Answer:
(A) 420,000 cash disbursements
(B) discount.
(C) It will be more than the cash disbursements
Explanation:
6,000,000 x 0.07 = 420,000 cash disbursements
(B) the bonds were issued at discount, because the market rate was higher than 7% so the price fall below face value to match the market price.
(C) It will be more than the cash disbursements. There is adiference between face value and cash proceed from the issuance of the bonds, this diference is amortize each period increasing the interest expense of the bond.
The interest paid annually on the bonds is $420,000. The bonds were neither issued at a premium nor a discount. The annual interest expense on the bonds will be equal to the amount of interest paid each year.
Explanation:a. The interest paid annually on these bonds can be calculated by multiplying the face amount of the bonds ($6 million) by the stated interest rate (7%). Therefore, the annual interest payment is $420,000 ($6 million x 7%).
b. Whether the bonds were issued at a premium or discount depends on the market interest rates at the time of the bond issuance. If the market interest rates were lower than 7%, the bonds would be issued at a premium, and if the market interest rates were higher than 7%, the bonds would be issued at a discount.
c. The annual interest expense on these bonds will be equal to the amount of interest paid each year. This is because the stated interest rate of 7% is the same as the market interest rate at the time of issuance, so there is no premium or discount.
Learn more about Bonds payable here:https://brainly.com/question/34322735
#SPJ3
Macon Enterprises purchased land for $2,000,000 in 2001. In 2017, an independent appraiser assessed the value at $3,400,000. What amount should appear on the financial statements in 2017 with respect to the land and what accounting assumption or principle explains why?
Answer:
The financial statements balance for land will be 2,000,000
Under the Cost and conservatism principles.
Explanation:
Property, Plant and Equipment are valued at cost.
The financial statements balance for land will be 2,000,000
Under the GAAP this should be the principles to explaing this reasoning:
Conservatism principle: Revenues, Gains and assets only when you are sure that they will occur. The land is not for sale, and it is not expected to be sold so the potencial gain for selling or valuation should not be recorded.
Cost principle: The bookkepper should post at their original purchase costs.
If potential GDP is equal to $600 billion, what does the long-run aggregate supply curve look like?A) It is a horizontal line at $600 billion of GDP.B) It is a vertical line at a level of GDP below $600 billion.C) It is a vertical line at $600 billion of GDP.D) It is a vertical line at a level of GDP above $600 billion.
Answer:
C) It is a vertical line at $600 billion of GDP
Explanation:
Aggregate supply is the total value of goods and services that companies established in a country are willing to produce and sell for each price level over a given period of time. It is therefore the sum of the supply curves of each firm.
Potential GDP, in turn, is the value of all final goods and services produced by an economy over a given period of time when all factors of production (capital and labor) are being tapped. It is the maximum production point of an economy. In this example, the potential GDP is 600 billion.
In the long run, an increase in the general price level does not affect aggregate production. Thus the aggregate supply curve of an economy represents the sum of all supply in a situation in which all factors of production are employed. This makes the vertical aggregate supply curve at 600 billion.
How will you save money by buying a franchise?
A. You're free to make your own decisions regarding finances and investments. B. Franchises require less investment than new businesses. C. You can get a volume discount on your products. D. Your employees will be paid by the corporation..10
Answer:
You can get a volume discount on your products.- C.
Answer:
C for pf students
Explanation:
Pf
Peeler's Smoothie Company has provided the following information: Sales price per unit $6.50 Variable cost per unit $2.00 Fixed costs per month $1,500 Calculate the contribution margin ratio. (Round your answer to two decimal places.)
The contribution margin ratio for Peeler's Smoothie Company is 0.69 or 69%, which means that for each dollar of sales, 69 cents contribute to covering fixed costs and profit.
Explanation:The contribution margin ratio is calculated as the difference between the selling price per unit and the variable cost per unit, divided by the selling price per unit. For Peeler's Smoothie Company, the contribution margin per unit is $6.50 (sales price per unit) - $2.00 (variable cost per unit) = $4.50. To find the contribution margin ratio, we divide the contribution margin per unit by the sales price per unit:
Contribution Margin Ratio = ($4.50 ÷ $6.50) = 0.6923
Rounded to two decimal places, the contribution margin ratio is 0.69 or 69%. This means that for each dollar of sales, the company contributes 69 cents to cover its fixed costs and profit.
The gross domestic product (GDP) of the United States is defined as the________ all ________________________________ in a given period of time.
Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2015.
A) Calculo, a U.S. electronics company, produces a calculator at a plant in Indonesia on March 27, 2015. Calculo imports the calculator into the United States on May 18, 2015.
The Jones family buys an antique silver platter at an auction in upstate New York on March 27, 2015.
B) Sofaland, a Swedish furniture company, produces a table at a plant in Virginia on December 9, 2015. It sells the table to a college student on December 24.
C) Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 25, 2015. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2015. (Note: Focus exclusively on whether production of the corn syrup increases GDP directly, and ignore the effect of production of the cereal on GDP.)
D) Tasty's, a U.S. fast-food company, produces a hamburger at one of its many St. Louis locations on January 14, 2015. It sells the hamburger to a customer that same day.
Answer:
The correct answers are B and D, as in both options the goods are produced in the United States. Although option B refers to a Swedish company, it doesn't matter were does the company comes from when referring to the GDP. Option C refers to a product that is not for final consumers.
The gross domestic product (GDP) of the United States is defined as the market value of all the goods and services produced for final demand in the territory of the United States in a given period of time.
Explanation:
In macroeconomics, the gross domestic product (GDP) is a macroeconomic magnitude that expresses the monetary value of the production of goods and services of final demand of a country or region during a given period, usually one year.
Answer:
B) Sofaland, a swedish fourniture company, produce corn syrup at a plant in lowa on September 25
Two new wind-farm tower projects are proposed for a small company that installs them in south western Wisconsin. Project A will cost $250,000 to complete and is expected to have an annual net cash flow of $75,000. Project B will cost $150,000 to complete and should generate annual net cash flows of $52,000. As a small company, the owner and senior management team are very concerned about their cash flow. Use the payback period method and determine which project is better from a cash flow standpoint
Answer:
The Project B is better from a cash flow standpoint.
Explanation:
Payback period : The payback period is that period in which the investment amount is being repay to the company back in terms of profits or savings.
The formula to compute payback period is shown below
Payback period = Initial Investment ÷ Annual net cash inflows
For Project A = $250,000 ÷ $75,000
= 3.33 years
For Project B = $150,000 ÷ $52,000
= 2.88 years
By computing the payback period for both the projects, the Project B has less payback period than Project A.
Hence, the Project B is better from a cash flow standpoint.
To determine which wind-farm tower project is better from a cash flow standpoint, we need to calculate the payback period for each project. Project B has a shorter payback period and is therefore better from a cash flow standpoint.
Explanation:The payback period is a method used to evaluate investments based on when the initial investment is recovered through the project's net cash flows. To determine which wind-farm tower project is better from a cash flow standpoint, we need to calculate the payback period for each project.
For Project A, we divide the initial investment ($250,000) by the annual net cash flows ($75,000) to get a payback period of approximately 3.33 years.
For Project B, we divide the initial investment ($150,000) by the annual net cash flows ($52,000) to get a payback period of approximately 2.88 years.
Comparing the payback periods, we can conclude that Project B has a shorter payback period and is therefore better from a cash flow standpoint as it takes less time to recover the initial investment.
Learn more about Payback period here:https://brainly.com/question/34913988
#SPJ11
The business firm of Tinker, Evers and Chance had a level of inventory of $60 million on January 1, 1908, and ended up the year with an inventory of $70 million on December 31, 1908. The company's expenditures on new plant and equipment for the year was $120 million, while its depreciation on the plant and equipment was $90 million.How much was inventory investment for the year
Answer:
Tinker, Evers and Chance inventory investment 10 millions
Explanation:
Inventory investment:
Will be the diference in amount betwene the ending and beginning invnetory. It assumes that a company will use the revenue from sale to at least maintan ther inventory.
When the company invest on inventory, it meas it increase their stock of goods.
A company will disinvest if the ending is lower than beginning, because the sales proceeds were not used to purchase inventory.
Ending inventory - beginning inventory = inventory investment
70 - 60 = 10
Crystal Corporation produces a single product. The company's variable costing income statement for the month of May appears below: Crystal Corporation Income Statement For the month ended May 31 Sales ($22 per unit) $3,850,000 Variable expenses: Variable cost of goods sold 2,450,000 Variable selling expense 350,000 Total variable expenses 2,800,000 Contribution margin 1,050,000 Fixed expenses: Fixed manufacturing overhead 650,000 Fixed selling and administrative 175,000 Total fixed expenses 825,000 Net operating income $225,000 The company produced 130,000 units in May and the beginning inventory consisted of 90,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. Under absorption costing, for May the company would report a
Answer:
Sales 3,850,000.00
Variable 3,325,000.00 (175,000 x 19)
Gross Profit 525,000.00
S&A 525,000.00
Net Income -
Explanation:
Under aborption cost, the company will include the fixed cost as part of the unit cost.
3850000 / 22 = 175,000 sold units
Variable cost 2,450,000 / 175,000 = 14
650,000 fixed will be distribute among the 130,000 units produced
650,000/130,000 = 5
Absorption cost
14 + 5 = 19
Selling and administrative will be placed as expenses.
Shana continues to buy a necessary medicine even though prices for the medicine rise sharply. Shana's behavior shows howa. the passage of time affects elasticityb. the law of demand eliminates elasticityc. luxury goods are not subject to elasticityd. demand for necessities is inelastic
Answer:
The correct answer is d. Demand for necessities is inelastic.
Explanation:
The price elasticity of demand is measured by the percentual change in quantity of a good divided by the percentual change in the price of the same good. Mathematically:
ε = [tex]\frac{dQ/Q}{dP/P}[/tex]
Where ε represents the price elasticity of demand, Q represents the quantity demanded of a good, P represents the price of the good, dQ represents the variation of the quantity demanded of that good and dP represents the variation of the price of the good.
When the quantity of a good changes less than proportionally than the change in price of the good, it means that the elasticity is inelastic.
Mathematically:
[tex]\frac{dQ}{Q}[/tex] < [tex]\frac{dP}{P}[/tex] ⇒ ε < 1
We can conclude that even though the price of Shana's medicine rises sharply, the fact that she continues to buy it shows no variation in the quantity demanded, therefore the demand for necessities is inelastic.
Shana's behavior shows that the demand for necessities is inelastic. Even when prices rise, she continues to buy the necessary medicine because the demand for such important items is less sensitive to price changes. This is a common pattern seen in inelastic products where despite price increases, the demand remains relatively stable.
Explanation:Shana's behavior demonstrates that demand for necessities is inelastic. A necessity like medicine typically has a high degree of inelasticity, which means that the demand doesn't dramatically reduce, even as the price rises. This can be compared to other inelastic products such as cigarettes, where even a 10% price increase only leads to a 3% drop in demand.
In situations where demand is inelastic, producers can pass increased costs onto consumers, such as taxes or price hikes, because demand is less sensitive to price changes. Thus, despite the sharp rise in medicine prices, Shana continues to buy because it is a necessity.
The concept of price elasticity of demand is used in economic studies to understand how fluctuations in price affect consumer demand. In this scenario, Shana's behavior is akin to highly inelastic demands seen in life-saving drugs and gasoline where there are no close substitutes.
Learn more about Price Elasticity of Demand here:https://brainly.com/question/31293339
#SPJ12
Rey Company’s single product sells at a price of $216 per unit. Data for its single product for its first year of operations follow. Direct materials $ 20 per unit Direct labor $ 28 per unit Overhead costs Variable overhead $ 6 per unit Fixed overhead per year $ 160,000 per year Selling and administrative expenses Variable $ 18 per unit Fixed $ 200,000 per year Units produced and sold 20,000 units 1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.
Answer:
1. Using Absorption Costing
Income Statement
Sales 20,000 X $216 = $4,320,000
Less: Cost of Goods Sold (Note 1) =($1,240,000)
Gross Margin = $3,080,000
Less: Operating Expenses
Selling and Administrative Expense = ($560,000)
(Note 2)
Net Income = $2,520,000
Note:
Cost of goods Sold = All the direct variable cost + direct fixed cost = Direct materials + Direct Labor + Direct Overhead = $20 +$28 + $6 = $54 per unit, Total = $54 X 20,000 units = $1,080,000 + Fixed cost = $160,000 = $1,240,000Selling And Administrative Expense = Variable + Fixed, Variable = $18 X 20,000 units = $360,000, Fixed Expenses = $200,000, Total = $560,0002. Using Variable Statement
Sales 20,000 X $216 = $4,320,000
Less: Variable Costs
Direct Material $20 X 20,000 = ($400,000)
Direct Labor $28 X 20,000 = ($560,000)
Variable Overhead $6 X 20,000 = ($120,000)
Variable Selling Expense $18 X 20,000 = ($360,000)
Contribution Margin = $2,880,000
Less: Fixed Costs
Fixed Overhead = ($160,000)
Fixed Selling & Administrative = ($200,000)
Net Income = $2,520,000
Note: Under Variable Statement first variable expenses are deducted to get the value of contribution, and then fixed expenses are deducted to get net income, whereas in absorption costing firstly manufacturing expenses are deducted to get gross margin and then operating expenses like selling and administrative expenses are deducted to get the net income.
But Net income is same in both cases.
Sales revenue and total costs were calculated for both absorption costing and variable costing income statements. The absorption costing net income resulted in $2,560,000 whereas the variable costing net income resulted in $2,520,000.
Explanation:The absorption costing income statement includes all manufacturing costs, both variable and fixed, in the calculation of the cost of goods sold whereas the variable costing income statement only includes the variable manufacturing costs in the computation of the cost of goods sold.
Absorption Costing Income Statement Sales revenue = 20,000 units x $216 = $4,320,000. Total Costs = Direct materials + Direct labor + Variable overhead + Fixed overhead + Selling expenses = (20,000 units x $20) + (20,000 units x $28) + (20,000 units x $6) + $160,000 fixed overhead + (20,000 units x $18) + $200,000 fixed selling expenses = $1,760,000. Net Income = Sales revenue - Total Costs = $4,320,000 - $1,760,000 = $2,560,000.Variable Costing Income Statement: Total variable costs = Direct materials + Direct labor + Variable overhead + Variable Selling Expenses = (20,000 units x $20) + (20,000 units x $28) + (20,000 units x $6) + (20,000 units x $18) = $1,440,000. Contribution Margin = Sales revenue - Total variable costs = $4,320,000 - $1,440,000 = $2,880,000. Net Income = Contribution Margin - Total Fixed Costs (overhead and selling) = $2,880,000 - ($160,000 + $200,000) = $2,520,000.Learn more about Absorption and Variable Costing here:https://brainly.com/question/33126015
#SPJ3
Beauty Island Corporation began operations on April 1 by issuing 55,000 shares of $5 par value common stock for cash at $13 per share. In addition, Beauty Island issued 1,000 shares of $1 par value preferred stock for $6 per share. Journalize the issuance of the common and preferred shares.
Answer:
The journal entry for issue of common shares is as follows :
1. Cash A/c $715 000 Dr ($55,000×$13)
To common stock $275,000 ($55,000×5)
To Additional paid up capital $4,40000 ($55000×8)
The journal entry for issue of Preference shares is as follows :
Cash A/c $6,000 Dr ($1,000×$6)
To Preferred Shares $1,000 ($1,000×1)
To Additional paid up capital $5,0000 ($1,000×5)
Explanation:
Mainly there are two types of shareholders in the company i.e. equity and preference shareholders. The equity shareholders is the shareholders who carry voting right in the company whereas preference shareholders are those who don't have voting right. The shares means a small part in the company which represent the ownership in the company according to their shares percentage. Whereas, stock represent the securities which are listed in stock exchange.
Following information is given in the question:
1. Issue of common shares = 55,000
2. Par value of common stock = $5
3. Cash for per share = $13
4. Issue of preference shares = 1,000
5. Par value of preference stock =$1
6. Per share for preference stock = $6
Journal Entry: The journal entry is the first stage to record the debit and credit side. Debit here means the expenditure incurred by the company whereas the Credit shows the income side which adds value to the company profit.
The journal entry for issue of common shares is as follows :
1. Cash A/c $715 000 Dr ($55,000×$13)
To common stock $275,000 ($55,000×5)
To Additional paid up capital $4,40000 ($55000×8)
The journal entry for issue of Preference shares is as follows :
Cash A/c $6,000 Dr ($1,000×$6)
To Preferred Shares $1,000 ($1,000×1)
To Additional paid up capital $5,0000 ($1,000×5)
Note: The remaining amount will be credited to additional paid up capital with remaining balance.
To journalize the issuance of common and preferred shares for Beauty Island Corporation, debit cash and credit common stock and additional paid-in capital for common stock issuance, and debit cash and credit preferred stock and additional paid-in capital for preferred stock issuance. The common stock issuance involves 55,000 shares of $5 par value stock sold at $13 per share, while the preferred stock issuance involves 1,000 shares of $1 par value stock sold at $6 per share.
Explanation:To journalize the issuance of the common and preferred shares for Beauty Island Corporation, we need to record the transaction in the company's accounting records. Let's start with the common stock issuance:
Debit Cash, $715,000 (55,000 shares x $13 per share)Credit Common Stock, $275,000 (55,000 shares x $5 par value)Credit Additional Paid-in Capital, $440,000 ($715,000 cash received - $275,000 par value)Now, let's move on to the preferred stock issuance:
Debit Cash, $6,000 (1,000 shares x $6 per share)Credit Preferred Stock, $1,000 (1,000 shares x $1 par value)Credit Additional Paid-in Capital, $5,000 ($6,000 cash received - $1,000 par value)Learn more about Journalizing a stock issuance here:https://brainly.com/question/32813276
#SPJ3
Which of the items is most likely to be a complement to coffee?
decaf coffee
tea
creamer
baked beans
Out of the given options, creamer is the most appropriate complement to coffee as it is specifically designed to be added to coffee to enhance its flavor and texture.
Explanation:The question asks which of the items is most likely to be a complement to coffee: decaf coffee, tea, creamer, or baked beans. In this context, a complement refers to something that is often used together with or adds value to another product. While decaf coffee and tea are alternative forms of beverages, and baked beans are a food item not typically associated with coffee, creamer stands out as the most appropriate complement. Creamer is specifically designed to be added to coffee to enhance its flavor, texture, and overall drinking experience. Therefore, out of the listed options, creamer is the most logical choice as a complement to coffee, fulfilling the role of making the coffee more enjoyable to drink for many people.
Two processes can be used for producing a polymer that reduces friction loss in engines. Process K will have a first cost of $160,000, an operating cost of $7000 per quarter, and a salvage value of $40,000 after its 2-year life. Process L will have a first cost of $210,000, an operating cost of $5000 per quarter, and a $26,000 salvage value after its 4-year life. Which process should be selected on the basis of a present worth analysis at an interest rate of 8% per year, compounded quarterly?
Answer:
Process L will be selected because their NPV is better than Process K
Explanation:
Process K will have a year 0 investment of -$160,000.00
Then during 8 quarter a cost of 7,000 present value of -$51,278.37
Lastly, a salvage value of 40,000 at the end PV of $34,293.55
Net present value of Process K -$176.984,82
at 8% per year with quarterly compound
Process L will have a year 0 investment of -$210,000.00
Then during 16 quarter a cost of 5,000 PV of -$36,627.41
26000 salvage value at the end of the period: pv $19110.76
Net present value of Process L -$154.261,82
at 8% per year with quarterly compound
A country has reached a level of economic development where the manufacturing of both semidurable and nondurable consumer goods has just begun. Also, the goods demanded relate to equipment and supplies to support manufacturing. In which stage of Rostow's five-stage model of economic growth does the country fit?
Final answer:
The country fits into the second stage of Rostow's model, known as the preconditions for take-off, where it begins to move toward industrialization and the economy starts to demand more supplies for manufacturing.
Explanation:
The country in question, which has begun manufacturing both semidurable and nondurable consumer goods and demands equipment and supplies to support manufacturing, fits into the second stage of Rostow's five-stage model of economic growth. This stage is known as the preconditions for take-off. At this level, the society is transitioning from an agrarian economy to one that begins to embrace industrialization. Infrastructure improvements and an increase in productivity in agriculture are typical, paving the way for more industrial activities. Investment in manufacturing industries drives the demand for equipment and supplies.
Rostow's model shows how economies evolve from a traditional society with a predominance of agriculture to a stage of high mass consumption with a diversified economy. Each stage represents increasing levels of economic output, urbanization, and improvements in the standard of living. As a country progresses through these stages, it witnesses significant structural changes across various sectors of the economy.
Which of the following best describes the difference between a convertible bond and a warrant? Convertible bonds give the investor the option to exchange bonds for shares at a certain price, whereas warrants give the investor the option to buy shares at a certain price. Convertible bonds give the investor the option to buy shares at a certain price, whereas warrants give the investor the option to exchange bonds for shares at a certain price.
Answer: Statement A
Explanation: Convertible bonds is a type of bond security which gives its holder the right to convert each bond to a specified number of shares. These are hybrid securities having features of both equity and debt.
.
Warrants are securities that give their holder the right to purchase the common shares of the company at a specified price and before a certain time period.
.
Thus, from the above explanation we can conclude that statement A is correct.
The main difference between convertible bonds and warrants is that convertible bonds allow the investor to convert the bond into a set number of company shares, while warrants grant the right to purchase the shares at a specific price. Both provide a means to benefit from the company's growth through equity exposure, but with less risk compared to directly buying stocks.
Explanation:The difference between convertible bonds and warrants lies in the rights they confer to the investor. Convertible bonds allow the investor the option to exchange the bond for a predetermined number of shares of the issuing company's stock at a certain conversion price. Meanwhile, a warrant gives the investor the right to purchase shares of the company's stock at a specific price until the expiration date of the warrant. Both instruments are linked to the company's equity and provide a way for investors to potentially benefit from the company's growth without directly purchasing shares.
It's important to note that investing in corporate stocks carries more risk compared to bonds. While the market price of a stock can be volatile, a bond's return is contractually fixed unless the issuer defaults. Bonds, on the other hand, are subject to interest rate risk, which affects the market price of existing bonds if the general level of interest rates change.
Moreover, from a firm's point of view, issuing bonds is a form of borrowing directly from investors which can be cheaper than obtaining a bank loan. A bond is essentially an I.O.U., indicating that the firm owes a contractual amount of interest payments to bondholders and must repay the principal at maturity, regardless of the company's performance. Conversely, equity investors are entitled to a share of the corporation’s earnings, which are not guaranteed and are dependent on the company's success or failure.
The following is the adjusted trial balance of Wilson Trucking Company. Account Title Debit Credit Cash $ 8,000 Accounts receivable 17,500 Office supplies 3,000 Trucks 172,000 Accumulated depreciation — Trucks $ 36,000 Land 85,000 Accounts payable 12,000 Interest payable 4,000 Long-term notes payable 53,000 Common stock 30,000 Retained earnings 145,000 Dividends 20,000 Trucking fees earned 130,000 Depreciation expense — Trucks 23,500 Salaries expense 61,000 Office supplies expense 8,000 Repairs expense — Trucks 12,000 Totals $ 410,000 $ 410,000 The retained earnings account balance is $145,000 at December 31, 2012. (1) Prepare the income statement for the year ended December 31, 2013.
Answer:
The company earns a net profit of $25,500 for the year ended December 31, 2013
Explanation:
The income statement is that statement which records expenditure & income and gains. It is also known as profit or loss account.
The income statement either comes in net profit or net loss which reflects the profit or loss of the company for a particular year.
The profit is come when revenues is higher than expenses whereas losses come when revenue is less than expenses.
The income statement for the year ended December 31, 2013 is shown below:
= Trucking fee earned - Salaries expenses - Office supplies expenses - Repair expenses - depreciation expenses
= $130,000 - $61,000 - $8,000 - $12,000 - $23,500
= $25,500
Since, the positive amount is come.
So, the company earns a net profit of $25,500 for the year ended December 31, 2013.
To set up a T-account balance sheet for the bank, list the assets (deposits, reserves, and government bonds) and the liabilities (loans). Calculate the bank's net worth by subtracting the liabilities from the assets.
Explanation:To set up a T-account balance sheet for the bank, we list the assets and liabilities in separate columns. The assets include deposits ($400), reserves ($50), and government bonds ($70). The liabilities include loans ($500). The net worth of the bank, also known as equity, can be calculated by subtracting the liabilities from the assets. In this case, the net worth would be the sum of the assets ($400 + $50 + $70) minus the loans ($500), which equals $20.
Workman Software has 8.8 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 107.2 percent of par. a. What is the current yield on the bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the effective annual yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
current yield 8.2089552%
YTM = 8.05%
effective annual yield = 4.92%
Explanation:
(A)
current yield = C/P
coupon payment / market price
8.8/107.2 = 0.082089552 = 8.2089552%
(B)
[tex]P = \frac{C}{2} \times\frac{1-(1+YTM/2)^{-2t} }{YTM/2} + \frac{CP}{(1+YTM/2)^{2t}}[/tex]
First par being the present value of the coupon payment and second the redeem of the face value at the end of the bond.
market price 107.2
face value 100
time = 19
rate 8.8%
C = annual coupon payment 100 x 8.8% = 8.8
You solve this using a financial calculation and get the semiannual rate
YTM/2 = 0.040268160
then multiply by 2 to get the annual YTM
0.040268160 x 2 =
YTM = 0.08053632 = 8.05%
(C)
Effective Annual Yield
[tex](1+HPR)^{365/time} -1 = EAY[/tex]
where:
Holding period return:
[tex]\frac{Net \: Return}{Investment} = HPR[/tex]
In this case:
coupon payment + redem - investment = net return
8.8 * 19 + 100 - 107.2 = 160
160/107.2 = 1.492537313
Then
[tex](1+HPR)^{365/time} -1 = EAY[/tex]
[tex](1+1.142537313)^{\frac{365}{19\times365}} -1 = EAY[/tex]
EAY = 0.049242509 = 4.9242509%
The properties of a bond, such as the coupon rate, maturity date and face value, are used to calculate the current yield, the yield to maturity (YTM), and the effective annual yield of a bond. The yield represents the return an investor will receive by holding the bond.
Explanation:A bond has several parts. It is an 'I owe you' note that an investor receives in exchange for capital or money which the borrower has to pay back at maturity. The specifics of a bond are usually given by the coupon rate or interest rate, its maturity date, and its face value, which is the amount the borrower agrees to pay the investor at maturity.
The current yield on a bond is calculated by the annual income (the interest payment) divided by the current market price. For the bond from Workman Software, the annual interest income is 8.8% of its face value and is currently sold for 107.2% of par. The yield to maturity or YTM represents the total returns expected on a bond if it is held until maturity. This considers both the coupon payments received semiannually and the face value received at the end of maturity. Finally, the effective annual yield takes into account the compounding of interest in a given year.
Learn more about Bond Yields here:https://brainly.com/question/32925205
#SPJ3
Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, S5 uses 3 pounds of the material, and G9 uses 6 pounds of the material. Demand for all products is strong, but only 50,000 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. K1 S5 G91Selling price$160 $112 $210 Variable costs 96 85 144 1. Calculate the contribution margin per pound for each of the three products.
Answer:
The contribution per pound for K1, S5, and G9 is $64 per pound, $27 per pound, and $66 per pound respectively.
Explanation:
The contribution margin shows a difference between selling price per unit and the variable cost per unit.
In equation, it is displayed below:
Contribution per unit = Selling price per unit - Variable cost per unit
Since, in the question we have to calculate the contribution margin per pound for each of the three products. So by using the above equation, the calculation can be made which is shown below:
Contribution margin per pound for Product K1
= K1 Selling price per pound - K1 Variable cost per pound
= $160- $96
= $64 per pound
Contribution margin per pound for Product S5
= S5 Selling price per pound - S5 Variable cost per pound
= $112- $85
=$27 per pound
Contribution margin per pound for Product G9
= G9 Selling price per pound - G9 Variable cost per pound
= $210- $144
=$66 per pound
Other costs and production level is immaterial while calculating contribution margin for these three products.
Hence, the contribution per pound for K1, S5, and G9 is $64 per pound, $27 per pound, and $66 per pound respectively.
At Children's Hospital in Denver, good attendance is encouraged by recognizing staff members who have not missed work in the previous three months. At three-month intervals, at staff meetings, the names of those who have not missed work that quarter are announced. These employees are given ribbons of excellence, perfect attendance pins, prizes, tote bags, alarm clocks, gift certificates or movie tickets. As an added incentive, the person with the longest record of perfect attendance is allowed to choose first from the list of "gifts." This is an example of how ________ are used in association with the _________ theory. A. Rewards; Reinforcement B. Instruments; Expectancy C. Satisfiers; Equity D. Objectives; Goal-setting E. Hygiene factors; Herzberg's
Answer:
his is an example of how rewards are used in association with the reinforcement theory
Explanation:
The reinforcement theory is the process of adjust the behavior of a person or a group by giving them a punishment or a reward for a specific decision or action according to the desired results.
In this case, the employees are recognized by their good behavior when they avoid missing days for a three months period. They receive a visible recognition and some gifts; these rewards show a positive reinforcement according to the reinforcement theory
The Children's Hospital in Denver's recognition program for staff with perfect attendance aligns with Reinforcement theory as it uses rewards to positively reinforce the desired behavior.
Explanation:The Children's Hospital in Denver's strategy of recognizing and rewarding staff members who have perfect attendance is an example of the use of rewards in association with Reinforcement theory. This motivational strategy is designed to increase the likelihood of the desired behavior - good attendance - by providing positive reinforcement. The hospital acknowledges employees with various prizes and the opportunity to choose from these rewards, with the individual who has the longest record of perfect attendance getting the privilege to select first. This technique aligns with the principles of reinforcement theory which suggests that behavior followed by positive consequences is likely to be repeated.
What step is NOT likely to reduce possible attacks to an organization: Select one: a. Restart the Active Directory database b. Install anti-spyware software c. Install a firewall d. Ensure all patches for the operating system and applications are installed
Answer:
The correct answer would be option A, Restart the active directory database.
Explanation:
When there is an attack on organizational data or information systems, there are many measures that need to be taken to avoid such attacks to make sure that these attacks don't happen again and to check that all systems are working correctly or not. So in this regard, option A is the most appropriate one, because restarting a database will not help in reducing the possible attacks to an organizational data or information systems. Anti virus spyware, installing firewall and ensuring the working of all patches for an operating system and application are more important tasks to do in such situation.
Answer
Correct option is (a). An organization needs to be prepared in order to avoid a possible cyber attack. Though a number of steps are involved in preventing such an attack, restarting the active directory database is not one of them.
Explanation
A Cyber attack can be defined in the most simple manner as an attempt to gain access to a computer system illegally with the motive to cause harm. Cyber attacks can compromise data and may lead to several Cyber crimes such as information and identity theft.
Active directory is a Microsoft technology. It is used to manage computers and other devices on a network. Its purpose is to authorize and authenticate all users and computers. Restarting an active directory database is not going to prevent cyber attacks as it will not stop skeleton key malware from attacking and gaining control of the system.
Both large, as well as small companies, face threats of a cyber attack. A successful cyber attack can cause huge damages to an organization. These attacks can cause financial loss and legal consequences for the company.
In order to prevent these from happening the companies need to be prepared in advance to prevent these attacks from being successful.
Further Explanation
There are a number of steps that the companies can take to be prepared. These steps are mentioned as follows:
The companies can keep a firewall for their internet connection. They need to use anti-spyware and antivirus software. These software should be regularly updated. The employees should be trained and educated in cyber security. The hardware of the company should be protected from outsiders.The company data should be backed up and saved in more than one place. The wi-fi network should be secured and hidden. The operating system and applications should be regularly updated and all patches and new software updates should be installed. The employees should have individual user accounts and should be discouraged from sharing passwords. Employee access to data and information should be limited.Learn More
Learn more about spear-phishing attacks at: https://brainly.com/question/13202003
(Answered by Diatonic254)
Learn more about organization's security at: https://brainly.com/question/5939963
(Answered by Nicks20)
Keywords
Cyber attack, Cyber security, Malware, Anti spyware, Computer systems, Companies' security, Organizational security, data and information.
If a security currently worth $12,800 will be worth $16,843.93 seven years in the future, what is the implied interest rate the investor will earn on the security—assuming that no additional deposits or withdrawals are made?
Answer:
The implied interest rate will be 4%
Explanation:
We need to check for the annual rate that generate the interest over the next seven years that makes $12,800 become $16,843.93:
[tex]principal * (1 + rate)^{7} = $future value[/tex]
We replace with our know values
12,800 x (1+rate)^7 = 16,843.93
16,843.93 /12,800 = (1+rate)^7
sq7 (16,843.93/12,800) - 1 = rate
And know we find out the unknow value
rate = 0,03999994 = 0.04 = 4%
First We need to check for the annual rate After that we generate the interest over the next 7 years that makes $12,800 it becomes $16,843.93:
Implied interest rate[tex]principal * (1 + rate)7 = future value[/tex]
Then We replace with our know values:
After that 12,800 x (1+rate)^7 = 16,843.93
Then 16,843.93 /12,800 = [tex](1+rate)^7[/tex]
Now sq7 (16,843.93/12,800) - 1 = rate
And also know we find out the unknow value that is
Then rate = 0,03999994 = 0.04 = 4%
Thus, The implied interest rate will be 4%
Find out more information about implied interest rate:
https://brainly.com/question/2284670
Oprah just inherited a house with a market value of $100 comma 000, and she does not expect the market value to change. Each year, she will pay $750 for utilities and $5 comma 000 in taxes. She can earn 4 percent interest on money in a bank account. Her cost of living in the house for the year is $
Answer:
9,750 Cost of living per year
Explanation:
100,000
750 utilities
5,000 taxes
100,000 x 0.04 = 4,000 Opportunity cost
9,750 Cost of living per year
We have to include the interest yiled, becuse if she decides to leave, it will sale and receive that cash on interest.
This is an opportunity cost.
The cost of living in the house for the year is $9,750.
Explanation:The cost of living in the house for the year can be calculated as the sum of the utilities and taxes paid plus the opportunity cost of the interest that could have been earned on the money spent on the house. Here's the calculation:
Cost of living = Utilities + Taxes + Opportunity cost of interest
= $750 + $5,000 + (0.04 * $100,000)
= $750 + $5,000 + $4,000
= $9,750
Therefore, Oprah's cost of living in the house for the year is $9,750.
Learn more about Cost of living here:https://brainly.com/question/31676598
#SPJ12
A game has an expected value to you of $600. It costs $600 to play, but if you win, you receive $100,000 (including your $600 bet) for a net gain of $99 comma 400. What is the probability of winning?
Given:
Expected value, E(X)= $600
Net Profit = $99400
Cost of playing once = $600
Solution:
Let the probability of winning be P(X) and that of losing [tex]P(\bar{X})[/tex]
[tex]P(\bar{X})[/tex] = 1 - P(X)
Now expected value, E(X) = [tex]Profit\times P(X) + loss\timesP(\bar{X}) [/tex]
E(X) = 99400P(X) + (-400)(1 - P(X))
600 = 99400P(X) -400 +400P(X)
P(X) = 0.01
Therefore, the probability of winning is P(X) = 0.01 or 1%
Final answer:
To find the probability of winning a game with an expected value of $600 and a cost to play of $600, we use the expected value formula. The gain from winning is $99,400, leading to a probability of winning of approximately 0.60%.
Explanation:
To calculate the probability of winning, we use the concept of expected value, which is the average amount one can expect to win per game over many plays. Here, the expected value of the game is given as $600, which is also the cost to play. To find the probability of winning, we assume that if you win, there is a net gain of $99,400 ($100,000 - $600 to play). Let's denote the probability of winning as P(win).
The expected value (EV) of the game can be calculated with the formula:
EV = (P(win) × Gain from Winning) - (P(loss) × Cost of Losing)
Since you either win or lose, P(loss) is 1 - P(win) and the Cost of Losing is $600. As the expected value is $600 and the cost of playing is $600:
$600 = (P(win) × $99,400) - ((1 - P(win)) × $600)
By solving for P(win), we find that:
P(win) = $600 / $99,400
P(win) ≈ 0.0060422956 ≈ 0.60%
Thus, the probability of winning the game is approximately 0.60%.
You were recently promoted to the head of the machine shop. As you start to look around, you notice that there are many machines on the production floor, but there doesn't seem to be an efficient flow from one machine to another. Plus, the work in progress inventory is stacked up in front of many of the machines. You know that a lot of work in progress inventory is an indication of an inefficient process so you want to understand the movement of the material through the shop so that you can reduce the non-valued-added activities and reduce delay. What would be the best method to use? __________
The best method to understand the movement of material through the machine shop and reduce non-value-added activities and delays is to implement Lean Manufacturing principles.
Explanation:The best method to use in order to understand the movement of material through the machine shop and reduce non-value-added activities and delays is to implement Lean Manufacturing principles. Lean Manufacturing focuses on eliminating waste, improving flow, and maximizing value for the customer. By mapping the current state of the production process, identifying bottlenecks and non-value-added activities, and implementing strategies such as cell manufacturing, kanban systems, and continuous improvement, the machine shop can achieve a more efficient flow of material.
Given the following information about Elkridge Sporting Goods, Inc., construct a balance sheet for June 30, 2013. On that date the firm had cash and marketable securities of $25,135, accounts receivable of $43,758, inventory of $172,500, net fixed assets of $322,300, and other assets of $13,125. It had accounts payables of $67,855, notes payables of $36,454, long-term debt of $224,300, and common stock of $150,000. How much retained earnings did the firm have?
Answer:
Retained Earnings = 109,909
Explanation:
[tex]\left[\begin{array}{cccc}cash&25,135&AP&67,855\\AR&43,758&NP&36,454\\inventory&172,500&Long-term&222,300\\fixed \:assets&332,300&Common\: Stock&150,000\\other \: assets&13,125&RE&110,209\\Total Assets&586,818&Total L+E&586,818\\\end{array}\right][/tex]
First
We add all the assets together. 586,818
Then
we add the lliabilities and common stock. 476,909
Finally
We use the accounting equation to solve for RE
Assets = Liab + Equity
586,818 = sum of liab and equity accounts
we know that all the accounts, except RE add to 476,909
586,818 = 476,909 + RE
586,818 - 476,909 = RE
RE = 109,909
Suppose Pete was looking for a job for so long that he decided to give up looking for a job altogether. Pete has decided to retire and live with his parents. In the official statistics, Pete would be counted as _______.
Answer: Marginally - attached worker
Explanation: While calculating the underemployment rate the government usually includes three groups these are : unemployed workers who are actively looking for work; involuntarily part-time workers and marginally attached workers who want and are available to work , but have given up actively looking.
Therefore Pete would lie under the category of marginally attached worker who want and are available to work , but have given up actively looking.
Square Company purchases an equity investment in Tangle Company at a purchase price of $8 million, representing 40% of the book value of Tangle. During the current year, Tangle reports net income of $700,000 and pays cash dividends of $300,000. At the end of the year, the market value of Square's investment is $8.3 million. What amount of income does Square report relating to this investment in Tangle for the year?
Answer:
The $280,000 is the income which square report in Tangle for the year.
Explanation:
For computing the income relating to the investment in Tangle for the year, the net income and percentage is applied or we can say equity method is applied.
In mathematically,
Income = Net income × percentage
= $700,000 × 40%
=$280,000
All other cost like dividend, market value, purchase price is irrelevant while computing the investment income.
Hence, the $280,000 is the income which square report in Tangle for the year.
A C corporation earns $ 7.90 per share before taxes and the company pays a dividend of $ 5.00 per share. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the after-tax amount an individual would receive from the dividend?
Answer:
$4.55
Explanation:
The corporate tax rate is applied to the net income, not the dividends
And the personal tax rate is applied to non-dividends income so it is not relevant here.
The stockholder would receive $5.00 before taxes. and it will pay 15% for this in taxes.
$5 x 15% = $0.45 dividend taxes
after tax $5 - $0.45 = $4.55
Activity-based costing (ABC) can eliminate cost distortions because ABC systems ________.A) establish a cause-and-effect relationship with the activities performedB) use single cost pool for all overhead costs, thereby enabling simplicityC) use a broad average to allocate all overhead costsD) never consider interactions between different departments in assigning support costs
Answer:
A) establish a cause-and-effect relationship with the activities performed
Explanation:
Activity-based costing (ABC) can eliminate cost distortions because ABC systems establish a cause-and-effect relationship with the activities performed.
Final answer:
Activity-based costing (ABC) reduces cost distortions by establishing a clear cause-and-effect relationship between activities and their associated costs, ensuring a more accurate allocation of overhead.
Explanation:
Activity-based costing (ABC) can eliminate cost distortions because ABC systems establish a cause-and-effect relationship with the activities performed. ABC helps an organization to accurately trace costs to products or services, by identifying the full cost of different activities. It allows for the allocation of indirect costs based on actual consumption rather than a broad average. ABC distinguishes between direct and indirect costs, and employs multiple cost pools to reflect the complexity of different activities, providing a more precise allocation of overhead costs. The allocation bases are tied closely to actual usage or drivers, such as the amount of time spent on a service, resulting in a fairer and more accurate distribution of costs.
Marginal cost–benefit analysis and the goal of the firm Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing the robotics used on the heavy truck gear line will produce total benefits of $560,000 (in today’s dollars) over the next 5 years. The existing robotics would produce benefits of $400,000 (also in today’s dollars) over that same time period. An initial cash investment of $220,000 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $70,000. Show how Ken will apply marginal cost–benefit analysis techniques to determine the following: a. The marginal (added) benefits of the proposed new robotics. b. The marginal (added) cost of the proposed new robotics. c. The net benefit of the proposed new robotics. d. What should Ken recommend that the company do? Why? e. What factors besides the costs and benefits should be considered before the final decision is made?
Answer:
a. The marginal (added) benefits of the proposed new robotics = $800,000
b. The marginal (added) cost of the proposed new robotics = $150,000
c. The net benefit of the proposed new robotics = $650,000
d. The company shall get the new robotics as there is net benefit of $650,000, and future benefits are more than current benefits.
e. Besides the costs and benefits the company shall consider the following factors also:
Time value of money,
Employees Training cost if required for new robotics.
Employees behavior towards this installation.
Environmental effects of such robotics, installed.
Explanation:
Provided details as follows:
Benefits every year with new robotics = $560,000
Benefits every year with old robotics = $400,000
Cost of new robotics = $220,000
Resale price of old robotics = $70,000
a. The marginal (added) benefits of the proposed new robotics
Marginal benefits are additional benefits
Benefits every year with new robotics = $560,000 per year
Less: Benefits every year with old robotics = $400,000 per year
Thus Marginal (added) Benefits = $160,000 for 5 years = $800,000
b. The marginal (added) cost of the proposed new robotics.
Marginal added cost will be additional cost
Cost of new robotics = $220,000
Less: Resale price of old robotics = $70,000
Marginal added cost = $150,000
c. The net benefit of the proposed new robotics
The net benefit of the proposed new robotics = Marginal (added) Benefits $800,000 - Marginal added cost $150,000 = $650,000
d. The company shall get the new robotics as there is net benefit of $650,000, and future benefits are more than current benefits.
e. Besides the costs and benefits the company shall consider the following factors also:
Time value of money,
Employees Training cost if required for new robotics.
Employees behavior towards this installation.
Environmental effects of such robotics, installed.
Final answer:
Ken Allen will perform a marginal cost-benefit analysis for replacing robotics at Bally Gears, Inc. The analysis reveals a marginal benefit of $160,000, marginal costs of $150,000, and a net benefit of $10,000, suggesting the investment is financially viable. Additional factors, such as technological obsolescence and operational impacts, should also be considered.
Explanation:
Ken Allen is tasked with performing a marginal cost-benefit analysis for Bally Gears, Inc., concerning the replacement of robotics on the heavy truck gear line. To assess this proposal effectively, Ken will calculate the marginal benefits, marginal costs, and the net benefit of the proposed new robotics and then make a recommendation based on these figures.
a. Marginal (added) benefits of the proposed new robotics
The marginal benefits are calculated by subtracting the total benefits of the existing robotics from the total benefits of the new robotics. Thus, $560,000 (new) - $400,000 (existing) = $160,000 as the marginal benefits.
b. Marginal (added) cost of the proposed new robotics
The marginal costs consider the initial cash investment required for the new equipment and the opportunity cost of selling the existing robotics. Therefore, $220,000 (new investment) - $70,000 (sale of existing) = $150,000 as the marginal costs.
c. Net benefit of the proposed new robotics
To find the net benefit, subtract the marginal costs from the marginal benefits: $160,000 - $150,000 = $10,000 as the net benefit.
d. Recommendation
Given that the marginal benefits exceed the marginal costs, resulting in a positive net benefit of $10,000, Ken should recommend proceeding with the replacement of the robotics. This investment is projected to improve the company's financial standing over the next five years.
e. Additional Factors to Consider
Beyond marginal costs and benefits, it's critical to consider factors like the potential for technological obsolescence, maintenance costs, operational disruptions during installation, and improvements in product quality or production efficiency that might influence the final decision.