Answer:
$21
Explanation:
As we know that
The inventory should be recorded in the books of accounts by applying the lower value of cost or net realizable value
In the given case
The cost is $23
And, the net realizable value is
= Expected selling price - selling cost
= $36 - $15
= $21
So by comparing the cost and net realizable value, the net realizable value contains the lower value i.e $21 and the same is recorded on the balance sheet for inventory
Joe and Joanne own JoJo's Jet-Fast Oil-Change and Auto Service. When budgeting for next year's benefit expenses, Joe and Joanne estimate that their unemployment and workers' compensation costs will increase because of a high number of claims during the past year. Which of the following terms refers to this type of cost system for insurance like workers' compensation? a. Mandatory b. Experience-rated c. Defined benefit d. Cost-benefit adjusted
An insured party's loss amount is rated according to how much loss other insured parties with comparable coverage have experienced.
The most typical association of experience rating is with workers' compensation insurance. It is employed in the experience modification factor calculation.
So, choice B is the right one.
What is a good experience rating?The opposite of community rating is experience rating. It means that when premiums are calculated, the medical history and claims experience of an individual or group is taken into account. Large group plans can still employ experience ratings.
The simple response is that a good rating is one with an experience modification factor of less than 1.00. Any Emod below 1.00 indicates that a business is performing better than average for other businesses in the same industry and state, as 1.00 is average or neutral.
For more information about workers' compensation refer to the link:
https://brainly.com/question/15307992
#SPJ2
Black Horse Transportation’s sales budget for the first quarter follows:
January $125,000
February 300,000
March 290,000
All sales are on account (credit) with 50% collected in the month of sale, 30% collected in the following month after sale, and 20% collected in the second month after sale. There are no uncollectable accounts.
The March cash receipts are:
A. $102,500
B. $260,000
C. $250,500
D. $172,500
Answer:
$260,000
Explanation:
The computation of the march cash receipts is shown below:
= Month credit sales × month collection percentage + February credit sales × following month collection percentage + January credit sales × month of sale collection percentage
= $290,000 ×50% + $300,000 × 30% + $125,000 × 20%
= $145,000 + $90,000 + $25,000
= $260,000
We simply applied the above formula
Final answer:
The March cash receipts for Black Horse Transportation are calculated by adding 50% of March sales, 30% of February sales, and 20% of January sales, resulting in a total of $260,000. Hence, the correct answer is Option B: $260,000.
Explanation:
The student's question is about calculating the March cash receipts for Black Horse Transportation based on the company's sales budget for the first quarter and their collections schedule. To determine this, we need to calculate the amount of cash collected from sales made in January, February, and March, following the given percentages.
For March cash receipts, we have:
50% of March sales = 0.50 * $290,000 = $145,000
30% of February sales = 0.30 * $300,000 = $90,000
20% of January sales = 0.20 * $125,000 = $25,000
Adding these up, we get a total of $145,000 (March) + $90,000 (February) + $25,000 (January) = $260,000 for March cash receipts. Therefore, the answer to the student's question is Option B: $260,000.
During its first month of operations, Purrfect Pets purchased 6,100 bags of dog food at a cost of $6 a bag and sold all 6,100 bags of dog food on account with payment terms of 2/10, n/30 for $10 each. A total of 2,400 of these bags were sold to customers who paid within the discount period; the other customers paid after the discount period had ended. Sales allowances totaling $200 were granted to customers whose dogs did not like the dog food. Required: Calculate the gross profit for the month. Calculate the gross profit percentage for the month
Answer:
Gross Profit $23720
Gross profit percentage 39.323%
Explanation:
The discounts allowed are subtracted from the sales .Also the sales allowances are deducted in the income statement.
Purrfect Pets
Sales units 6100
Sales Price $10
Sales $ 24000
Less Sales Discounts (2% of 10) *2400 (480)
Sales $ 23520
Add Sales without discount (6100-2400)*10 $37000
Total Sales $ 60520
Less Sales Allowances (200)
Net Sales $ 60320
Less Purchases (6100* 6) $ 36600
Gross Profit $23720
Gross profit percentage= Gross Profit /Sales *100 %
Gross profit percentage= $23720 / $ 60320* 100%= 39.323%
One unit of A is made of three units of B, one unit of C and two units of D. B is composed of two units of E and one unit of D. C is made of one unit of B and two units of E. E is made of one unit of F. Items B, C, E and F have one week lead times; A and D have lead times of two weeks. Assume that lot for lot (L4L) lot sizing is used for Items A,B, and F; lots of size 50, 50, and 200 are used for Items C,D, and E, respectively. Items C, E, and F have on hand (beginning) inventories of 10, 50, and 150, respectively; all other items have zero beginning inventory. We are scheduled to receive 10 units of A in week 2, 50 units of E in week 1, and also 50 units of F in week 1. There are no order scheduled receipts. If 30 units of A are required in week 8, use the low level coded bill of materials to find the necessary planned order releases for all components.Note: Simplify data handling to include the receipt of orders that have actually been placed in previous periods, the following six level scheme can be used. (A number of different techniques are used in practice, but the importance issue is to keep track of what is on hand, what is expected to arrive, what is needed, and what size orders should be placed.) One way to calculate the numbers is as follows:Gross requirementsScheduled receiptsProjected available balanceNet requirementsPlanned order receiptPlanned order release
Answer:
Check the explanation
Explanation:
The following are the given details:
Item Leadtime On hand Inventory Lot sizingcriteria Schedulereceipts
A 2 0 L4L 10 in week 2
B 1 0 LAL 0
C 1 10 50 0
D 2 0 50 0
E 1 50 200 50 in week 1
F 1 150 L4L 50 in week 1
The Complete MRP schedule can be seen in the attached images below:
To determine the necessary planned order releases for all components, follow the steps of the Materials Requirements Planning (MRP) process.
Explanation:To determine the necessary planned order releases for all components, we need to follow the steps of the Materials Requirements Planning (MRP) process. Using the low level coded bill of materials, we start with the gross requirements for item A in week 8, which is 30 units. Then, we calculate the net requirements by subtracting the on-hand inventory and scheduled receipts from the gross requirements. Based on this, we can calculate the planned order release for each component by multiplying the net requirements with the lot size for each component and considering the lead time.
Learn more about Materials Requirements Planning (MRP) here:https://brainly.com/question/33996724
#SPJ3
When machine-hours are used as an overhead cost-allocation base, the MOST likely cause of a favorablevariable overhead spending variance is: A. the production scheduler efficiently scheduled jobs B. excessive machine breakdowns C. strengthened demand for the product D. a decline in the cost of energy
Answer:
D. a decline in the cost of energy
Explanation:
As per definition, A variable overhead spending variance is favorable that means the the actual rate per hour is less in this case as machine hours is the allocation base so any decline in cost of energy.
The S&P 500 Index is one of the most commonly used benchmark indices for the US equity markets. Consisting of 500 companies, it is a market value weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies.
Description Terms
This type of risk relates to changes in the interest rate Pick one : systematic risk
This can be used to reduce the stand-alone risk of an investment by combining it with other investments in a portfolio Diversification or correlation coefficient
This type of risk is inherent in a firm's operations systematic risk or unsystematic risk
A listing of each possible outcome and the probability of each outcome occurring Probability distribution or risk premium
You invest 100,000 in only one stock. What kind of risk will you primarily be exposed to
A. stand-alone risk
B. Portfolio risk
Generally, investors would prefer to invest in assets that have:
A. A low level of risk and high expected returns
B. A high level of risk and low expected returns
Answer: Please refer to Explanation
Explanation:
Your question is quite confusing as it has elements of other questions. However I shall try my best.
This type of risk relates to changes in the interest rate. SYSTEMATIC RISK.
This type of risk is inherent in a firm’s operations. UNSYSTEMATIC RISK.
A listing of each possible outcome and the probability of each outcome occurring. PROBABILITY DISTRIBUTION
This can be used to reduce the stand-alone risk of an investment by combining it with other investments in a portfolio. DIVERSIFICATION
You invest 100,000 in only one stock. What kind of risk will you primarily be exposed to?
- STANDALONE RISK
This is involving yourself with only one type of financial instruments. It can lead to massive losses if the value of the instrument goes down.
Generally, investors would prefer to invest in assets that have:
- A. A low level of risk and high expected returns.
Human beings are rationale beings that will always seek to maximise their utility. They do this under certain risk appetites but generally, people prefer that they get high returns for low risk. Essentially, people want money but they don't want to risk losing it to get it.
If you need any clarification do comment.
The fixed overhead volume variance is a measure of a. the cost of unused activity capacity acquired. b. the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate. c. both the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate and the cost of unused activity capacity. d. both the cost of overspending on fixed overhead items and the effect of the actual output differing from the output used to calculate predetermined fixed overhead rate. e. the cost of overspending on fixed overhead items.
Answer:
d. both the cost of overspending on fixed overhead items and the effect of the actual output differing from the output used to calculate predetermined fixed overhead rate.
Explanation:
Fixed overhead volume variance is a measure of difference between actual fixed overheads applied based to production volume and the budgeted fixed overhead based on production volume. The variance can be favorable or unfavorable. The unfavorable variance indicates that the fixed overheads actually applied based on production volume are less than budgeted fixed overhead cost based on production volume.
Final answer:
The fixed overhead volume variance is primarily a measure of the effect of actual output differing from the output anticipated during the calculation of the predetermined fixed overhead rate. It helps in understanding the utilization of capacity and the potential inefficiencies in spreading fixed costs over the actual production volume.
Explanation:
The fixed overhead volume variance is a measure of b. the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate. This variance helps businesses assess whether they are utilizing their capacity efficiently. It represents the difference between the budgeted and the actual fixed costs incurred due to a difference in actual production volume compared to the expected production volume. When production volumes are lower than expected, the average fixed cost per unit increases, because the total fixed costs are spread over fewer units, which is often referred to as spreading the overhead.
Fixed costs, such as rent or management salaries, do not change with the level of production in the short term. However, in the long term, all costs become variable. The fixed overhead volume variance is crucial in understanding how these fixed costs affect the overall cost structure of a company and its profitability. It is important to consider opportunity costs as well, which represents the cost of a foregone alternative that might have been chosen.
Sushi Corp. purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $54,000. The equipment has an estimated residual value of $2,700. The equipment is expected to process 271,000 payments over its three-useful Life. Per yea expected payment transactions are 65,040, year 1, 149,050, year 2,56,910, year 3.Required:Complete a depreciation schedule for each of the alternative methods.1. Straight line2. Units-of-production3. Double declining balance
Answer and Explanation:
The preparation of Straight line method , Units of production method and Double declining method is shown below:-
1. Straight line method
Income statement Balance Sheet
Year Depreciation Cost Accumulated Book value
expense depreciation
At acquisition $54,000
1 $17,100 $54,000 $17,100 $36,900
2 $17,100 $54,000 $34,200 $19,800
3 $17,100 $54,000 $51,300 $2,700
Working Note
Depreciation expenses
For 1 Year ($54,000 - $2,700) ÷ 3
= $17,100
For 2 year ($54,000 - $2,700) ÷ 3
= $17,100
For 3 year ($54,000 - $2,700) ÷ 3
= $17,100
2. Units of production method
Income statement Balance Sheet
Year Depreciation Cost Accumulated Book value
expense depreciation
At acquisition $54,000
1 $12,312 $54,000 $12,312 $41,688
2 $28,215 $54,000 $40,527 $13,473
3 $10,773 $54,000 $51,300 $2,700
Working Note
For 1 year ($54,000 - $2,700) ÷ 271,000 × $65,040 = $12,312
For 2 year ($54,000 - $2,700) ÷ 271,000 × $149,050 = $28,215
For 3 year ($54,000 - $2,700) ÷ 271,000 × $56,910 = $10,773
3. Double declining method
Income statement Balance Sheet
Year Depreciation Cost Accumulated Book value
expense depreciation
At acquisition $54,000
1 $36,000 $54,000 $36,000 $18,000
2 $12,000 $54,000 $48,000 $6,000
3 $3,300 $54,000 $51,300 $2,700
Working Note
For 1 year = $54,000 ÷ 3 × 2 = $36,000
For 2 year = $18,000 ÷ 3 × 2 = $12,000
For 3 year = 6,000 - 2,700 = $3,300
Therefore the preparation of depreciation schedule for each of the alternative methods is prepared above.
The Completion of a Depreciation Schedule in the books of Sushi Corp. for the three Depreciation Methods are as follows:
Straight-line Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
Year 1 $54,000 $17,100 $17,100 $36,900
Year 2 54,000 17,100 34,200 19,800
Year 3 54,000 17,100 51,300 2,700
Units-of-production method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
Year 1 $54,000 $12,312 $12,312 $41,688
Year 2 54,000 28,215 40,527 13,473
Year 3 54,000 10,773 51,300 2,700
Double-declining-balance Method:
Year Cost Depreciation Accumulated Net Book
Expense Depreciation Balance
Year 1 $54,000 $36,000 $36,000 $18,000
Year 2 54,000 12,000 48,000 6,000
Year 3 54,000 3,300 51,300 2,700
Data and Calculations:
Cost of equipment = $54,000
Estimated residual value = $2,700
Estimated useful life = 3 years
Depreciable amount = $51,300 ($54,000 - $2,700)
Units-of-production method:
Depreciation rate per transaction = $0.1893 ($51,300/271,000)
Number of payments = 271,000 Depreciation Expense
Year 1 transactions = 65,040 = $12,312 ($0.1893 x 65,040)
Year 2 transactions = 149,050 = $28,215 ($0.1893 x 149,050)
Year 3 transactions = 56,910 = $10,773 ($0.1893 x 56,910)
Straight-line Method:
Annual depreciation expense = $17,100 ($51,300/3)
Double-declining-balance Method:
Depreciation rate = 66.67% (100/3 x 2)
First year depreciation expense = $36,000 ($54,000 x 66.67%)
Second year depreciation expense = $12,000 ($18,000 x 66.67%)
Third year depreciation expense = $3,300 ($6,000 - $2,700)
Learn more: https://brainly.com/question/24339347
g The La Salle Bus Company has decided to purchase a new bus for $95,000 with a trade-in of their old bus. The old bus has a BV of $10,000 at the time of the trade-in. The new bus will be kept for 10 years before being sold. Its estimated SV at that time is expected to be $15,000. a. Determine which asset class of the bus. b. Determine annual Straight-Line Depreciation charge'
Answer:
The new bus is rolling stock asset
depreciation is $8,000
Explanation:
Rolling stock asset in the U.S is a conveyance vehicle such a buses,vans ,locomotives,ferryboats and so on.
annual depreciation =(cost-salvage value)/useful life
cost of the new bus is $95,000
salvage value is $15,000
useful life is 10 years
yearly depreciation charge =($95,000-$15,000)/10 years
=$8,000
Note that the $10,000 trade-in value is relevant when computing the cash payable to the car dealer,it is not deducted here since it forms part of asset cost.
Dermody Snow Removal's cost formula for its vehicle operating cost is $2,930 per month plus $323 per snow-day. For the month of December, the company planned for activity of 17 snow-days, but the actual level of activity was 16 snow-days. The actual vehicle operating cost for the month was $8,700. The spending variance for vehicle operating cost in December would be closest to: rev: 11_08_2017_QC_CS-108685, 11_29_2017_QC_CS-110702 Multiple Choice $279 U $279 F $602 U
Answer:
602 U
Explanation:
Dermody Snow Removal's
Vehicle operating cost is $2,930 per month plus $323 per snow-day
Actual level of activity was 16 snow-days
Spending variance for vehicle operating cost = Flexible budget-actual
Hence;
= (323*16+2930)-8,700
=(5,168+2,930)-8,700
=8,098-8,700
=602 U
Therefore the spending variance for vehicle operating cost in December would be closest to 602 U
The government wants to help the mohair sweater industry by giving producers a specific subsidy of $1.20 per mohair sweater. Suppose that the market demand isgiven by: Upper Q Superscript d Baseline equals 1200 minus 22 p and the market supply is: Upper Q Superscript s Baseline equals negative 220 plus 40 p. How much will the subsidy cost taxpayers?
Answer:
$855.79
Explanation:
[tex]Q^{d}[/tex] = 1,200 - 22p .................................... (1)
[tex]Q^{s}[/tex] = - 220 + 40p .................................... (2)
When a subsidy of $1.20 is given, it will increase the price of the producers by $1.20 and Qs becomes:
[tex]Q^{s}[/tex] = -220 + 40(p + 1.2) = - 220 + 40p + 48
[tex]Q^{s}[/tex] = -172 + 40p .............................................. (3)
At equilibrium, [tex]Q^{d}[/tex] = [tex]Q^{s}[/tex]. Equating equations (1) and (3) and solve for equilibrium price p, we have:
1,200 - 22p = -172 + 40p
-22p - 40p = -172 - 1,200
-62p = -1,372
p = -1372/-62
p = 22.129
Substitute p into equation (3) to obtain equilibrium quantity, Q, we have:
[tex]Q^{s}[/tex] = -172 + 40(22.129) = -172 + 885.16 = 713.6
Cost of subsidy to taxpayers = [tex]Q^{s}[/tex] * Subsidy per unit = 713.6 * 1.2 = $855.79
Becker Office Service purchased a new computer system in Year 1 for $35,000. It is expected to have a five-year useful life and a $3,800 salvage value. The company expects to use the system more extensively in the early years of its life. Requireda. Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation.
Answer:
Under straight line depreciation, the depreciation expense per year for every year will be $6240
Explanation:
The straight line depreciation charges a constant depreciation expense per year through out the useful life of the asset regardless of how it is used over the useful life. The formula for straight line depreciation expense per year is,
Depreciation expense per year = (Cost - Salvage Value) / estimated useful life
Depreciation expense per year = (35000 - 3800) / 5 = $6240
Jake and Christina are married and file a joint return for 2019 with taxable income of $100,000 and tax preferences and adjustments of $30,000 for AMT purposes. Their regular tax liability is $13,717. What is the amount of their total tax liability? Group of answer choices $4,758 $13,717 $15,158 $18,475
Answer:
$13,717
Explanation:
The amount of AMTI is ($100,000+$30,000) $130,000.
AMT base
= $130,000 - $83,400
=$46,600.
TMT is $46,600 × .26 = $12,116.
Their tax liability which is $13,717 is greater of the TMT or regular tax which is $12,116.
Hence , the amount of their total tax liability in this case is $13,717
Suppose the U.S. yield curve is flat at 3% and the euro yield curve is flat at 4%. The current exchange rate is $1.35 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange of 2.1 million euros for a given number of dollars in each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 4 decimal places.)
Answer:
2.7814 millions per year
Explanation:
The rate that is determined by the contracting parties of a swap is known as swap rate.
The swap rate is decided by the receiver and paid by the payer in order to compensate the uncertainty bear by the receiver related to the fluctuations in floating rate.
Amount Delivered = Forward Exchange Rate * Exchange Amount
Year 1
= $1.35 * ( 1.03 / 1.04 ) * Euro 2.1 million
= $2.8077 millions
Year 2
= $1.35 * ( 1.03 / 1.04 )∧2 * Euro 2.1 million
= $2.7807 millions
Year 3
= $1.35 * ( 1.03 / 1.04 )∧3 * Euro 2.1 million
= $2.7540 millions
Now Swap per year =
[F/(1+0.3) + F/(1+0.03)∧2 + F/(1+0.03)∧3 ]= [ $2.8077 ( 1+0.03)∧2 + $2.7807 (1+0.03) + $2.7540 ] / ( 1+0.03)∧3
= F [ 2.8286 ] = 7.8674
F = 2.7814 millions per year
g A Disney Corporation Bond with a $1,000 par value has a 10% annual coupon that pays $50 every 6 months. There are eight years (16, 6 month periods) before maturity and Disney will pay $50 each of those 16 periods plus it will pay back the $1,000 principal at maturity. The prevailing market rate for this bond has gone down from 10% to 8% annually (4% every six months). What is the value of the bond given this lower rate environment
Answer:
The value of the bond is $1,116.52.
Explanation:
The value of the bond is the sum of present value of cash flow earned from the bond, discounting at the market rate of 4% every six month, which are:
+ 16 semiannual dividend payments, $50 each whose present value is: (50/4%) / [ 1 - 1.04^(-16) ] = $582.61;
+ Principal repayment of $1,000 at the end of 8 years ( 16 periods - as one period is 6 months) whose present value is: 1,000/ 1.04^16 = $533.91.
=> Value of the bond = 582.61 + 533.91 = $1,116.52.
So, the answer is $1,116.52.
The value of the Disney Corporation bond is $1,135.69.
To find the value of the bond, we calculate the present value of all future cash flows, which includes 16 semi-annual coupon payments of $50 each and the $1,000 principal at maturity. The formula for the present value of an annuity (coupon payments) and the present value of a lump sum (principal) is used.
Present Value of Coupons:The bond's value in the current lower rate environment is $1,135.69, reflecting the higher valuation due to the market interest rate being lower than the coupon rate.
Cost of equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4.0% and the expected market return is 12.0%, what is the cost of equity for Stan if the beta of the stock is a. 0.75? b. 0.90? c. 1.05? d. 1.20? a. What is the cost of equity for Stan if the beta of the stock is 0.75? nothing% (Round to two decimal places.)
Answer:
a.
The cost of equity is 10% if beta is 0.75
b.
The cost of equity is 11.20% if beta is 0.9
c.
The cost of equity is 12.40% if beta is 1.05
d.
The cost of equity is 13.60% if beta is 1.2
Explanation:
The SML approach is used to calculate the required rate or return (r) which is the minimum return that the investors require to invest in a company's stock. This is also referred to as the cost of equity. The formula for required rate of return under SML is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free raterM is the return on Marketa.
r = 0.04 + 0.75 * (0.12 - 0.04)
r = 0.10 or 10%
b.
r = 0.04 + 0.9 * (0.12 - 0.04)
r = 0.112 or 11.20%
c.
r = 0.04 + 1.05 * (0.12 - 0.04)
r = 0.124 or 12.40%
d.
r = 0.04 + 1.2 * (0.12 - 0.04)
r = 0.136 or 13.60%
.. Attitude formation is based on cognitive and affective factors * true or false
Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Super Saver used the equipment for 1,200 hours the first year. Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.) rev: 04_08_2019_QC_CS-164618 1. Straight-line.
Answer:
Annual depreciation= $3,700
Explanation:
Giving the following information:
Super Saver Groceries purchased store equipment for $40,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $3,000.
To calculate the depreciation expense under the straight-line method, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (40,000 - 3,000)/10= $3,700
Pension data for Fahy Transportation Inc. include the following: (in millions Discount rate, 7% Expected return on plan assets, 10% Actual return on plan assets, 11% Projected benefit obligation, January 1 Plan assets (fair value, January 1 Plan assets (fair value), December 31 Benefit payments to retirees, December 31 $630 600 650 69 Required Assuming cash contributions were made at the end of the year, what was the amount of those contributions? Cash contributions million
Answer:
$53
Explanation:
The merged data in the question have to be separated first before answering the question as follows:
Projected benefit obligation, January 1 = $630
Plan assets (fair value), January 1 = $600
Plan assets (fair value) December 31 = $650
Benefit payments to retirees, December 31 = $69
Actual return = Plan assets (fair value), January 1 × 11% = $600 × 11% = $66
Cash contribution = Plan assets (fair value) December 31 - Plan assets (fair value), January 1 - Actual Return + Benefit payments to retirees, December 31
Therefore, we have:
Cash contribution = $650 - $600 - $66 + $69 = $53
Therefor, the amount of those contributions is $53.
A thirty-year annuity has end-of-month payments. The first year the payments are each $120. In subsequent years each payment increases by $5 over what it was the previous year. Find the present value of the annuity if i D 3%:
Answer:
NPV of the annuity = $209,782.38
Explanation:
Note: See the attached file to see how the Present Values (PV) and the Net Present Value (NPV) are calculated.
The following explanation should be read with the attached.
i = Monthly interest rate = 3%/12 = 0.25%, or 0.0025
DF = Discounting factor = (1 + i)^n = (1 + 0.0025, where n denotes relevant month
Number of months = 30 years * 12 months = 360 months
CF = Cash Flow = P + 5, where P denotes previous payment
The present value of the annuity has to be calculated year by year, taking into account the change in payment amount each year, and then all these present values have to be added up. The present value of each year's payments is calculated using the formula for the present value of an annuity.
Explanation:The problem has to do with the concept of the present value of an annuity in the field of finance. The present value of an annuity refers to the current worth of a stream of payments, given a specified rate of return or discount rate.
For a 30-year annuity with end-of-month payments that start at $120 and increase by $5 each subsequent year, we will have to calculate the present value of each year's payments and then sum them up. The present value of each year's payments will be calculated using the formula for the present value of an annuity:
PV = P * [1 - (1 + r)^-n]/r
where PV is the present value, P is the payment amount, r is the interest or discount rate (3% in this case), and n is the number of periods.
The interest rate will be divided by 12 to adjust for the monthly payments, and the number of periods will range from 12 to 360 (30 years x 12 payments per year). Given the complexity of this calculation, it may be most easily performed using a financial calculator or spreadsheet software.
Learn more about Present Value of Annuity here:https://brainly.com/question/17112302
#SPJ3
The economies of Technetium and Polonium are identical except that Technetium announces that it will start rewarding entrepreneurs with the right to earn and keep profits. Which economy is likely to experience greater long-term economic growth?
Answer:
The economies of Technetium and Polonium are identical except that Technetium announces that it will start rewarding entrepreneurs with the right to earn and keep profits. Which economy is likely to experience greater long-term economic growth?
The Technetium economy is likely to experience greater long-term economic growth than the Polonium economy.
Explanation:
The Technetium economy is likely to experience greater long-term economic growth than the Polonium economy, the reason being that since the Technetium economy will compensate entrepreneurs with the right to earn and keep profits, it will encourage entrepreneurs to bring their ideas to market. This will improve the economy by creating more jobs and money sources, thus, Technetium will experience long term economic growth.
From 1970 to 1998 the U.S. dollar Group of answer choices gained value compared to the Italian lira because inflation was higher in Italy. gained value compared to the Italian lira because inflation was lower in Italy. lost value compared to the Italian lira because inflation was higher in Italy. lost value compared to the Italian lira because inflation was lower in Italy.
Answer:
A. Gained value compared to the Italian lira because inflation was higher in Italy.
Explanation:
Today, Stock A is worth $20 and has 1,000 shares outstanding. Stock B costs $30 and has 500 shares outstanding. Stock C is priced at $50 per share and has 1,200 shares outstanding. If, tomorrow, Stock A is priced at $22, Stock B at $35, and Stock C is worth $48, what would the value-weighted index amount equal? (The index has a base period value of 100.)
Answer:
$102.21
Explanation:
The computation of value-weighted index is shown below:-
Today value
Stock A = $20 × 1000
= $20,000
Stock B = $30 × 500
= $15,000
Stock C = $50 × 1200
= $60,000
Total market value = $60,000 + $15,000 + $20,000
= $95,000
Tomorrow
Stock A = $22 × 1,000
= $22,000
Stock B = $35 × 500
= $17,500
Stock C = $48 × 1,200
= $57,600
Total market value = $57600 + $17,500 + $22,000
= $97,100
Value weighted return = Tomorrow Total market value ÷ Today Total market value × 100
= $97100 ÷ $95000 × 100
= $102.21
Final answer:
Understanding the calculation of a value-weighted index for a group of stocks with different prices and shares.
Explanation:
The value-weighted index calculates the performance of a group of stocks by considering the market capitalization of each stock.
To find the value-weighted index amount, we first calculate the market value of each stock before and after the price change:
Stock A: (1000 shares x $20) + (1000 shares x $22) = $40,000 + $44,000 = $84,000Stock B: (500 shares x $30) + (500 shares x $35) = $15,000 + $17,500 = $32,500Stock C: (1200 shares x $50) + (1200 shares x $48) = $60,000 + $57,600 = $117,600Then, calculate the index for each day using the base period value of 100:
Base period value: 100Day 1 value: $84,000 + $32,500 + $117,600 = $234,100Day 2 value: $84,000 + $32,500 + $117,600 = $234,100Therefore, the value-weighted index amount for both days would be 234.1.
Suppose we calculate the percent change in real GDP from year 1 to year 2 using the prices from year 1, and we get 15 percent. When we calculate the percent change in real GDP from year 1 to year 2 using the prices from year 2, we obtain 12 percent. According to the chain weighting method, the growth of real GDP from year 1 to year 2 is roughly: A. 13.5 percent B. 12.75 percent C. 12.5 percent D. 1.5 percent
Answer:
a) 13.5%
Explanation:
A chain weighted inflation method is a method that measures or compares both the change in price and pattern of spending . In this case the chain weighted method will be used to measure price change and real GDP in both year 1 and year 2.
Given:
Number of years, n= 2
Using prices from year 1, % change in real GDP = 15%.
Using prices from year 2, % change in real GDP = 12%.
According to the chain weighted method, the growth of real GDP from year 1 to year 2 will be:
(15%/2) + (12%/2)
= 7.5% + 6%
= 13.5%
The growth of real GDP from year1 to year2 is 13.5%
Oriole Company had these transactions during the current period. June 12 Issued 80,500 shares of $1 par value common stock for cash of $301,875. July 11 Issued 4,050 shares of $100 par value preferred stock for cash at $106 per share. Nov. 28 Purchased 1,350 shares of treasury stock for $8,550.
Answer:
June 12
Dr Cash $301,875
Cr Common Stock $80,500
Cr Paid-in Capital in Excess of Stated Value—Common Stock $221,375
July 11
Dr Cash $429,300
Cr Preferred Stock $405,000
Cr Paid-in Capital in Excess of Par Value—Preferred Stock $24,300
Nov. 28
Dr Treasury Stock 8,550
Cash 8,550
Explanation:
Oriole Company
Journal entries
June 12
Dr Cash $301,875
Cr Common Stock (80,500×$1) $80,500
Cr Paid-in Capital in Excess of Stated Value—Common Stock $221,375
July 11
Dr Cash (4,050×$106) $429,300
Cr Preferred Stock (4,050×100) $405,000
Cr Paid-in Capital in Excess of Par Value—Preferred Stock [4,050×($106-$100)$6] $24,300
Nov. 28
Dr Treasury Stock 8,550
Cr Cash 8,550
Monczka-Trent Shipping is the logistics vendor for Handfield Manufacturing Co. in Ohio. Handfield has daily shipments of a power-steering pump from its Ohio plant to an auto assembly line in Alabama. The value of the standard shipment is $271 comma 590. Monczka-Trent has two options: (1) its standard 2-day shipment or (2) a subcontractor who will team drive overnight with an effective delivery of 1 day. The extra driver costs $180. Hadfield's holding cost is 35% annually for this kind of inventory. a) ▼ is more economical, with a daily cost of $ nothing. (Enter your response as a whole number.)
Answer:
$260 per day
Explanation:
Handfield Manufacturing Co.
Holding cost = 35% annually = 0.35
Standard Cost = $271,590
Number of Days in a Year = 365 days
Hence;
Daily Holding Cost = (Standard Cost x Holding Cost) / Number of Days in a Year
Daily Holding Cost = ($271,590 x 0.35) / 365
Daily Holding Cost = $260 per day
Extra Driver Cost = $180
Hence the benefit of subcontractor who will team with an effective delivery of 1 day can be calculated as follows;
Daily Holding Cost - Extra Driver Cost
= $260 - $180
= $80
Therefore, the use of subcontracting the team who will drive overnight is more economical, with a daily cost of $260 per day.
The question is about evaluating the cost and efficiency of different shipping options for a company in the field of business.
Explanation:The subject of this question is business, specifically logistics and supply chain management. The question involves evaluating the cost and efficiency of different shipping options for a company. The company has two options: a standard 2-day shipment or a subcontractor who will team drive overnight with a delivery time of 1 day.
To determine which option is more economical, we need to calculate the daily cost of each option. The holding cost for inventory is given as 35% annually, and the value of the standard shipment is $271,590. By calculating the daily holding cost and comparing it to the cost of the extra driver for the subcontractor option, we can determine which option is more economical.
The answer to part (a) of the question is that the subcontractor option is more economical with a daily cost of $180.
Learn more about Logistics and supply chain management here:https://brainly.com/question/33119464
#SPJ11
The net cash flows of Advantage Leasing for the next 3 years are $42,000, $49,000 and $64,000 respectively, after which the growth rate will be a constant 2% with a WACC of 8%. What is the present value of the terminal value
Answer:
The present value of terminal value is $ 863,689.48
Explanation:
Terminal value=Cash flows at third year*(1+g)/WACC-g
cash flows at the third year is $64,000
g is the growth rate of net cash flows which is 2% in perpetuity
WACC is 8%
Terminal value=$64,000*(1+2%)/(8%-2%)
=$64000*1.02/0.06
=$ 1,088,000.00
The present value of terminal=terminal value*discount factor in year 3
discount factor in year=1/(1+8%)^3=0.793832241
Present value of terminal cash flow=1,088,000.00 *0.79383224
=$ 863,689.48
Answer:
$863,689.48
Explanation:
Terminal value means the value of an asset at future date.. The terminal value is the last value after the third year.. The formula goes thus
Terminal Value=( Last cash flow X 1 + Growth rate) / (Required return - growth return)
TV= [640000 X (1+2%) ] / [8% - 2 %]
TV= 64000 X 1.02 / 0.08-0.02
TV=65280 / 0.06
TV=$1,088,000
Terminal value is $1,088,000
To get the present value of Terminal value
Pv= Terminal value (1+i)^n
Pv= 1,088,000(1+0.08)^3
Pv= 1,088,000(1.08)^3
Pv=1,088,000(1.259712)
Pv=863,689.48
Therefore, the present value of the terminal value is $863,689.48
Prestige Pegasus is a multinational firm that specializes in the manufacturing of hardware for high-end technical products and sells its products mostly through business-to-business interactions. Following a good year with soaring profit-margins, Prestige Pegasus is planning to conduct an internal assessment throughout the organization. In a meeting following the decision to conduct the internal assessment, Douglas McCarthy (the Chief Operations Officer) and Tom Castleback (the Chief Marketing Officer) are the prime contributors on the methods that the organization should use to perform these assessments.Douglas: "We should encourage 360-degree feedback, mostly concentrating on subordinates, as they would be the right people to judge their superiors."Tom: "We should definitely use 360-degree feedback, mostly from external customers, as they are the ones who matter in the end."Which of the following, if true, would most strengthen Tom's argument?
a.The salespeople of the company travel extensively and are expected to work independently without supervision.
b.The salespeople of the company do not have any flexibility in the selling price of the product.
c.The company targets a niche market segment with a limited customer base.
d.Previous surveys have revealed that customers are more satisfied with the company's services than the actual products
Answer:
The correct Choice here is A)
Explanation:
360-degree feedback is a performance evaluation/management technique that provides each worker the opportunity to receive feedback about their performance from senior colleagues and four to eight peers, reporting staff members, co-workers, and customers.
If it is true that the salespeople of the company travel extensively and are expected to work independently without supervision, then it is important to see from the customers eyes what happens when the Sales People go out.
This information will provide information with respect to what the Sales people are doing right and what they aren't getting done.
Armed with these information, Prestige Pergasus can in the next financial year work it's way into even more profits IF following from the feedback they:
reinforce, expand on and reward what is working;quickly eliminate any loop holes discovered from the feedback by communicating insights to all staff and readjusting performance metrics / system to reward or punish deviation new policies which may have been thought through and stablished in 1 above.Cheers!
Final answer:
Tom Castleback's argument about using 360-degree feedback with a focus on external customers is strengthened by the fact that previous surveys showed customers are more satisfied with the company's services than the products.
Explanation:
In the scenario where Prestige Pegasus is planning an internal assessment, Tom Castleback argues for a 360-degree feedback approach with a focus on perspectives from external customers. To strengthen Tom's argument that feedback from customers is vital, option (d), which states previous surveys have revealed that customers are more satisfied with the company's services than the actual products would most support his view. This choice suggests that customer feedback is already recognized as valuable and influential in understanding the firm’s performance, and therefore, continuing to value external feedback aligns with seeking concrete areas for improvement and maintaining competitive advantage.
Burger Prince buys top-grade ground beef for $1.00 per pound. A large sign over the entrance guarantees that the meat is fresh daily. Any leftover meat is sold to the local high school cafeteria for 80 cents per pound. Four hamburgers can be prepared from each pound of meat. Burgers sell for 60 cents each. Labor, overhead, meat, buns, and condiments cost 50 cents per burger. Demand is normally distributed with a mean of 301 pounds per day and a standard deviation of 37 pounds per day. What daily order quantity is optimal? (Hint: Shortage cost must be in dollars per pound.)
Answer:
The optimal order quantity is 316 pounds
Explanation:
In order to calculate What daily order quantity is optimal, we have to calculate first The cost of underestimating the demand Cu and cost of overestimating demand Co
Cu = ($0.60 - $0.50)*4 = $0.40
Co = $1 - $0.80 = $0.20
Next we have to calculate the Service Level = Cu / (Cu + Co)
= 0.40 / (0.40 + 0.20)
= 0.40/0.60
= 0.6667
So, Z Value at above service level = 0.430727
Therefore, in order to calculate the Optimal Order quantity, we would have to use the following formula
Optimal Order quantity= Mean + Z Value × Std Deviation
= 301 + 37 * 0.430727
= 301 + 15.36899
= 316 pounds
A boat, costing $108,000 and uninsured, was wrecked the very first day it was used. It can either be disposed of for $11,000 cash and be replaced with a similar boat costing $110,000, or rebuilt for $98,000 and be brand new as far as operating characteristics and looks are concerned. A relevant cost analysis of the decision to replace the boat shows:
A cost equivalence between the two decision options.
An $11,000 net advantage associated with the decision to fix the old boat.
A $1,000 cost advantage associated with the decision to fix the old boat.
A $21,000 cost advantage associated with the decision to fix the old boat.
A $2,000 cost advantage associated with the decision to purchase a new boat.
Answer:
A $1,000 cost advantage associated with the decision to fix the old boat.
Explanation:
According to the scenario, the computation of the given data are as follows:
Dispose amount = $11,000
Replacement boat = $110,000
Rebuilt of boat = $98,000
So, we can calculate the cost advantage by using following formula:
Cost of new boat = replacement boat amount - Dispose amount
= $110,000 - $11,000
= $99,000
So, cost advantage = Cost of new boat - Rebuilt of boat
= $99,000 - $98,000
= $1,000
So, this shows that rebuilt the old boat is preferable because it will cost $1000 less.
Hence, $1,000 cost advantage associated with the decision to fix the old boat.