Answer:
A: we reocrd at cost, which is the discounted price:
40,000 x (1 - 2%) = 39,200
Equipment 39,200 debit
Cash 39,200 credit
B: we discount the note implicit interest:
42,000 / 1.12 = 37,500
Equipment 37,500 debit
Note payables 37,500 credit
C: Because; there is commercial substance we recognize the loss on the old equipment as the book value is 13,500 while it is being traded at 8,500
We write off, post the cash used and the loss. The new equipment enter the accounting for the difference to blaance the entry:
equipment 45,500 debit
acc depreciation 15,500 debit
loss at disposal 5,000 debit
cash 37,000 credit
equipment 29,000 credit
D: we evaluate the equipment at fair value
Equipment 40,000 debit
common stock 2,500 credit
additional paid-in 37,500 credit
We now it is no-par therefore there is an additional paid in.
As we aren't provide with the face value we assume is 1 dollar.
Explanation:
A.
Journal entry 40,000/(1-.02) = 39,200
Debit: Equipment - new 39,200
Credit: Accounts Payable 39,200
B. 42,000/(1+.12)=37,500 then 42,000-37,500 = 4,500
Debit: Equipment - new 37,500
Debit: Discount on Notes Payable 4,500
Credit: Notes Payable 42,000
C.
Debit: Equipment - new 45,500 (37,000+8,500)
Debit: Accumulated Depreciation 15,500
Debit: Loss on Exchange of assets 5,000 (13,500-8,500)
Credit: Cash 37,000
Credit: Equipment - old 29,000
D.
Debit: Equipment 40,000
Credit: Common Stock 40,000
A 4-year project has an annual operating cash flow of $53,500. At the beginning of the project, $4,450 in net working capital was required, which will be recovered at the end of the project. The firm also spent $22,800 on equipment to start the project. This equipment will have a book value of $4,820 at the end of the project, but can be sold for $5,790. The tax rate is 35 percent. What is the Year 4 cash flow?
A. $61,714
B. $54,501
C. $20,633
D. $64,080
E. $63,401
Answer:
E. $63,401
Explanation:
gain on disposal = salvage value of plant - book value on date of sale
= $5,790 - $4,820
= $970
tax on disposal = $970*35%
= $339.50
after tax salvage value = $5,790 - $339.50
= $5,450.50
total cash flow in 4 years
= annual operating cash flow + net working capital + after tax salvage value
= $53,500 + $4,450 + $5,450.50
= $63,401
Therefore, The Year 4 cash flow is $63,401.
Divine Apparel has 2,600 shares of common stock outstanding. On October 1, the company declares a $0.25 per share dividend to stockholders of record on October 15. The dividend is paid on October 31. Record all transactions on the appropriate dates for cash dividends.
Answer:
Explanation:
The journal entries are shown below:
On October 1
Dividend Declared A/c Dr $650 (2,600 shares × $0.25)
To Dividend payable A/c $650
(Being dividend is declared)
On October 15
No entry is required
On October 31
Dividend payable A/c Dr $650
To Cash A/c $650
(Being dividend is paid for cash)
The company Divine Apparel declares a dividend of $0.25 on October 1, subsequently on October 31, the company pays out these dividends to all registered shareholders as of October 15. The total dividend payout would be $650.
Explanation:The actions you described pertain to what is often referred to in the world of stocks and finance as dividend declaration and payment. On October 1, Divine Apparel declares a dividend of $0.25. This declaration doesn't result in a financial transaction just yet, but rather it promises a future cash outflow to shareholders.
To calculate this, we multiply the number of shares - 2,600 shares in this case - by the declared dividend of $0.25. This calculation would result in a total dividend of $650.
October 15 marks the 'record date', this is the date when the company looks at its records to see who the shareholders are. An investor must be listed as a holder of record to ensure the right of a dividend payout. It's important to note that there are no accounting entries to be made on this date, this is purely an administrative date.
Finally, October 31 is the 'payment date'. Every shareholder of record as of October 15 will receive the stipulated dividend. In this case, Divine Apparel pays out $650 in total dividends to the shareholders it had registered on October 15.
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Consider an industry in which chief executive ocers (CEOs) run rms. There are two types of CEOs: exceptinal and average. There is a fixed supply of 100 exceptional CEOs and an unlimited supply of average CEOs. Any individual capable of being a CEO in this industry is willing to work for a salary of $144,000 per year.
The long-run total cost of a rm that hires an exceptional CEO at
this salary is
CE(Q) =(144 + 1/2Q^2 if Q > 0
0 if Q = 0
where Q is annual output. The long-run total cost for a firm that hires an average CEO for $144,000 per year is CA(Q) = 144 + Q^2 of Q > 0 and 0 otherwise. The market demand curve in this market is D(P) = 7, 200 - 100P. Let n be the number of firms run by average CEOs in the industry.
a) What is the minimum e efficient scale for a firm run by an average CEO? What is the minimum level of long-run average cost for such a firm?
b) What is the long-run equilibrium price in this industry, assuming that it consists of firms with both exceptional and average CEOs?
c) At this price, how much output will a firm with an average CEO produce? How much output will a firm with an exceptional CEO produce?
d) At this price, how much output will be demanded?
e) Using your answers to parts (c) and (d), determine how many firms with average CEOs will be in this industry at a long-run equilibrium.
f) Assuming that firms bid against each other for the services of exceptional CEOs, what would you expect their salaries to be in a long-run competitive equilibrium?
Answer
The answer and procedures of the exercise are attached in the following 3 images.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in 3 sheets with the formulas indications.
Consider an economy with two types of firms, S and I. S firms always move together, but I firms
move independently of each other. For both types of firms there is a 20% probability that they
will have a 20% return and a 80% probability that they will have a -30% return.
What is the expected return for an individual firm?
A) -12%
B) -20%
C) 10%
D) 20%
Answer:
option (B) -20%
Explanation:
Data provided in the question:
Return Probability
20% 20%
-30% 80%
Now,
Expected return for an individual firm = ∑ (Return × Probability)
or
Expected return for an individual firm = ( 0.20 × 0.20 ) + ( -0.30 × 0.80 )
or
Expected return for an individual firm = 0.04 + ( - 0.24)
or
Expected return for an individual firm = - 0.2
or
Expected return for an individual firm = -20%
Hence,
The correct answer is option (B) -20%
Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November.Sales (5,700 units) $ 319,200Variable expenses 188,100Contribution margin 131,100Fixed expenses 106,500Net operating income $ 24,600If the company sells 5,300 units, its net operating income should be closest to:Multiple Choice$24,600$2,200$22,874$15,400
Answer:
$15,400
Explanation:
Please see attachment
Product B has revenue of $39,500, variable cost of goods sold of $25,500, variable selling expenses of $16,500, and fixed costs of $15,000, creating a loss from operations of $17,500.
Required:
1. Prepare a differential analysis as of May 9 to determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
2.
Determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2).
Amount DescriptionsFixed
Income (loss)
Revenue
Total costs
Variable cost of goods sold
Variable selling and administrative expenses
1. Prepare a differential analysis as of May 9 to determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
Differential Analysis
Continue Product B (Alternative 1) or Discontinue Product B (Alternative 2)
May 9, 2016
1
Continue Product B
Discontinue Product B
Differential Effect on Income
2
(Alternative 1)
(Alternative 2)
(Alternative 2)
3
4
Costs:
5
6
7
8
9
2. Determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2).
The company is indifferent since the result is the same regardless of which alternative is chosen.
Discontinued
Continued
Answer:
We should discontinue Product B
Explanation:
We should check if Product B generates a contribution or not:
We subtract from the sales revenues the variable cost:
revenue 39,500
variable cost of goods sold (25,500)
variable selling expenses (16,500)
Contribution (2,500)
As the contribution is negative, we should discontinue Product B as is less expensevely to stop production than continue.
Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States?
Check all that apply.
A. The variety of goods available to consumers Funds spent by city governments to renovate their buildings
B. The loss of enjoyment people incur when scenic land is converted to commercial use
C. The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
D. When a U.S. company purchases and imports automotive parts from Canada to use to build cars within the United States, this purchase increases the component of GDP while also net exports by the same amount.
E. Therefore, the purchase of automotive parts from Canada causes in US GDP.
Answer
The answer and procedures of the exercise are attached in the image below.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Lisa sells business property with an adjusted basis of $237,800 to her son, Alfred, for its fair market value of $190,240.
If an amount is zero, enter "0".
a. What is Lisa's realized and recognized gain or loss?
b. What is Alfred's recognized gain or loss if he subsequently sells the property for $261,580? For $154,570?
Answer:
a. Lisa's realized and recognized gain or loss is unknown
b. Alfred's recognized gain of $71,340 if he subsequently sells the property for $261,580
Alfred's recognized loss of $35,670 if he subsequently sells the property for $154,570
Explanation:
a. We do not know the amount Lisa costed to buy this business property, thus can't define her gain or loss.
b. Alfred cost $190,240 to buy this property, the he will gain if sell higher or lost if sell lower.
The gain $71,2340 = selling price $261,580 - cost $190,240
The loss $35,670 = selling price $154,570 - cost $190,240
A static budget is appropriate in evaluating a manager's performance if
actual activity closely approximates the master budget activity.
actual activity is less than the master budget activity.
the company is a not-for-profit organization.
the company prepares reports on an annual basis.
Answer:
The correct answer is letter "A": actual activity closely approximates the master budget activity.
Explanation:
A static budget includes projected values of inputs and outputs conceived before a company period begins. It estimates revenue and expenditure over a particular period which keeps the same with changes in business activity. It is also a helpful tool that allows rating the manager's performance by checking if the goals set in the master budget are being accomplished or not.
Sensible Insurance Company collected a premium of $18,000 for a 1-year insurance policy on April 1. What amount should Sensible report as a current liability for Unearned Insurance Revenue at December 31?
Answer:
Current liability for 3 months will be $4500
Explanation:
We have given that
Sensible insurance company has collected a premium of $18000
We have given time = 1 year = 12 months
So the premium collected per month [tex]=\frac{$1800}{12}=$1500[/tex
Now, the company has collected the revenue on April 1 and now it is December 31
So number of months from April to December = 9
So total premium earned in 9 months = 9× $1500 = $13500
So current liability for 3 months will be = 3×$1500 = $4500
When Apple first introduced its iPhone in the U.S. market, it priced it at $600. Several months later, Apple reduced the price to $400. And several months after that, it reduced the price again to $200.
What pricing policy was Apple using in its initial price strategy?
A. introductory price
B. skimming price
C. cash discount price
D. penetration price
E. everyday low price
Answer:
B. skimming price
Explanation:
Skimming price -
It is the pricing method , which involves the company uses very high tag for a particular time as soon as it is launched in the market and as it time passes buy , the price of the particular product gets reduced , this process is known as skimming price .
This strategy helps to the product to stay in the market for long run , as time passes , the price of the particular commodity reduces and people can still buy it at a much lower price , in age where new products get launched daily .
Which of the following variables is/are not required input(s) for parsimonious multiyear forecasting? Select one:
A. Net operating asset turnover (NOAT)
B. Net operating profits margin (NOPM)
C. Sales growth
D. Net nonoperating obligations (NNO)
E. All of the above are required inputs
Option(D) For parsimonious multiyear forecasting, variables such as NOAT, NOPM, and Sales Growth are commonly used, whereas NNO might not be essential. Off-balance sheet activities also influence financial analysis but are not typically considered in this type of forecasting.
When considering parsimonious multiyear forecasting, not all variables are essential inputs. Specifically, variables such as Net Operating Asset Turnover (NOAT), Net Operating Profits Margin (NOPM), and Sales Growth tend to be critical as they directly relate to a company's operational efficiency and market performance.
However, Net Nonoperating Obligations (NNO), while important in broader financial analysis, may not be as crucial for a compact multiyear forecast focused on the core operations of the firm. Additionally, other factors like banking activities taking place off the balance sheet can affect a firm's financial outlook but are not typically included in a parsimonious forecasting model.
In each of the following scenarios, explain and categorize the cost of inflation.a) Because inflation has risen, the J.Crew clothing company decides to issue a new catalog monthly rather than quarterly.b) Grandpa buys an annuity for $100,000 from an insurance company, which promises to pay him $10,000 a year for the rest of his life. After buying it, he is surprised that high inflation triples the price level over the next few years.c) Maria lives in an economy with hyperinflation. Each day after being paid, she runs to the store as quickly as possible so she can spend her money before it loses value.d) Gita lives in an economy with an inflation rate of 10%. Over the past year, she earned a return of $50,000 on her million-dollar portfolio of stocks and bonds. Because her tax rate is 20%, she paid $10,000 to the government.e) Your father tells you that when he was your age, he worked for only $4 an hour. He suggests that you are lucky to have a job that pays $9 an hour.
Answer:
Consider the following explanation
Explanation:
a) J. Crew is issuing its catalogs monthly in response to inflation. This will incur cost and it is known as 'Menu Cost'.
b) Grandpa has bought annuity which has promised $10,000 a year for the rest of his life. However, higher than expected inflation means grandpa has lesser purchasing power. This is loss of purchasing power and also 'redistribution cost'. In higher inflation borrower tends to get benefit. Here insurance company is at the gain.
c) Maria is witnessing loss of purchasing power because of hyper inflation. In such scenario, cost keeps rising and product's price could be higher a few hours later. This was witnessed in Germany as well as in Zimbabwe. People run to the stores as soon as they get cash or salary. It is known as 'shoe leather cost'. People make frequent trips to banks or stores but do not keep cash in fear of losing value.
d) Gita actually earned only 5% on her portfolio but as her income is in taxable bracket so she has to pay 20% tax. Her income from portfolio not even compensated inflation. This is a redistribution cost and also known as fiscal drag. More people fall into bracket because higher nominal income but real income is neglected which makes people worse off.
e) Father thinks that son is earning far more than him but inflation over the period of time erodes purchasing power and it could be possible that current income might be lower, same or higher comparing to inflation data. However, if it is lower then it is obviously loss of purchasing power.
Final answer:
The provided scenarios illustrate various impacts of inflation, including increased operational costs for businesses, erosion of purchasing power, particularly for fixed-income investments, rapid loss of money value in hyperinflation, and the nuanced effects on nominal wages and investment returns.
Explanation:
In understanding the scenarios provided, we see different manifestations of the cost of inflation. Inflation impacts the economy and individuals in various ways, reflected in the following examples:
J.Crew's decision to issue a new catalog monthly rather than quarterly is an example of a business absorbing higher operational costs due to inflation. This scenario highlights the cost of menu changes, where businesses must update and communicate price changes more frequently due to rising inflation.
Grandpa's annuity losing purchasing power illustrates the inflation risk to fixed-income investors. Inflation erodes the real value of money over time, leaving recipients of fixed payments, like annuities, at a disadvantage as the cost of living increases.
Maria's rush to spend her money in a hyperinflation scenario reflects the loss of purchasing power. Hyperinflation causes money to lose value rapidly, compelling individuals to spend it quickly before prices rise further.
Gita's investment earnings show how inflation can impact investment returns. Even with a 5% return on her portfolio, after factoring in a 10% inflation rate and 20% tax, the real, post-tax return is negative, illustrating the inflation-tax interaction.
The comparison of wage rates over time, like the one between your father's and your wage, showcases inflation's impact on nominal wages. Even if nominal wages increase, the important measure is the purchasing power of these wages, which can be eroded by inflation.
These scenarios collectively demonstrate how inflation affects both the economy and individual financial situations in different contexts.
An employee starts the execution of an OLAP application that uses a lot of computational resources while executing. Normally, this application runs overnight when resources are not heavily used, but this time it is executed during prime work time. As a result, order-entry transactions are unable to be completed. This type of human error is termed __________.
(A) spoofing
(B) spamming
(C) spoofing
(D) denial of service
(E) hacking
Answer:
(D) denial of service
Explanation:
Denial of service -
It is a type of cyber - attack where offender tries to make the source of network or the machine unavailable for the user via disturbing the service of the of the internet .
The task of denial of service is done by flooding the machine or the source with many requests in a way to overload the system .
Hence , from the question , the example shown in the question is about denial of service .
In October, Glazier Inc. reports 42,000 actual direct labor hours, and it incurs $194,000 of manufacturing overhead costs. Standard hours allowed for the work done is 40,000 hours. Glazier’s predetermined overhead rate is $5.00 per direct labor hour.
Compute the total manufacturing overhead variance. Identify whether the variance is favorable or unfavorable? Total manufacturing overhead variance $
Final answer:
The total manufacturing overhead variance is $-16,000, which is unfavorable.
Explanation:
To compute the total manufacturing overhead variance, we need to calculate the difference between the actual manufacturing overhead costs and the standard manufacturing overhead costs allowed. The actual manufacturing overhead costs are given as $194,000, while the standard manufacturing overhead costs allowed is $5.00 per direct labor hour multiplied by 42,000 actual direct labor hours, which equals $210,000. The total manufacturing overhead variance is the difference between these two amounts:
Total manufacturing overhead variance = Actual manufacturing overhead costs - Standard manufacturing overhead costs allowed = $194,000 - $210,000 = -$16,000
The total manufacturing overhead variance is unfavorable because the actual manufacturing overhead costs are lower than the standard manufacturing overhead costs allowed.
The total manufacturing overhead variance is $6,000, and it is favorable.
Explanation and Calculation
To compute the total manufacturing overhead variance, we need to compare the actual manufacturing overhead costs incurred with the applied manufacturing overhead costs based on the standard hours allowed for the work done.
Given Data:
- Actual direct labor hours: 42,000 hours
- Actual manufacturing overhead costs: $194,000
- Standard hours allowed for the work done: 40,000 hours
- Predetermined overhead rate: $5.00 per direct labor hour
Step-by-Step Calculation:
1. Calculate the Applied Overhead:
The applied overhead is based on the standard hours allowed for the actual work done.
[tex]\[ \text{Applied Overhead} = \text{Standard Hours} \times \text{Predetermined Overhead Rate} \][/tex]
[tex]\[ \text{Applied Overhead} = 40,000 \, \text{hours} \times \$5.00 \, \text{per hour} = \$200,000 \][/tex]
2. Calculate the Total Overhead Variance:
The total overhead variance is the difference between the actual overhead costs incurred and the applied overhead.
[tex]\[ \text{Total Overhead Variance} = \text{Actual Overhead} - \text{Applied Overhead} \][/tex]
[tex]\[ \text{Total Overhead Variance} = \$194,000 - \$200,000 = -\$6,000 \][/tex]
Since the variance is negative, it indicates that the actual overhead costs were less than the applied overhead costs, meaning the variance is favorable.
Alex just graduated from college and is now in the market for a new car. He has saved up $4,000 for a down payment. He's deciding between a Super and a Duper. The Super is priced at $23,599, and the Duper is priced at $18,999. After agonizing over the decision, he decides to buy the Duper. He writes the dealership a check for $4,000 and takes out a loan for the remainder of the purchase price. Identify what role money plays in each of the following parts of the story. Hint: Select each role only once. Role of Money Medium of Exchange Unit of Account Store of Value Alex writes a check for $4,000. Alex can easily determine that the price of the Super is more than the price of the Duper. Alex has saved $4,000 in his checking account.
Answer:
1. Medium of exchange, 2. Unit of Account and 3. Store of value
Explanation:
Please see attachment
To identify what role money plays in each of the following parts of the story . Medium of exchange, Unit of Account and Store of value
What is Medium of Exchange ?
A medium of exchange is a device or system that acts as a middleman in transactions involving the exchange of goods between parties. A system must represent a standard of value in order to serve as a medium of exchange. All parties must concur to that norm as well.
1. Alex writes a check for $4,000: Medium of exchange
2. Alex can easily determine that the price of the super is more than Duper: Unit of Account
3. Alex has saved $4000 in his checking account: Store of value
Therefore, the correct answer for the problem is
1. Medium of exchange,
2. Unit of Account and
3. Store of value
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Suppose you and a classmate are playing a game where your classmate proposes a division of $1.00. Then, you either accept or reject the offer. If you accept, then you and the classmate get the proposed portions of the dollar. However, if you reject theoffer, then you and your classmate receive nothing.
Suppose your classmate offers you $0.12
What is your optimal strategy?
Your optimal strategy is to _________ the proposed division.
A. Accept
B. Reject
Now suppose instead that you propose the division of the dollar. Your classmate will then accept or reject your division. If the classmate accepts, then you each receive the portion of the dollar as you have proposed. However, if your classmate rejects, then you both get nothing.
Your optimal strategy is to offer your classmate $_______. (Enter a numeric response to two decimal places)
Answer:
Your optimal strategy is to accept the proposed division.Your optimal strategy is to offer your classmate $ 0.49.Explanation:
An optimarl strategy is one that maximizes a player’s expected payoff. In this case this is a cooperative game.
If actual output exceeds potential output, the economy
A. is in neither a short-run nor long-run equilibrium.
B. is experiencing a recessionary gap.
C. may be in a long-run equilibrium but is not in a short-run equilibrium.
D. is experiencing an inflationary gap.
Answer:
D. Is experiencing an inflationary gap.
Explanation:
The potential output is the highest level of gross domestic product that can be sustained in the long term using full employment. If the actual output exceeds the potential output, then the output gap (the difference between the actual and the potential output) is positive, which means that the gross domestic product exceeds the trend. This implies that there will be inflationary pressures if we try to keep the gross domestic product in the new actual output level, since there would need to be an overtime employment of the workforce and all the resources would be fully used, so any expansion above that level would imply pressures on the economy.
Scenario: You are 30 years old and single. You have a moderate risk investment philosophy. You are interested in long-term investing, but you do not have sufficient funds to buy a variety of investments to be fully diversified and you do not feel you have the expertise to make good choices. Among the features that facilitate making investments in a mutual fund are: Check all that apply O Any interest, dividends, and capital gains can be automatically reinvested O As your objectives change, you can easily swap shares for another mutual fund within a mutual fund family ? A mutual fund investment can be inherited by a designated beneficiary without the need to go through probate O A check-writing feature The best mutual funds in which to invest are usually O no-load funds O front-load funds O back-end load funds A $2,000 investment in a mutual fund with a 8% front-end load will allow you to make a net investment of $2,160 $1,840 $1,680 You should review and rebalance your mutual fund investment never; the fund is rebalanced for you monthly annually quarterly A fund named "Fidelity Freedom Fund 2030 is a target-date fund designed O to automatically shift assets from moderate to aggressive as retirement age approaches O for someone retiring in 20 to 30 years. O to provide a no-hassle, set-it-and-forget-it approach to investing for retirement. O for someone between the ages of 20 and 30
Answer:
Check the following explanation
Explanation:
Features that facilitiate making investment in mutual funds are as follows:
Any interest, dividends and capital gains can be automatically reinvested.
As your objective change, you can easily swap shares of another mutual funds withing a mutual fund family.
A mutual fund can be inherited by a designated beneficiary without the need to be checked.
Answer - the best mutual funds to invest are usually
No load funds.
In no load funds the investor need not pay any amount in the form of commission or other charges while purchasing or selling the investments.
Answer- If we invest $2000 in a front end load with 8% interest rate then we will earn $1840 as $160( $2000 x 8%) will get deducted from the purchase amount and eventually reducing the investment size.
Answer- we should review and rebalance your mutual funds annually as if we do it too frequently it kight involve some costs and thus would turn out to be less profitable.
Answer- It shifts assets from moderate to more risky as the retirement age approaches because it will help in increasing the income of the investor when he retires as at retirement he or she might start withdrawing his or her money.
You own a portfolio of two stocks, A and B. Stock A is valued at $6,500 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. What is the expected return on the portfolio if the portfolio value is $9,500?
Answer:
he expected return on the portfolio =10.22%
Explanation:
You obviously want to know the expected return of your portfolio. Its projected performance and the overall profit or loss. Anticipated yield is just that it is not guaranteed, as it is based on historic returns and used to generate prospects, but it is not a prediction. Please refer to the formula for “The expected return on the portfolio”
The expected return on the portfolio = 11.2%*6500/9500 + 8.1 %*( 9500-6500)/9500 = 10.22%
A firm produces a product in a competitive industry and has a total cost function (TC) of TC(q) = 60 + 10q + 2q2 and a marginal cost function (MC) of MC(q) = 10 + 4q. At the given market price (P) of $20, the firm is producing 5.00 units of output Is the firm maximizing profit? No What quantity of output should the firm produce in the long run? The firm should produce 5unit(s) of output. (Enter your response as an integer.)
Answer:
Please see attachment
Explanation:
Please see attachment
For a variety of reasons, a bank sometimes will hold more reserves than is legally required. These reserves are known as excess reserves. How does holding excess reserves affect the money supply? Choose one:
(A) The money supply will increase as banks loan out more money.
(B) The money supply will increase as banks hold more vault cash.
(C) The money supply will increase as a bank’s vault cash falls.
(D) The money supply will decrease as banks loan out less money.
(E) There is no impact. The level of deposits and loans will be unaffected.
Option D , The money supply will decrease as banks loan out less money.
Explanation:
Banks are lending their deposits and increasing the economic supply of money. Nevertheless, if the bank holds more money and invests less then the supply of money into the economy rises.
Conversely, the ratio increased, boosted, lowered the cash multiplier, and decreased the supply of money. Expansionary fiscal policy is the decrease in the necessary reserve ratio; contraction monetary policy is the rise in the reserve ratio.
When attempting to control the monetary supply, the Fed has two challenges. Firstly, the Federal does not regulate the amount of cash families want to keep in their accounts as deposits. The second problem seems to be that the banks ' capital is not verified by the Fed. If the banks opt for more excess reserves and deposits, the sum of money will be lower.
Excess reserves held by a bank decrease the money supply because this money is not being loaned out to stimulate economic activity. Therefore, the money supply will decrease as banks loan out less money.
Explanation:When a bank holds excess reserves, it means it is retaining more money than it is legally obligated to. This action directly impacts the money supply in the economy. The correct answer is (D) The money supply will decrease as banks loan out less money.
Here's why: Banks loan out their reserves to borrowers, and these loans enter the economy as new money, which increases the money supply. When banks hold back some of their reserves, they reduce the amount of loans they can make, which in effect decreases the potential money supply. Instead of being used for loans that could stimulate economic activity, these funds are being held back, thus effectively reducing the total money supply.
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Hello Please help me with the following
Johnson Corporation began 2016 with inventory of 17,000 units of its only product. The units cost $9 each. The company uses a periodic inventory system and the LIFO cost method. The following transactions occurred during 2016:
a.
Purchased 85,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b. shipping point and freight charges of $0.40 per unit were paid by Johnson.
Answer:
You didn´t post the complete information of the exercise, I searched the exercise online and tried to ask the most useful question.
Explanation:
Determination of the cost of the ending inventory (LIFO cost method):
Beginning inventory (17,000 x$9) $153,000
Add: Purchases
Purchases (85,000 x$10) $850,000
Less: Returns (1,700 x $10.40) -$17,680
Less: Discount [2% of $10 x (85,000 -1,700)] -$16,660
Add: Freight-in (85,000 x $0.40) $34,000 $849,660
Cost of goods available for sale (17,000 + 83,300) $1,002,660
Less: Ending inventory $186,660
Cost of Goods Sold $816,000
Note: The 5,700 units purchased on December 28, 2016 were not included as the shipment (FOB destination) did not reach the warehouse before December 31, 2016.
Determination of the ending inventory:
Date of purchase units unit cost Total Cost
Beginning inventory 17,000 $9 $153,000
2016 Purchases 3,300 $10.20 $33,660
Total 20,300 --- $186,660
Note:
Inventory available for sale 17,000 + 83,300 =100,300
Sales for the year 80,000 units
Ending inventory in units 20,300
Unit cost of purchases is determined as follows,
$10 less 2% discount + freight-in charges of $0.40
98% of $10 + $0.40 = $9.80 + $0.40 =$10.20
Requirement 2
Sales (80,000 x $18) $1,440,000
Less: Cost of goods sold $816,000
Gross profit $624,000
Less: Other operating expenses $164,000
Income before income taxes $460,000
Hence, income before income taxes for 2016 is $460,000
Edwards Enterprises follows a moderate current asset investment policy, but it is now considering a change, perhaps to a restricted or maybe to a relaxed policy. The firm's annual sales are $400,000; its fixed assets are $100,000; its target capital structure calls for 50% debt and 50% equity; its EBIT is $39,000; the interest rate on its debt is 10%; and its tax rate is 40%. With a restricted policy, current assets will be 15% of sales, while under a relaxed policy they will be 25% of sales. What is the difference in the projected ROEs between the restricted and relaxed policies?
Answer:
Please see attachment
Explanation:
Please see attachment
Sunland Company has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2022. No dividends were declared in 2020 or 2021. If Sunland wants to pay $395,000 of dividends in 2022, what amount of dividends will common stockholders receive?
Answer:
The amount of dividends received by common stockholders is $155,000
Explanation:
The dividends to preferred shareholders is computed as:
Dividends to preferred shareholders = Shares × Price per share × 8% × Number of years
where
Shares are 10,000
Price per share is $100
Number of years is 3 (2020,2021 and 2022)
Putting the values above:
= 10,000 × $100 × 8% × 3
= $80,000 × 3
= $240,000
Now,
The amount of dividends received by common stockholders is computed as:
Amount = Dividends to be paid in year 2022 -Dividends to preferred shareholders
$395,000 - $240,000
= $155,000
The payment given by a corporation to its shareholders who are entitled to it is known as dividends. The board of directors (BODs) of a firm decides on dividend quantities and distributions.
[tex]\text{The amount of dividends received by common stockholders is} =[/tex] $[tex]155,000[/tex]
[tex]\text{The dividends to preferred shareholders is computed as:}[/tex]
[tex]\text{Dividends to preferred shareholders = Shares}[/tex] × [tex]\text{Price per share}[/tex] × [tex]8[/tex]% × [tex]\text{Number of years}[/tex]
[tex]\text{Where,}[/tex]
[tex]\text{Shares} = 10,000[/tex]
[tex]\text{Price per share} = $100[/tex]
[tex]\text{Number of years} = 3[/tex]
[tex]\text{ Substituting the values to the formula:}[/tex]
[tex]= 10,000[/tex] × [tex]100[/tex] × [tex]8[/tex]%
[tex]= 80,000[/tex] × [tex]3[/tex]
[tex]= 240,000[/tex]
[tex]\text{Now,}\\\\\text{The amount of dividends received by common stockholders is computed as:}[/tex]
[tex]\text{Amount} = 395,000 - 240,000\\\\\text{Amount = 155,000}[/tex]
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Indicate whether each of the following is an example of an automatic stabilizer or discretionary fiscal policy. The government increases the top income tax bracket to 35%. The tax rate paid by an individual falls from 20% to 15% when his pay is reduced during a recession. A person qualifies for unemployment compensation when she loses her job during a recession.
Answer:1.. Discretionary fiscal policy.
2. Automatic stabilizer
3. Automatic stabilizer
Explanation:
An automatic stabilizer are in built economy policy that are already in existence to tackle economy issues as it relates to recession and expansion in the economy.
An increase in tax rate is a new directive taken to curtailed expansionary drive in the economy after his occurence.
A fall in tax rate from 20 to 15 during recession is the already existing progressive tax rate that takes more tax during expansion and less during recession.
The unemployment compensation is also an inbuilt policy to tackle a recession issue.
Checkable deposits are money because
A. checks bounce when there are not enough funds to cash them.
B. they are guaranteed by banks.
C. only banks and other financial institutions can offer them.
D. they are protected by the Federal Reserve.
E. they can be converted into currency on demand and are used directly as a means of payment.
Checkable deposits are considered money because they can be converted into currency on demand and are used directly as a means of payment. Although some options mention aspects of checkable deposits, they do not describe why they are perceived as money.
Explanation:Checkable deposits are considered money because they can be converted into currency on demand and are used directly as a means of payment. This is option E from your choices. Checkable deposits are also known as demand deposits or transactional deposits. A distinguishing feature of a checkable deposit is that it allows for frequent transactions, including deposits, withdrawals, and transfers. These transactions can be carried out either through the use of checks, automated teller machines (ATMs), electronic debits, and other payment systems. This makes checkable deposits a highly liquid form of money.
Although options A to D say something about the nature and security attached to checkable deposits, these options do not explain why checkable deposits are money. For instance, the fact that banks guarantee deposits or that the Federal Reserve protects deposits does not make these deposits money. What makes them money is their liquidity and functionality as a method of payment.
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Last year, Kurt invested $1,000 in ABC stock, $1,000 in long-term government bonds, and $1,000 in U.S. Treasury bills. Over the course of the year, he earned returns of 10.3 percent, 8.8 percent, and 4.3 percent, respectively. What is the risk premium that Kurt received on his ABC stock investment?
Answer:
6%
Explanation:
Loaded-Up Fund charges a 12b-1 fee of 1.0% and maintains an expense ratio of 0.75%. Economy Fund charges a front-end load of 2% but has no 12b-1 fee and an expense ratio of 0.25%. Assume the rate of return on both funds’ portfolios (before any fees) is 6% per year. How much will an investment of $1,000 in each fund grow to after: (Round your answers to 2 decimal places.)
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
The question requires a comparison of the future values of investments in two mutual funds with different fee structures, considering a 6% annual return rate and subtracting the respective fees to find the growth of a $1,000 investment.
Explanation:
The question is about calculating the future value of investments in two mutual funds with different fees. Loaded-Up Fund charges a 12b-1 fee of 1.0% and has an expense ratio of 0.75%, while Economy Fund charges a front-end load of 2% and has an expense ratio of 0.25%. Both funds yield a 6% annual return before fees. To determine the future value of a $1,000 investment in each, we will subtract the respective fees from the annual return rate and then apply the adjusted rate to the initial investment to find the potential growth over time.
A machine with a cost of $144,000, current year depreciation expense of $20,500 and accumulated depreciation of $92,000 is sold for $45,600 cash. The total amount that should be reported in the operating section of the statement of cash flow in, indirect method is: a. $20,500. b. $4,560. c. $66,100. d. $18,900. e. $26,900.
Answer:
a. $20,500
Explanation:
The cashflow using the indirect method has basically 3 segments namely; Cashflow from operating activities, Cashflow from investing activities and Cashflow from financing activities.
Cashflow from operating activities considers the net profit before tax and then adjustments for non cash items like depreciation. Hence from the question given, the current year depreciation ($20,500) is a part of the Cashflow from operating activities.
Other cost elements stated in the question are considered under investing activities.