Mequon expects the machinery to have a residual value at the end of the lease term of $30,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $45,000 instead of $30,000.What would be the amount of the annual rental payments Mequon demands of Thiensville, assuming each payment will be made at the end of each year and Mequon wishes to earn a rate of return on the lease of 6%?
The annual lease payment that Mequon Inc. should charge Thiensville Company, given a machine's fair value of $47,000, residual value of $30,000, z desire for a 6% return, and a 4 year lease term, is approximately $6,700.
Explanation:The subject of the question pertains to the calculation of annual rental payments based on a desired rate of return. Mequon Inc. is leasing equipment to Thiensville Company and desires a 6% return on the lease. The lease period is four years. To calculate the annual rental payment, we need to differentiate the actual monetary value of the machinery at the start of the lease versus the end which is the residual value. The present value of the lease payments is equal to the fair value of the asset minus the present value of the residual value at the desired return rate.
Here are the steps:
Determine the present value of the residual value, which is $30,000. At a 6% interest rate over 4 years, it equates to $30,000/(1+0.06)^4 = $23,770.Subtract this value from the initial fair value of the asset: $47,000 - $23,770 = $23,230.This remaining amount is what Thiensville Company will pay in lease payments over the four year period. As such, to determine the annual lease payment, we divide this amount by the present value annuity factor for a 6% rate of return over 4 years: $23,230 / 3.465 = $6,700 approximately.Learn more about Lease Payments here:
https://brainly.com/question/37035930
#SPJ12
In order to compare the efficiencies of media, Derek calculates the CPM for each. For Golf Digest, the circulation is 500,000 and the cost for a full page ad is $40,000. The CPM for Golf Digest is:
Answer:
$80
Explanation:
CPM is the short form for 'cost per a thousand impressions.' Cost per thousand is a marketing expression used to refer to the cost of reaching 1000 readers, viewers, listeners, or webpage visitors. CPM is, therefore, the cost of advertising to an audience of 1000 people.
The Golf Digest has a circulation of 500,000. The cost of advertising is $40,000, which means the cost of reaching 500,000 people $40,000.
To get CPM, we first divide 500,000 by 1,000
=500,000 / 1,000
=500
CPM will be
= $40,000/500
=$80
Stech Co. is issuing $9 million 12% bonds in a private placement on July 1, 2017. Each $1,000 bond pays interest semi-annually on December 31 and June 30 of each year. The bonds mature in ten years. At the time of issuance, the market interest rate for similar types of bonds was 8%. What is the expected selling price of the bonds
Answer:
Expected selling price =$ 1,271.81
Explanation:
The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.
These cash flows include interest payment and redemption value
The price of the bond can be calculated as follows:
Step 1
PV of interest payment
coupon rate - 12%, yield - 8%, years to maturity- 10 years
Semi-annual coupon rate = 12%/2 = 6%
Semi-annual Interest payment =( 6%×$1000)= $60
Semi annual yield = 8%/2 = 4%
PV of interest payment
= A ×(1- (1+r)^(-n))/r
A- interest payment, r- yield - 4%, n- no of periods- 2 × 10 = 20periods
= 60× (1-(1.04)^(-10×2))/0.04)
= 60× 13.59032634
=$815.41
Step 2
PV of redemption value (RV)
PV = RV × (1+r)^(-n)
RV - redemption value- $1000, n- 2×10 r- 4%
= 1,000 × (1+0.04)^(-2×10)
= $456.38
Step 3
Price of bond = PV of interest payment + PV of RV
= $815.41 + $456.38
= $ 1,271.81
Expected selling price =$ 1,271.81
Final answer:
The expected selling price of the $9 million 12% bonds is $940.62.
Explanation:
To calculate the expected selling price of the bonds, we need to calculate the present value of the future cash flows. The bonds pay semi-annual interest at a rate of 12% per year. The market interest rate for similar bonds is 8%. The bonds have a maturity of ten years. Using these figures, we can calculate the present value of the interest payments and the principal repayment at maturity.
To calculate the present value of the bond, we can use the formula:
PV = (C/2) * (1 - (1/(1+r)^n)) / r + (M/(1+r)^n)
Where PV is the present value of the bond, C is the periodic interest payment, r is the market interest rate, and n is the number of periods or years until maturity. M is the maturity value of the bond.
Substituting the values, we get:
PV = (60/2) * (1 - (1/(1+0.08)^(10*2))) / 0.08 + (1000/(1+0.08)^(10*2)) = $940.62
Crew Clothing (CC) sells women’s resort casual clothing to high-end department stores and in its own retail boutiques. CC expects sales for January, February, and March to be $510,000, $570,000, and $590,000, respectively. Twenty percent of CC’s sales are cash, with the remainder collected evenly over two months. During December, CC’s total sales were $820,000. CC is beginning its budget process and has asked for your help in preparing the cash budget.
-Compute CC’s expected cash receipts from customers for each month. (January, Febuary, March)
CC's expected cash receipts for January, February, and March are $430,000, $318,000, and $346,000 respectively, calculated based on a mixture of immediate cash sales and the collection of sales made on credit.
To calculate Crew Clothing's (CC) expected cash receipts from customers for each month, we must consider both the cash sales that occur in the month and the credit sales that are collected over the following two months. According to the information provided, 20% of CC's sales are cash, and the remainder is collected evenly over two months.
January Cash Receipts
For January, we consider December's credit sales and January's sales:
December sales (to be collected in January): $820,000 x 80% = $656,000January cash sales: $510,000 x 20% = $102,000Credit sales from December divided evenly over January and February: $656,000 / 2 = $328,000January total cash receipts: $102,000 (January cash sales) + $328,000 (December credit sales collected in January) = $430,000February Cash Receipts
For February, we include January's credit sales and February's sales:
January credit sales (to be collected in February): $510,000 x 80% = $408,000February cash sales: $570,000 x 20% = $114,000Credit sales from January divided evenly over February and March: $408,000 / 2 = $204,000February total cash receipts: $114,000 (February cash sales) + $204,000 (January credit sales collected in February) = $318,000March Cash Receipts
For March, we calculate using February's credit sales and March's sales:
February credit sales (collected in March): $570,000 x 80% = $456,000March cash sales: $590,000 x 20% = $118,000Credit sales from February divided evenly over March and April: $456,000 / 2 = $228,000March total cash receipts: $118,000 (March cash sales) + $228,000 (February credit sales collected in March) = $346,000
What two explanations of productivity growth does endogenous growth theory offer? A. population growth and increased saving B. population growth and technological innovation C. increased saving and technological innovation D. accumulation of human capital and technological innovation
Answer: D. Accumulation of human capital and technological innovation.
Explanation:
Endogenous growth theory is the belief that to achieve economic growth, there must be an incorporation of technological innovation, human capital, and knowledge or education. These factors are endogenous or internal.
Human capital encompasses all unseen qualities of people such as knowledge and skills that can be harnessed during labor to further economic growth.
The theory also stresses that investment into these internal factors would yield long-run or continuous returns. For example, new advances in technology would lead to new opportunities for economic growth.
disadvantages of using the option of hiring additional personnel during periods of increasing demand and conducting layoffs during lower-demand periods for managing operating costs?
Answer:
The critical analysis of temporary staff hiring & firing, depending on demand is given below :
Explanation:
Hiring & firing personnel, during periods of peak demand & periods of lower demand respectively - can have many undermentioned advantages & disadvantages :
Advantages :
Fulfilment of consumer's demand in high demand periods. Cost saving during low demand periods Highly suitable for seasonal industries, with highly fluctuating demand. Temporary staff is cheaper for companies, it is to be availed with less perks, social security etcDisadvantages :
Incurring high temporary recruitment cost again & againConsistency & Quality of product or service might be compromised, as the labour indulged is fluctuating so muchEmployees might feel lack of job security & hence not associate belongingness with their job, company. It can reduce their incentive to work hard towards organisation objectives Prospective employees & hiring intermediaries might build a bad image of the company as an employer. It might create staff finding difficulties, when needed later.Jeremy, an HR manager, has received an employee requisition for a data analyst job at his firm. Which of the following would most likely help Jeremy determine the qualifications the recruited person needs for the data analyst job? job identifier job description job posting job-knowledge test
Answer: Job description
Explanation:
The thing that will mostly be helpful to Jeremy is a job description. In that way, Jeremy can compare job description with the qualifications of the recruited person and he will be able to see if he is ready to take that job and do everything that data analyst will be obliged to do.
Data analyst job is considering cleaning, transforming and more, of modeling data. A recruited person must be able to discover useful information and inform others about it.
ash Flows from Investing Activities During the year, Murray Company sold equipment with a book value of $125,000 for $175,000 (original purchase cost of $225,000). New equipment was purchased. Murray provided the following comparative balance sheets: Murray Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Long-Term Assets Plant and equipment $1,000,000 $1,025,000 Accumulated depreciation (500,000) (525,000) Land 500,000 725,750 Required: Calculate the investing cash flows for the current year. Use a minus sign to indicate a cash outflow.
To calculate the cash flows from investing activities for Murray Company, we calculate the gain from the sale of equipment and the cash spent on new equipment purchases. The net cash inflow from investing activities is $150,000, resulting from a $175,000 inflow from the sale and a $25,000 outflow for purchases.
Calculating Investing Cash Flows
Calculating the cash flows from investing activities involves determining the cash spent on new investments and the proceeds from the sale of existing assets. The book value and sale price of the equipment provide a gain, influencing net cash flow. Moreover, changes in balance sheet items point to the purchase of new assets.
Sale of Equipment
Murray Company sold equipment with a book value of $125,000 for $175,000, which would result in a gain of $50,000 ($175,000 - $125,000). This gain impacts the net cash provided by investing activities.
Purchase of New Equipment
Comparing the balance sheets for two consecutive years, we see an increase in plant and equipment from $1,000,000 to $1,025,000, indicating a purchase of $25,000 ($1,025,000 - $1,000,000). Additionally, the accumulated depreciation increased by $25,000 ($525,000 - $500,000), which does not impact cash flows.
Investing Cash Flow Summary
The net cash used for investing activities is therefore calculated as the cash outflow for new equipment purchases minus the cash inflow from the sale of equipment. This is $25,000 (purchase) - $175,000 (sale proceeds), resulting in a net cash inflow from investing activities of $150,000.
In its fiscal 2018 annual report, Nike, Inc. reported cash of $4,000 million at the beginning of the year. The statement of cash flows reports the following (in millions): Net cash from operating activities $3,027 Net cash from investing activities (1,067) Net cash from financing activities (940) What was the balance in Nike’s cash account at the end of fiscal 2018? A) $3,027 million B) $1,020 million C) $5,020 million D) $4,350million E) None of the above
Answer:
Option C, $5,020 million is correct
Explanation:
The below is the statement of cash flow for Nike Inc 2018:
Net cash from operating activities $3,027
Net cash from investing activities ($1,067)
Net cash from financing activities ($940)
Net increase in cash and cash equivalent in 2018 $1,020
Beginning Cash and cash equivalent $4,000'
Balance in cash account at the end of fiscal year $5,020
The correct option then is C.$5,020 million.
Option A is wrong because it only takes into consideration net cash from operations,option B is also as it considered only the increase in cash in the year without the opening balance of cash,while option D and E are obviously irrelevant
What are the equilibrium price and the equilibrium quantity? b. Suppose the price is currently $5. Explain what problem would exist in the market and calculate the size of that problem. What would you expect to happen to price? c. Suppose the price is currently $2. Explain what problem would exist in the market and calculate the size of the problem. What would you expect to happen to price?
The question is incomplete. See the attached image for the missing table showing the demand and supply schedule.
Answer/Explanation:
a. Equilibrium price is the price at which Qd = Qs. Hence, equilibrium price = $4, while equilibrium quantity is the quantity demanded at the equilibrium price, i.e. where quantity demanded = quantity supplied. Therefore equilibrium quantity = 8,000
b. At $5, there would be excess quantity supplied, i.e. Qs · Qd = 10,000 · 6,000 = 4,000. Hence, there would be wastage of resources as a result of surplus. This would lead to decrease in price in order to avoid the wastage of resources.
c. At $2, there would be excess quantity demanded, i.e. Qd · Qs = 12,000 · 4,000 = 8,000. This would lead to increase in price as a result of acute shortage in quantity supplied.
Ace Hardware is adding a new product line that will require an investment of $ 1 comma 418 comma 000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $ 330 comma 000 the first year, $ 290 comma 000 the second year, and $ 230 comma 000 each year thereafter for eight years. Compute the payback period. Round to one decimal place.
Answer:
5.47 years
Explanation:
The computation of the payback period is shown below:
In year 0 = $1,418,000
In year 1 = $330,000
In year 2 = $290,000
In year 3 = $230,000
In year 4 = $230,000
In year 5 = $230,000
In year 6 = $230,000
In year 7 = $230,000
In year 8 = $230,000
In year 9 = $230,000
In year 10 = $230,000
If we add the first 5-year cash inflows, that will be $1,310,000 So we subtract the $1,310,000 from the $1,418,000, then the balance will be $108,000 as though we applied the six-year cash inflow to the original investment, and the cumulative sum exceeds. So, we subtract it And the cash inflow next year is $230,000
So, the payback period equal to
= 5 years + $108,000 ÷ $230,000
= 5.47 years
The budgeted production of Capricorn, Inc. is 10,000 units per month. Each unit requires 20 minutes of direct labor to complete. The direct labor rate is $100 per hour. Calculate the budgeted cost of direct labor for the month. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)
Answer:
The budgeted cost of direct labor for the month is $333,333.
Explanation:
This question can be solved using rules of three.
The direct labor rate is $100 per hour.
Each unit requires 20 minutes of direct labor to complete.
An hour has 60 minutes, so in an hour, 60/20 = 3 units can be made.
This means that the cost of 3 units is $100.
10,000 units per month.
How much do 10,000 units cost?
3 units - 100
10,000 units - $x
[tex]3x = 10000*100[/tex]
[tex]x = \frac{10000*100}{3}[/tex]
[tex]x = 333333[/tex]
The budgeted cost of direct labor for the month is $333,333.
Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $14,250 §1231 loss on the sale. The second is land that will generate a $10,400 §1231 gain on the sale. Aruna’s ordinary marginal tax rate is 32 percent. (Input all amounts as positive values.) a. Assuming she sells both assets in December of year 1 (the current year), what effect will the sales have on Aruna’s tax liability?
The sales of the assets will result in a §1231 loss for Aruna. The taxable amount will reduce Aruna's tax liability.
Explanation:To determine the effect of selling the assets on Aruna's tax liability, we need to calculate the net §1231 gain/loss. The net §1231 gain/loss is calculated by subtracting the total §1231 losses from the total §1231 gains. In this case, the net §1231 gain/loss is ($10,400 - $14,250) = -$3,850. Since the net gain/loss is negative, Aruna will have a §1231 loss.
Next, we need to calculate the ordinary gain or loss on the sale of the assets. The ordinary gain/loss is calculated by multiplying the net §1231 gain/loss by the ordinary marginal tax rate. In this case, the ordinary loss is (-$3,850 * 0.32) = -$1,232.
Finally, we subtract the ordinary loss from the net §1231 gain/loss to calculate the taxable amount. The taxable amount is ($-3,850 - $-1,232) = -$2,618. Since the taxable amount is negative, it will reduce Aruna's tax liability.
Learn more about Effect of selling assets on tax liability here:https://brainly.com/question/32669688
#SPJ12
Four years ago, Bling Diamond, Inc., paid a dividend of $1.73 per share. The firm paid a dividend of $2.36 per share yesterday. Dividends will grow over the next five years at the same rate they grew over the last four years. Thereafter, dividends will grow at 5% per year. What will the firm’s cash dividend be in seven years?
Answer:
$2.90 approx
Explanation:
The computation of firm’s cash dividend be in seven years
First we need to find out the
Growth Rate = (Last Dividend ÷ Dividend 4 years ago)^(1 ÷ 4) - 1
= ($2.36 ÷ $1.73)^(1 ÷ 4) - 1
= $1.36^0.35 - 1
= 1.113624092 - 1
= 0.113624092
= 11.36%
Now we calculate for 5 years
Dividend in 5 years = $2.36 × 1.113624092
= $2.628
and Dividend in 7 Years = Dividend in 5 years × (1 + 5%)^2
= $2.628 × 1.05^2
= $2.628 × 1.1025
= $2.90 approx
Final answer:
To find the cash dividend paid by Bling Diamond, Inc. in seven years, we first calculate the historical growth rate, project the dividend after five years using this growth rate, and then apply a perpetual growth rate of 5% for the subsequent two years.
Explanation:
The question involves calculating the future value of dividends paid by Bling Diamond, Inc., given an initial growth rate followed by a perpetual growth rate. To determine the cash dividend Bling Diamond, Inc. will pay in seven years, we'll need to calculate the growth rate of the dividends over the last four years, apply this rate to project dividends for the next five years, and then apply the perpetual growth rate of 5% for the two additional years.
Calculation Steps:
Determine the historic growth rate of the dividends over the past four years using the formula for the growth rate (g): g = (D1/D0)^(1/n) - 1, where D0 is the dividend four years ago, D1 is the dividend today, and n is the number of years.Calculate the dividend in five years by compounding the current dividend with this growth rate for five years.Apply the perpetual growth rate of 5% to find the dividend in years six and seven.Let's go through the calculations:
Historic growth rate: g = ($2.36 / $1.73)^(1/4) - 1Dividend in five years: D1 = $2.36 * (1 + g)^5Dividend in seven years: D7 = D5 * (1 + 0.05)^2After these calculations, you'll have the forecasted dividend that Bling Diamond, Inc. will pay in seven years.
Crane WaterWorks manufactures snorkel gear. During the past month, Washington purchased 4,130 pounds of plastic to use in its dive masks, at a cost of $5,972. The standard price for the plastic is $1.433 per pound. The company actually used 4,060 pounds of the plastic to produce 18,500 dive masks.
a.Calculate crane waterworks direct materials price variance for the month.
Answer:
Direct material price variance= $53.69 unfavorable
Explanation:
Giving the following information:
Actual purchase= 4,130 pounds of plastic
Actual cost= $5,972 (total)
The standard price for the plastic is $1.433 per pound.
The company used 4,060 pounds of the plastic to produce 18,500 dive masks.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 5,972/4,130= $1.446
Direct material price variance= (1.433 - 1.446)*4,130= $53.69 unfavorable
Suppose your company needs $12 million to build a new assembly line. Your target debt−equity ratio is .5. The flotation cost for new equity is 12 percent, but the flotation cost for debt is only 9 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.
a. What is your company’s weighted average flotation cost, assuming all equity is raised externally? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Weighed average flotation cost %
b. What is the true cost of building the new assembly line after taking flotation costs into account? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations and round your answer to the nearest whole dollar, e.g. 1,234,567.)
True cost $
Answer: Weighted average floatation curve is 11.00%
True cost is $14,483,146.
Explanation:
Weighted average floatation cost is equal to weighted average of the floatation costs for debt and equity.
Let the equity be 1%
Given that debt to equity ratio is equal to 0.5%
Debt/Equity is 0.5
Debt/1= 0.5
Debt= 0.50 × 1.00 = 0.50
Assumed value:
For debt= 0.50
For equity = 1.00
Totals= 1.50
For weight (a):
Debt= 0.33
Equity= 0.67
Totals= 1.00
For costs(b)
Debt= 9%
Equity= 12%
Weighted cost (a) × (b)
Debt= 0.33 × 9= 2.97 appr= 3.00
Equity= 0.67 ×12= 8.04 appr= 8.00
Totals = 3. 00 + 8.00= 11.00%
B.
True cost is the defined as the difference between the market price of a product and the comprehensive cost of that product to society. The term is normally used to draw attention to missing or hidden or minute costs that are not found in the market price, even though it could theoretically apply to hidden benefits as well.
True cost is equal to total cost of new assembly line including floatation cost.
True cost × (1 - 11%) = $12,000,000
True cost × (1- 0.11)= $12,000,000
True cost × (0.89) = $12,000,000
True cost = $12,000,000/ 0.89
True cost= $13,483,146.
Final answer:
The weighted average flotation cost would be 12%, which is the flotation cost for new equity, since all funds are being raised through equity. The true cost of building the new assembly line, after accounting for flotation costs, is $13,636,364.
Explanation:
To calculate the weighted average flotation cost when all equity is raised externally, we first need to understand the proportion of funding that would come from equity and from debt based on the target debt-equity ratio of 0.5. This ratio indicates that for every dollar of equity, there is $0.5 of debt. However, because the company has decided to raise all of the $12 million through equity, the weight of the debt is 0 and the weight of the equity is 1. Therefore, the weighted average flotation cost would be the flotation cost for equity, which is 12%, since no debt will be issued.
Next, to calculate the true cost of building the new assembly line after taking into account flotation costs, we can use the following formula: True Cost = Required funds / (1 - Flotation Cost). Since the company is using only equity financing and the flotation cost is 12%, the true cost would be $12 million / (1 - 0.12) = $13.63636364 million. We need to round this to the nearest whole dollar, resulting in a true cost of $13,636,364.
Seidman Company manufactures and sells 30,000 units of product X per month. Each unit of product X sells for $16 and has a contribution margin of $7. If product X is discontinued, $85,000 in fixed monthly overhead costs would be eliminated and there would be no effect on the sales volume of Seidman Company's other products. If product X is discontinued, Seidman Company's monthly income before taxes should:
Answer:
$125,000
Explanation:
The computation of monthly income before taxes is shown below:-
Loss in contribution margin = 30,000 units × $ 7
= ($210,000)
Saving in fixed monthly overhead = $85,000
Income before taxes would get decreased = Loss in contribution margin - Saving in fixed monthly overhead
= ($210,000) - $85,000
= $125,000
If product X is discontinued,. Seidman Company's monthly income before taxes would get decreased by $125,000
ABC manufacturing co has estimated breakeven volume of 50,000 units for its new widget. If $unit variable cost is $23.00 and unit selling price is $25.00, what is the total fixed cost?
Answer:
$100,000
Explanation:
Data provided
Break-even volume = 50,000 units
Variable cost = $23.00
Unit selling price = $25.00
The computation of fixed cost is shown below:-
Contribution margin per unit = Selling price per unit - Variable expense per unit
= ($25 - $23)
= $2
Break even point = Fixed cost ÷ Contribution margin per unit
Fixed cost = Break even point × Contribution margin per unit
= 50,000 × 2
= $100,000