Answer:
a. The return predicted by CAPM for a portfolio with a beta of 1.4 is 11.88%
b. The alpha of portfolio A is -3.68%
Explanation:
The formula for computing the return by Capital Assets Pricing Method (CAPM) model.
Expected return = Risk Free rate + (Beta × Market Risk Premium)
where,
Market risk premium = market return - risk free rate
Now, putting the values in the above equation
a. Expected return = 0.06 + 1.4 × (0.102 - 0.06)
= 0.06 + 1.4 × 0.042
= 0.06 + 0.0588
= 0.1188
= 11.88 %
Thus, the return predicted by CAPM for a portfolio with a beta of 1.4 is 11.88%.
b. The alpha should be = Portfolio expected return - expected return
= 8.20 - 11.88 %
= -3.68%
Thus, the alpha of portfolio A is -3.68%
Using the Capital Asset Pricing Model (CAPM), the expected return on portfolio A, which has a beta of 1.4, is 10.08%. The alpha of portfolio A is -1.88, indicating that it has underperformed the market given its level of risk.
Explanation:The Capital Asset Pricing Model (CAPM) is a formula used in the finance industry to calculate the expected return on an investment given its risk-free rate, beta and the expected market return.
a. The expected return on portfolio A, which has a beta of 1.4, can be calculated as follows:
Return = Risk-free rate + Beta * (Market Return - Risk-free rate)
Applying the given values,
Return = 6 + 1.4 * (10.2 - 6) = 10.08%.
b. The alpha of portfolio A is the difference between the actual return and the expected return calculated through CAPM. In this case, the actual return is 8.2%. Therefore, Alpha = Actual return - CAPM return = 8.2 - 10.08 = -1.88. A negative alpha means the investment has underperformed the market given its level of risk.
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Alpha Company provided the following data concerning its income statement: sales, $850,000; purchases, $368,000; beginning inventory, $255,000; ending inventory, $282,000; operating expenses, $105,000; freight-in, $5,000; sales discounts, $17,000; purchases discounts, $15,000; sales returns & allowances, $107,000; and purchases returns & allowances, $41,000. The data are complete and provide the basis for preparation of an income statement. How much is net income?
Answer:
NET INCOME: 341,000
Explanation:
Inventory equation:
beginning inventory + purchase = COGS + ending inventory
base on your information we need to get the net purchases and COGS so:
purchases 368,000
freight-in 5,000
return and allowance -41,000
purchase discount -15,000
net purchases 307,000
Now we replace in the inventory equation with the know values
255,000 + 307,000 = COGS + 282,000
and we solve for COGS
COGS = 280,000
Now we have to determinate the net sales:
sales 850,000
sales discount -17,000
return&llowances -107,000
net sales 726,000
Finally we proceed with the net income statment
net sales 726,000
COGS -280,000
Gross Profit 446,000
operating expenses -105,000
Net Income 341,000Schuepfer Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,800 units are planned to be sold in March. The variable selling and administrative expense is $4.30 per unit. The budgeted fixed selling and administrative expense is $35,620 per month, which includes depreciation of $2,700 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:
Answer:
The cash disbursements for S&A should be: $40,660
Explanation:
Assuming all variable cost are paid in cash
[tex]1,800 \: units \times 4.30 \: variable \: S&A = 7,740[/tex]
35,620 fixed S&A
- 2,700 depreciation (non-monetary)
32,920 Cash disbursement for fixed cost
[tex]fixed \: disbursements + variable \: disbursements = total[/tex]
32,920 + 7,740= 40,660
The cash disbursements for selling and administrative expenses on the March budget should be $40,660.
Explanation:To calculate the cash disbursements for selling and administrative expenses on the March budget, we need to calculate the total fixed selling and administrative expense, which includes depreciation. Then, we calculate the total variable selling and administrative expense by multiplying the variable cost per unit by the number of units planned to be sold in March. Finally, we add the fixed and variable expenses to find the total cash disbursements for selling and administrative expenses.
Fixed selling and administrative expense: $35,620 - $2,700 (depreciation) = $32,920 per month
Variable selling and administrative expense: $4.30 per unit × 1,800 units = $7,740
Total cash disbursements for selling and administrative expenses: $32,920 + $7,740 = $40,660
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The Holmes Company's currently outstanding bonds have an 8% coupon and a 10% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If the marginal tax rate is 40%, what is Holmes' after-tax cost of debt?
Final answer:
The Holmes Company's after-tax cost of debt is 6%, calculated from a 10% yield to maturity on their bonds, adjusted for a 40% marginal tax rate.
Explanation:
The Holmes Company's after-tax cost of debt is calculated based on the yield to maturity of its currently outstanding bonds. Since the bonds have a 10% yield to maturity, which Holmes believes could be issued at par for new bonds, this is the pre-tax cost of debt. Factoring in the marginal tax rate of 40%, the after-tax cost of debt would be the yield to maturity multiplied by (1 - tax rate), which equates to 10% * (1 - 0.40) = 6%. Therefore, the after-tax cost of debt for Holmes Company would be 6%.
Barry’s BarBQue incurred the following costs: $1,400 for ribs, 45 hours of labor to cook the ribs at $10 per hour, $50 for seasoning and sauce, $300 for signs to advertise the ribs, $150 to clean the grill after cooking the ribs, and $100 of administrative costs. How much are total product costs? $2,050 $1,850 $2,150 $2,350
Answer:
The total product costs is $2,050
Explanation:
Given cost:
Ribs cost = $1,400
Labor cost = 45 hours × $10 per hour = $450
Seasoning and Sauce cost = $50
Advertising = $300
Grill cost = $150
Administrative cost = $100
By using these cost, we can easily compute the total product cost.
The product cost is that which is attached to the product. It can be direct material, direct labor, etc.
So product cost = Rib cost + Labor cost + Seasoning and Sauce cost + Grill cost
= $1,400 + $450 + $50 + $150
= $2,050
Other cost is not considered because they are related to general & administrative cost, selling cost which termed as period costs.
So, the total product costs is $2,050
Total product costs for Barry's BarBQue are calculated by adding the costs of ribs, labor, seasoning, and sauce, and the cleaning of the grill which totals to $2,050. The correct option is a.
Explanation:The student's question pertains to the calculation of the total product costs for Barry's BarBQue. To determine total product costs, one should sum the costs that are directly associated with the production of the goods, which includes material, labor, and overhead expenses. In this case, the calculation would be as follows:
Cost of ribs: $1,400Labor (45 hours at $10 per hour): $450Seasoning and sauce: $50Cleaning the grill: $150While administrative costs and advertising signs are also expenses for the business, they are not typically considered product costs. Product costs include only those costs that are directly tied to the creation of the product itself.
Thus, the total product costs are:
$1,400 (ribs) + $450 (labor) + $50 (seasoning and sauce) + $150 (cleaning) = $2,050
Quantum Technology had $664,000 of retained earnings on December 31, 20X2. The company paid common dividends of $31,300 in 20X2 and had retained earnings of $588,000 on December 31, 20X1. a. How much did Quantum Technology earn during 20X2?
Answer:
Net Loss 107,300
Explanation:
[tex]$$Beginning Retained Earnings$$$+/- Net Income/Loss$$$- Dividends$$$Equals Ending Retained Earning[/tex]
We post the values given in the assingment and then we solve for the missing part.
664,000 Beginning Retained Earnings
+/- Net Income/Loss
- 31,300 Dividends
Equals to 588,000 Ending Retained Earnings
588,000 - 664,000 - 31,300 = Result from the period
Net Loss 107,300
Cost Behavior Prepare income statement in two formats Farnsworth Drycleaners has capacity to clean up to 7,500 garments per month. The following operating data is available for Farnsworth. Amount charged per garment for dry cleaning $10.00 Variable cost per garment $0.70 Fixed costs per month $14,400. Requirements: 1- Using the traditional format, prepare Farnsworth’s projected income statement for July assuming 4,260 garments are cleaned during the month. a. Check your spelling carefully and do not abbreviate. b. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values to be subtracted.
2- Using the contribution margin format, prepare Farnsworth’s projected income statement for July assuming 4,260 garments are cleaned during the month. a. Check your spelling carefully and do not abbreviate. b. Enter all amounts as positive values. Do not use a minus sign or parentheses for any values to be subtracted.
Answer:
(1)
Fees revenues 42,600
Total expenses 1.92 x 4260 = 8179.2
Net income 34,420.8
(2)
Fees revenues 42,600
Variable cost 2,982
Contribution Margin 39,618
Fixed Cost 14,400
Net Income 25,218
Explanation:
(1)
We multiply by the garment cleaned
10 x 4,260 = 42,600
0.7 x 4,260 = 2982
and distribute the fixed cost among the normal capacity
14,400 / 7,500 = 1.92 fixed cost per garment cleaned
.7 + 1.92 = 2.62 cost per garment
(2)
We do not include the fixed cost in the unit cost, we subtact them completely as an expense.
Farnsworth Drycleaners' projected income statement for July can be prepared in both traditional format and contribution margin format.
Explanation:In order to prepare Farnsworth Drycleaners' income statements, we will use both the traditional format and the contribution margin format.
Traditional Format:First, we calculate the total revenue by multiplying the number of garments cleaned (4,260) by the amount charged per garment ($10.00). This gives us $42,600.
Next, we calculate the total variable costs by multiplying the number of garments cleaned (4,260) by the variable cost per garment ($0.70). This gives us $2,982.
The fixed costs per month are given as $14,400.
Finally, we can calculate the net income by subtracting the total variable costs and fixed costs from the total revenue.
Contribution Margin Format:In the contribution margin format, we subtract the total variable costs from the total revenue to find the contribution margin. This gives us $39,618.
Then, we subtract the fixed costs to find the net income. This gives us $25,218.
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One of the goals you have set for your company is "to expand our product line." This statement is
A. a valuable addition to your mission statement. B. a slow-growth option. C. not clear and not measurable. D. a short-term goal 9.
Answer:
One of the goals you have set for your company is "to expand our product line." This statement is not clear and not measurable.- C.
In this question, it's asking which answer choice best describes the statement "to expand our product line" for a goal in a business.
The question is pretty much asking if the goal is good enough or is something that could be useful in a business.
Answer: C). Not clear and not measurableThe best answer choice in this case would be "C). Not clear and not measurable" because the goal "to expand our product line" is very vague.
The statement is very unclear, due to the fact that people wouldn't understand what specifically the business is talking about in their product line.
When people read "to expand our product line," people don't know what products the business is producing and how much is the business going to expand the product line. That's what makes this statement vague. We don't know how much the business wants to expand their product line. Add 1 more product to the product line? Add two more products to the product line? That's the question that the statement is leading people to.
We also can't measure the business process with the statement, due to the fact that we don't know how much we're going to measure to. This is also another reason why this statement is vague or unclear.
I hope this helps you outGood luck on your academicsHave a great day!On January 1, JKR Shop had $225,000 of inventory at cost. In the first quarter of the year, it purchased $795,000 of merchandise, returned $11,550, and paid freight charges of $18,800 on purchased merchandise, terms FOB shipping point. The company’s gross profit averages 30%, and the store had $1,000,000 of net sales (at retail) in the first quarter of the year. Use the gross profit method to estimate its cost of inventory at the end of the first quarter.
Answer:
The estimated cost of inventory at the end of the first quarter is $327,250.
Explanation:
Gross profit : The gross profit represents the difference between sale price and purchase price.
The gross profit margin shows the ratio between gross profit and sales.
The calculation of cost of ending inventory is shown below:
First we have to calculate the cost of good sold.
Cost of goods sold = Beginning Merchandise inventory + Purchase of merchandise inventory - Returned Merchandise inventory + Freight charges
= $225,000 + $795,000 - $11,550 + $18,800
= $1,027,250
Now, we have to calculate the approximate cost of goods sold.
Since gross profit is 30% and net sales is $1,000,000
And, The Gross profit = Sales - cost of goods sold
So the Approximate cost of good sold = Net sales × (1 - 30%)
= $1,000,000 × 70%
= $700,000
Here 70% is the cost of goods sold percentage and 1 here denotes sales.
After considering these amounts, the ending inventory would be
= Cost of goods sold - Approximate cost of goods sold
= $1,027,250 - $700,000
= $327,250
Hence, the estimated cost of inventory at the end of the first quarter is $327,250.
You are an owner of a bakery, and you meet with other neighborhood bakery owners. Consider that fresh baked goods and processed baked goods are substitutes. In an attempt to increase sales, you collectively decide to lower prices of fresh baked goods by 10%. Which of the following are consequences of this price change? Choose one or more: A. The supply of fresh baked goods will increase. B. The quantity supplied of fresh baked goods will decrease. C. The supply of fresh baked goods will decrease. D. Demand for processed baked goods will decrease. E. The demand for fresh baked goods will not change. F. The demand for fresh baked goods will increase. 1st attempt
Based on the available options the most likely consequences of lowering prices of fresh baked goods by 10% are options D. and F.
The consequences of lowering prices of fresh baked goods by 10% can be analyzed as follows:
A. The supply of fresh baked goods will increase: This is not necessarily true. Lowering prices may encourage bakery owners to produce and supply more fresh baked goods to meet the increased demand, but it relies on the particular conditions and the elasticity of supply.
B. The quantity supplied of fresh baked goods will decrease: This is unlikely to happen if the price reduction is aimed at increasing sales. Lower prices generally motivate suppliers to increase the quantity supplied.
C. The supply of fresh baked goods will decrease: This is not likely to occur as a result of reducing prices. Lower prices typically lead to an increase in supply, not a reduction.
D. Demand for processed baked goods will decrease: This is possible. If fresh baked goods become more inexpensive due to the price reduction, consumers may switch from processed baked goods to fresh ones, leading to a reduction in demand for processed baked goods.
E. The demand for fresh baked goods will not change: This is unlikely. Lowering prices generally stimulates demand, as it makes the product more desirable and affordable to consumers.
F. The demand for fresh baked goods will increase: This is a possible consequence. Lowering prices can lead to a boost in demand for fresh baked goods, as it makes them more appealing and available to consumers.
Based on the given options, the most likely consequences of lowering prices of fresh baked goods by 10% are D. Demand for processed baked goods will decrease, and F. The demand for fresh baked goods will increase.
If there is capital flight from the United States, then the demand for loanable funds a. shifts left while the supply of dollars in the foreign-exchange market shifts right. b. and the supply of dollars in the foreign-exchange market shift left. c. shifts right while the supply of dollars in the foreign-exchange market shifts left. d. and the supply of dollars in the foreign-exchange market shift right.
Answer: Option (c) is correct.
Explanation:
If a country is suffers from capital flight, then the demand for loanable funds shifts rightwards while the supply of dollars in the foreign exchange market shifts leftwards.
Capital flight means that there is a outflow of capital from United States to other countries. This will results in lower interest rate, as a result loans become cheaper. So, it will become affordable for the individuals to take loans for their needs.
Hence, the demand for loanable funds increases at a lower interest rate and supply of US dollar also shifts leftwards.
Martha was promised a 10% raise if she wins a contract with the city government. Martha could use the money to pay off some debts. However, she happens to know that another company already has informally won the contract. There is a very slim chance that she could win the contract away from the other organization, but she does not believe she can do it. According to expectancy theory, Martha is unmotivated to try to win the contract because she lacks __________.
Answer:
The answer is expectancy.
Explanation:
Expectancy theory is a concept developed by Victor H. Vroom in 1964, where he postulated, that the strength an individual has in terms of his or her motivation to do an action, would appear when three components are satisfied to a certain value: expectancy, instrumentality, and valence. The question above is relevant to the expectancy component, which is detailed as the belief that an individual has regarding their efforts would result in the individual choosing to perform an action. In the case of Martha, she wasn’t sure that her efforts in trying to win the contract would lead to her 10% raise (outcome, a component of instrumentality), and thus, she decided not to try.
Martha lacks 'expectancy' according to expectancy theory. This means that she does not believe her efforts will lead to a successful outcome, therefore decreasing her motivation to try. Other theories also suggest that motivation could be influenced by belief in personal ability, a need for financial stability, and other interpersonal and personal affairs.
Explanation:According to expectancy theory, Martha is unmotivated to try to win the contract because she lacks expectancy. Expectancy is an individual's belief in their ability to succeed in a specific task, in this case, Martha winning the contract. Martha's lack of belief in her ability to win the contract diminishes her motivation to try, as she does not believe her efforts will result in a favourable outcome. This aligns with the self-efficacy theory proposed by Albert Bandura, where an individual's belief in their own capabilities plays a pivotal role in motivating behavior.
Furthermore, Martha's situation could also be observed through Maslow's Hierarchy of Needs. The promise of a raise (a physiological need) could motivate her to strive harder. However, due to her limited expectancy, the incentive may not be effective. Similarly, the Efficiency Wage Theory suggests that workers' productivity (or in this case, effort) depends on their pay. Yet, if the potential pay increase does not seem achievable, it may fail to motivate the worker.
There are other factors that can motivate people beyond the financial benefit, such as the sense of accomplishment, positive interactions with others, forming deep relationships, asserts of dominance, and enjoying what they do. But ultimately, one's expectancy to achieve the goal is critical to motivation.
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Phil Phoenix is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,138. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,516.27. What is the amount of the employer's annual payroll taxes expenses for this employee?
Answer:
the amount of employers annual payroll taxes expenses for his employee is $1133.06
Explanation:
For calculating the employers payroll taxes expenses for his employee , we will add the amount that he has to pay for in social security tax, medicare tax and Federal unemployment tax act and State unemployment tax act tax.
EMPLOYERS PAYROLL TAX =
Social security tax + Medicare tax + FUTA tax + SUTA tax
An important point to understand here is that the social security tax and medicare tax would be calculated on the income earned by Phil in month of January and the FUTA(federal unemployment tax act) and SUTA(state unemployment tax act) taxes would be calculated on the first $7000 of Phil as it is given in the question that the unemployment taxes are calculated on first $7000 of employee.
= $9138 x 6.2% + $9138 x 1.45% + $7000 x .08% + $7000 x 5.4%
= $566.556 + $132.501 + $56 + $378
= $1133.057
= $1133.06 (approximate)
Jim's Gymnastics Training's operations for the month of October are summarized as follows: • Provided $5,000 of training to students. • Received $8,000 cash from students—of which $4,000 is for training provided in October (as billed above), $1,000 is for training to be provided in November, and $3,000 is for training provided in September. • Paid September's gym rental bill of $1,000. Received October's bill of $1,500, but did not pay.Prepare a journal entry.
Answer: These transactions can be journalised as follows :-
Explanation:
1. Receivables A/C Dr. 5000
To revenue A/C 5000
( Being paid for training of students)
2a. Cash A/C Dr. 4000
To Receivables A/C 4000
(Being 4000 provided in october)
2b. Cash A/C Dr. 1000
To Receivables A/C 1000
(Being 1000 recieved for training)
2c. Cash A/C Dr. 3000
To Receivables A/C 3000
(Being 3000 recieved for training)
3a. Accounts payable A/C Dr. 1000
To cash A/C 1000
(Being 1000 provided for rental bill of september)
3b. Rental expense A/C Dr. 1500
To accounts payable A/C 1500
(Being 1500 provided for rent bill in october)
The journal entries for Jim's Gymnastics Training for the month of October involve recording revenues, cash received, deferred revenues, and the gym rental expense.
Explanation:This question involves basic accounting principles and preparing journal entries. Journal entries are the first step in the accounting cycle and are used to record all business transactions and events in the accounting system.
For Jim's Gymnastics Training, you'd prepare the following journal entries for October:
Debit Accounts Receivable $5,000 and credit Service Revenue $5,000. This is for the training provided to students which is yet to be paid for.Debit Cash $8,000. Of this, credit Deferred Revenue $1,000 (for the training to be provided in November), credit Service Revenue $4,000 (for the training provided in October and now paid for) and credit Accounts Receivable $3,000 (payment for the training provided in September).Debit Rent Expense $1,500 and credit Accounts Payable $1,500 for the October rent bill that is not yet paid. Also, as September's gym rental has been paid, no journal entry is required for it in October's books.Learn more about Accounting Journal Entries here:https://brainly.com/question/28044739
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A small copy center uses 4 590-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of 4 boxes per week and a standard deviation of .50 boxes per week. 2 weeks are required to fill an order for letterhead stationery. Ordering cost is $5, and annual holding cost is 37 cents per box. Determine the economic order quantity, assuming a 52-week year.
Answer: The Economic order quantity(EOQ) is 74 boxes.
Explanation:
Given weekly demand (d)= 4 boxes
Annual demand (D) = 4[tex]\times[/tex]52 = 208 boxes
Ordering cost S = $5
Holding cost H = $0.347
Standard deviation ([tex]\sigma[/tex]) = 0.50
Lead time (L) = 2 weeks
∴ Economic order quantity (EOQ) Q is as follow :
Q = [tex]\sqrt{\frac{2\times D \times S}{H} }[/tex]
Q = [tex]\sqrt{\frac{2\times 208 \times 5}{0.347} }[/tex]
Q = 77.42 or 74
The Economic order quantity(EOQ) is 74 boxes.
Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2018, the balance in the Investment in Lindman account is $348,000. Amortization associated with this acquisition is $16,900 per year. In 2018, Lindman earns an income of $98,000 and declares cash dividends of $49,000. Previously, in 2017, Lindman had sold inventory costing $29,400 to Matthew for $42,000. Matthew consumed all but 25 percent of this merchandise during 2017 and used the rest during 2018. Lindman sold additional inventory costing $46,200 to Matthew for $70,000 in 2018. Matthew did not consume 40 percent of these 2018 purchases from Lindman until 2019. What amount of equity method income would Matthew recognize in 2018 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2018?
Answer:
$326186
Explanation:
Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2018, the balance in the Investment in Lindman account is $348,000. Amortization associated with this acquisition is $16,900 per year. In 2018, Lindman earns an income of $98,000 and declares cash dividends of $49,000. Previously, in 2017, Lindman had sold inventory costing $29,400 to Matthew for $42,000. Matthew consumed all but 25 percent of this merchandise during 2017 and used the rest during 2018. Lindman sold additional inventory costing $46,200 to Matthew for $70,000 in 2018. Matthew did not consume 40 percent of these 2018 purchases from Lindman until 2019. What amount of equity method income would Matthew recognize in 2018 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2018?
Let's use equity method
The Proportionate share of his investment in 2018 is:
Share % x (Net Income - acquisition amortization +/- upstream profits +/- downstream profits)
30% x (98,000 - 16,900 + No upstream from 2017 as it was sold by end of 2018 + (40% x (70,000 - 46,200)) + No downstream profits
30% x (81,100 + 9520)
30% x 90620
$27186
Equity Balance is:
Cost of investment + Proportionate share of Investment - Dividends
348,000 + 27186 - 49,000
$326186
Do you want to own your own candy store? Wow! With some interest in running your own business and a decent credit rating, you can probably get a bank loan on startup costs for franchises such as Candy Express, The Fudge Company, Karmel Corn, and Rocky Mountain Chocolate Factory. Startup costs (in thousands of dollars) for a random sample of candy stores are given below. Assume that the population of x values has an approximately normal distribution. 92 177 129 96 75 94 116 100 85 (a) Use a calculator with mean and sample standard deviation keys to find the sample mean startup cost x and sample standard deviation s. (Round your answers to one decimal place.) x = thousand dollars s = thousand dollars (b) Find a 90% confidence interval for the population average startup costs ? for candy store franchises. (Round your answers to one decimal place.) lower limit thousand dollars upper limit thousand dollars
Answer: Lower limit = 88.1
Upper limit = 126.1
Explanation:
Given :
Sample mean = [tex]\overline{x}[/tex] = 107.1
Sample standard deviation = s = 30.7
Sample size = n = 9
∴ Degree of freedom = [tex]d_{f}[/tex] = n - 1 = 8
∝ = 1 - confidence interval = 1 - 0.90 = 0.10
[tex]\frac{\alpha}{2}[/tex] = 0.05
From t-distribution table;
[tex]t_{0.05}[/tex] = 1.860
∴ Margin of error(MOE) = [tex]t_{0.05}[/tex]×[tex]\frac{30.7 }{\sqrt{9} }[/tex]
= 1.860×[tex]\frac{30.7 }{\sqrt{9} }[/tex]
=19.03
∴ Lower Limit = 107.1 - 19.03 = 88.1
Upper limit = 107.1 + 19.03 = 126.1
The sample mean startup cost for the candy stores is 106.3 thousand dollars with a standard deviation of about 31.5 thousand dollars. For a 90% confidence interval, the average costs would lie between 79.1 and 133.5 thousand dollars.
Explanation:First, let's calculate the mean and standard deviation of the provided costs. The costs given are 92, 177, 129, 96, 75, 94, 116, 100, 85. By adding all the values and dividing by the number of values (9), we can find the mean, which comes out to about 106.3 thousand dollars. The standard deviation can be found using the formula sqrt[((92-106.3)^2 + (177-106.3)^2 + ... + (85-106.3)^2) / (9-1)], which is about 31.5 thousand dollars.
Now, for part (b), we can use the formula for a confidence interval, which is x ± z*(s/ sqrt(n)), where x is the mean, z is the z-score (for a 90% confidence interval, it's 1.645), s is the standard deviation, and n is the sample size. Plugging in the values we have, we get 106.3 ± 1.645*(31.5/sqrt(9)). This gives us the confidence interval as 79.1 thousand dollars to 133.5 thousand dollars.
So, if you're planning to start a candy store franchise, you can be 90% confident that the average startup cost will be between 79.1 and 133.5 thousand dollars.
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As part of the rehabilitation of the downtown area of a southern U.S. city, the Parks and Recreation Department is planning to develop the space below several overpasses into basketball, handball, miniature golf, and tennis courts. The initial cost is expected to be $150,000 for improvements which are expected to have a 20-year life. Annual maintenance costs are projected to be $12,000. The department expects 24,000 people per year to use the facilities an average of 2 hours each. The value of the recreation has been conservatively set at $0.50 per hour. At a discount rate of 3% per year, what is the conventional B/C ratio for the project?
Answer:
The conventional B/C ratio is 1.0868.
Explanation:
Here B / C ratio means the benefit by cost ratio, so here we will first individually calculate the benefit and cost which the parks and recreation department will receive.
BENEFIT RECEIVED =
$24,000(people that will come) x 2 (average hour ) x $.50 ( rate per hour )
= $24,000
calculating present value, where i = interest and n = number of years
$24,000 / (1+i)^1 + $24,000 / (1+i)^2 + _ __ _ + $24,000 / (1+i)^20
= $24,000 x [ 1 - 1 / (1+.03)^20 ] / .03 ( given i = 3% )
= $357,060
PRESENT VALUE OF COST INCURRED =
$150,000 + $12,000 / (1+i)^1 + $12,000 / (1+i)^2 + _ _ + $12,000 / (1+i)^20
= $150,000 + $12,000 x [ 1 - 1 / (1+.03)^20 ] / .03
= $328,530
B / C RATIO = $357,060 / $328,530
= 1.0868
The following financial information is for Chesapeake Corporation are for the fiscal years ending 2018 & 2017 (all balances are normal): Item/Account 2018 2017 Cash $35,000 $24,000 Accounts Receivable 56,000 52,000 Inventory 58,000 44,000 Current Liabilities 76,000 42,000 Net Sales (all credit) 550,000 485,000 Cost of Goods Sold 290,000 265,000 Use this information to determine the number of days in inventory for 2018: (Use a 365 day year. Round & enter your answers to one decimal place and enter the value.)
Answer:
The number of days in inventory for 2018 is 64.1 days
Explanation:
The formula for computing the number of days in inventory is shown below:
= (Average inventory ÷ Cost of good sold ) × 365 days
where,
Average inventory = (Opening inventory + ending inventory) ÷ 2
= ($58,000 + $44,000) ÷ 2
= $51000
Now put the values on the formula which is shown above.
= ($51000 ÷ $290,000) × 365 days
= 64.1 days
Thus, the number of days in inventory for 2018 is 64.1 days
The normal time for a repetitive task that produced two work units per cycle is 3.0 min. The plan uses a PFD allowance factor of 15%. Determine (a) the standard time per piece and (b) how many work units are produced in an 8-hour shift at standard performance. (20 pts)
Answer:
A.- 3.45 min to produce two work units
B.- In a 8-hout shift at standard performance 274 work units are produced
Explanation:
The Standart tiem per piece would be:
[tex]StandardTime=NormalTime*(1+PFD)[/tex]
Given your numbers it will be:
[tex]3 * (1 + 0.15)= 3.45[/tex]
This is the time per cycle to produce 2 work units
Now, in an 8 hours shift there are 480 minutes. Dividing between the standard time of a cycle we get the standard performance
[tex]\frac{480}{3.45} = 137.14[/tex]
Rounding, we will be getting 137 cycles
Lastly, because each cycle produce 2 work units we are having a total of 274 Units
Alpha Industries is considering a project with an initial cost of $7.4 million. The project will produce cash inflows of $1.54 million a year for seven years. The firm uses the subjective approach to assign discount rates to projects. For this project, the subjective adjustment is +1.5 percent. The firm has a pretax cost of debt of 8.6 percent and a cost of equity of 13.7 percent. The debt-equity ratio is 0.0.65 and the tax rate is 35 percent. What is the net present value of the project?
Answer:
Net Present Value: 362,855
Explanation:
First we need to calculate the WACC to know the required return of the project.
[tex]WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})[/tex]
Ke = 0.152 (0.137 cost of capital+ 0.015 subjective risk)
ER = 0.35 = E/(E+D)
Kd = 0.086
DR = 0.65 = D/(E+D)
t = 0.35
[tex]WACC = .152(.35) + .086(1-0.35)(.65)[/tex]
WACC 8.95350%
Then we calcualte the net present value:
Present value of the cash flow
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C= 1,540,000
rate = 8.9535%
time 7 years
[tex]1,540,000 \times \frac{1-(1+0.089535)^{-7} }{0.089535} = PV\\[/tex]
PV = 7,762,855
Present value of the cash flow - Investment = NPV
7,762,855 - 7,400,000 = 362,855
Use the following information to determine Total Stockholders' Equity:Total Assets $ 45,000 Total Liabilities 18,000 Total Stockholders' Equity x Total Retained Earnings 5,000
Answer:
The total stockholder equity value is $27,000
Explanation:
By using the accounting equation which is shown below, we can compute the value of total stockholder equity
Accounting Equation:
Total Assets = Total Liabilities + Total Equity
where,
total assets = $45,000
total liabilities = $18,000
So, total equity = $27,000 which includes retained earnings of $5,000
By using these 3 terms, we get to know the profitability, performance of the company.
Hence, the total stockholder equity value is $27,000
Lakeside, Inc. estimated manufacturing overhead costs for the year at $ 372 comma 000, based on 181 comma 000 estimated direct labor hours. Actual direct labor hours for the year totaled 191 comma 000. The manufacturing overhead account contains debit entries totaling $ 391 comma 000. The Manufacturing Overhead for the year was ________. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
The Manufacturing Overhead for the year was $401,750.
The company estimated overhead costs based on direct labor hours.
To calculate the overhead, we need to consider both estimated and actual figures. Their estimated manufacturing overhead was $372,000 based on 181,000 estimated direct labor hours, and the actual direct labor hours were 191,000.
First, calculate the predetermined overhead rate: $372,000 / 181,000 = $2.055 per direct labor hour.
Then, find the total manufacturing overhead applied: $2.055 x 191,000 = $391,605.
Finally, determine the Manufacturing Overhead: $391,605 + ($391,000 - $391,605) = $401,750.
Antonio’s makes the greatest pizza and delivers it hot to all the dorms around campus. Last week Antonio's supplier of pepperoni informed him of a 25% increase in price of pepperoni. What happens in the market for Antonio's pizzas?
Answer:
At first, It will have no impact.
Later it will make the equilibrium price go higher. Quantity unchanged
Explanation:
First The raw material cost increase in the pepperoni will decrease the profit of Antonio's pizzas with that ingredient. It will not have an impact on the pizzas market.
But once after, Antonio's decides to markup the price, to get their previous profit margin back, the price of the pizzas will increase and because is the only supplier around campus their demand will not react (low to any elasticity to price) to the price rise and accepts the new price.
The increased price of pepperoni, a key input in Antonio's pizza production, leads to a decrease in supply as costs rise. Antonio can choose to absorb these costs, decreasing his profits, or pass the costs onto consumers by raising pizza prices, which might decrease demand. This supply and demand shift affects the market for Antonio's pizzas.
Explanation:The scenario presented deals with the concepts of supply, demand, and price in a market, emphasizing more on the effect of input costs on a business. When Antonio's pepperoni supplier increases the price by 25%, this affects Antonio's production costs.
Essentially, Antonio's supplier's price increase leads to a decrease in the supply of Antonio's pizzas because the cost of production, in this case the price of pepperoni, has increased. Antonio may need to decrease the number of pizzas he can produce or increase his pizza prices to compensate for the increased costs, leading to a new equilibrium in the market for his pizzas.
Two scenarios are possible here: If Antonio chooses to keep the pizza prices fixed, he may have to endure reduced profits. On the other hand, if he increases the pizza prices, this could possibly lead to a decrease in demand as pizza becomes more expensive for customers around campus. Thus, the price increase of a key input affects not just the supply but also the demand of Antonio's pizzas.
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Sally and Andy are partners in Just Hats, LLC. Andy works in the business for an agreed salary draw of $4,000 per month. Sally has invested $200,000 in the business and Andy invested $100,000. THe net income of the business is $168,000 for the year. Income is distributed based on the investment of each partner after allocation for salary. How much net income is allocated to Sally?
Answer:
Net income allocated to sally is $112000
Explanation:
Sally invested $200000 and Andy invested $100000, which means Andy's investment is half of Sally's investment. So he will receive the half of what Sally will get.
Let
Sally's pay be x
Andy's pay be x/2
Total Net income is 168000 dollars.
So, putting it in an equation, we get
(x+x/2)=168000
x(1+0.5)=168000
x(1.5)=168000
x= 168000/1.5
x=112000
So Sally's share will be $112000
Andy's share will be x/2
=112000/2
=56000
So Andy share will be $56000
The Net income allocated to sally is $112000
Calculation of the allocation of the net income:Since Sally invested $200000 and Andy invested $100000, which means Andy's investment is half of Sally's investment.
Let us assume Sally's pay be x
So, Andy's pay be x/2
And,
Total Net income is 168000 dollars.
Now the equation is
(x+x/2)=$168000
x(1+0.5)=$168000
x(1.5)=$168000
x= $168000/1.5
x=$112000
So Sally's share will be $112000
Now
Andy's share will be x/2
=$112000/2
=$56000
Hence, the Net income allocated to sally is $112000".
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Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics. Microeconomics Macroeconomics The effect of federal government spending on the national unemployment rate The effect of a cigarette tax on the quantity of cigarettes sold The effect of an increase in the money supply on the rate of inflation
The correct answers are the following:
Microeconomics
The effect of a cigarette tax on the quantity of cigarettes soldMacroeconomics
The effect of federal government spending on the national unemployment rate The effect of an increase in the money supply on the rate of inflationMicroeconomics is defined as the study of the individual decisions reached by economic agents (households/individuals, firms and public sector entities) in the markets of products services and factors of production.
Macroeconomics is the study of the economy as a whole, using aggregate indicators that are the result of accummulating thousands or millions of the individual decisions studied in the micro approach, and which measure the behaviour of the whole economy of a certain country, region, or even the whole world (depending on the level of aggregation used!)
The effect of federal government spending on the national unemployment rate and the effect of an increase in the money supply on the rate of inflation are topics in macroeconomics, while the effect of a cigarette tax on the quantity of cigarettes sold is a topic in microeconomics.
Explanation:In the study of economics, the topics you mentioned would likely be studied in both microeconomics and macroeconomics, but with a different focus. The effect of federal government spending on the national unemployment rate and the effect of an increase in the money supply on the rate of inflation are topics that fall under macroeconomics. These topics deal with the overall economy and how government policies impact it as a whole.
On the other hand, the effect of a cigarette tax on the quantity of cigarettes sold would be studied in microeconomics. This topic focuses on individual markets and how decisions by consumers and producers affect the specific market for cigarettes.
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The management of L Corporation is considering a project that would require an investment of $208,000 and would last for 6 years. The annual net operating income from the project would be $104,000, which includes depreciation of $15,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.):
Answer: 1.748 years
Explanation: The term payback period can be defined as the period under which the firm can recover its initial investment in the project from the cash inflows. It can be computed using following formula :-
[tex]=\:Payback\:period\:=\:\frac{Initial\:cash\:investment}{cash\:inflows}[/tex]
where,
total annual cash inflow = $104,000 + $15,000 = $119,000
now, putting the values into equation we get,
[tex]=\:Payback\:period\:=\:\frac{208,000}{119,000}[/tex]
= 1.748 years
Trade will take place: A. if the maximum that a consumer is willing and able to pay is less than the minimum price the producer is willing and able to accept for a good. B. if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good. C. only if the maximum that a consumer is willing and able to pay is equal to the minimum price the producer is willing and able to accept for a good. D. none of the above.
Answer: (B.) If the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good.
Explanation:
A producer will only sell goods and services if the consumer is willing to pay as much as the asking price. i.e. The price that the producer is asking. For this to happen the consumer's willingness to pay must be greater than the minimum price.
Therefore , the trade will take place if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good.
Trade occurs if a consumer's maximum willingness to pay exceeds the minimum price a producer will accept, benefiting both parties with a consumer surplus and a producer surplus. So, option B is correct.
Trade will take place if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good. This scenario enables both the consumer to obtain the item for less than the maximum they were willing to pay, creating a consumer surplus, and the producer to sell the item for more than their minimum acceptable price, leading to a producer surplus. These conditions drive trade since both parties are made better off through the transaction.
A manufacturing company producing medical devices reported $59 million in sales over the last year. At the end of the same year, the company had $16 million worth of inventory of ready-to-ship devices. (Round your answer to 1 decimal place.) Assuming that units in inventory are valued (based on cost of goods sold) at $500 per unit and are sold for $1750 per unit, what is the company's annual inventory tumover
Answer:
The inventory TO is 3.6875
Explanation:
[tex]\frac{Sales}{Average Inventory} = $Inventory Turnover[/tex]
where:
[tex]$$Average Inventory=(Beginning Inventory + Ending Inventory)/2[/tex]
Considering there is not sufficient information to calculate the begining inventory we are going to work only with the ending inventory so:
[tex]\frac{59,000,000}{16,000,000} = 3.6875[/tex]
The inventory TO is 3.6875 This means the company sales their inventory almost 4 times per year.
Petty Cash is easily misappropriated if business processes and internal controls are not established and enforced. Provide and explain a minimum of four controls and/or concepts that will help a company ensure that its petty cash accounts are appropriately used and safeguarded?
1. Your church has decided that one of its missions will be to provide assistance to those members that demonstrate a need for assistance to attend local community colleges. The board decided to set-up a trust fund that will be available in 5 years. One member puts up $10,000 to begin the fund. The church also collects another $5,000 per year for the next 5 years. How much will the fund have beginning in 5 years? Assume an interest rate of 8%.
Answer:The total amount in fund at the beginning of [tex]5^{th}[/tex] year = $10000 +$19,963.55 = $29,963.55
Explanation:
Initial amount to begin the fund = $10,000
Now , given ;
Church collects another $5,000 per year for the next 5 years at an interest rate of 8%.
Therefore we'll evaluate the Present value of these $5000 for the next 5 years.
PV = [tex]\frac{1}{(1+i)^{n}}\times 5000[/tex]
where ;
i = interest rate
n = time period
∴ Net Present Value = [tex]\left [ \frac{1}{(1+0.8)^{1}}+\frac{1}{(1+0.8)^{2}}+\frac{1}{(1+0.8)^{3}}+\frac{1}{(1+0.8)^{4}}+\frac{1}{(1+0.8)^{5}} \right ]\times 5000[/tex]
On evaluating the above equation;
Net Present Value = 5000×(0.926 + 0.857 + 0.794 + 0.735 + 0.681)
Net Present Value = $19,963.55
Now,
The total amount in fund at the beginning of [tex]5^{th}[/tex] year = $10000 +$19,963.55 = $29,963.55