Consider the rate of return of stocks ABC and XYZ.Year rABC rXYZ1 20% 30%2 12 123 14 184 3 05 1 −10a. Calculate the arithmetic average return on these stocks over the sample period.b. Which stock has greater dispersion around the mean return?c. Calculate the geometric average returns of each stock. What do you conclude?d. If you were equally likely to earn a return of 20%, 12%, 14%, 3%, or 1% in each year (these are the five annual returns for stock ABC), what would be your expected rate of return?e. What if the five possible outcomes were those of stock XYZ?f. Given your answers to parts (d) and (e), which measure of average return, arithmetic or geometric, appears more useful for predicting future performance?
Answers
Answer:
Please see attachment
Explanation:
Please see attachment
Related Questions
Chesters turnover rate for this year is 6.3%. This rate is projected to remain the same next year and no further downsizing will occur from automating. Chester plans to spend an additional $500 beyond the extra amount above the$1000 recruiting base it spent this year. The goal of this additional investment is to improve the quality of applicants. What would the total recruiting cost be for chester next year?a-$163,990b-$178,898c-$149,806d-193,806
Answers
Answer:
d-193,806
Explanation:
Please see attachment
Based on Chester's turnover rate and the additional cost of recruiting, the total recruiting cost for Chester would be D. $193,806.
The total recruiting cost for Chester can be found by the formula:
= (Recruiting base spending + Current year spending + Additional spending) x Number of employees next year
Number of employees next year:
= Current employee number x Turnover rate
= 468 x 6.3%
= 29.484
Recruiting cost is:
= (1,000 + 5,000 + 500) x 29.484
= $193,806
In conclusion, option D is correct.
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Woodward Corporation reported pretax book income of $1,000,000. Included in the computation were favorable temporary differences of $200,000, unfavorable temporary differences of $50,000, and favorable permanent differences of $100,000. Compute the companyâs current income tax expense or benefit.
Answers
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
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.
The correct answer is option (a) $250,000.
To calculate Woodward Corporation's current income tax expense or benefit, we need to adjust the pretax book income for the reported differences. Here is the step-by-step calculation:
Pretax book income: $1,000,000Add favorable temporary differences: $200,000Subtract unfavorable temporary differences: $50,000Add favorable permanent differences: $100,000Taxable income: $1,000,000 + $200,000 - $50,000 + $100,000 = $1,250,000Assuming the tax rate is 20%, the current income tax expense is calculated as follows:
Current income tax expense = Taxable income * Tax rateCurrent income tax expense = $1,250,000 * 20% = $250,000Therefore, the correct answer is (a) $250,000.
Complete Question
Woodward Corporation reported pretax book income of $1,000,000. Included in the computation were favorable temporary differences of $200,000, unfavorable temporary differences of $50,000, and favorable permanent differences of $100,000. Compute the company's current income tax expense or benefit.
a) $250,000
b) $240,000
c) $260,000
d) $230,000
Your firm needs a computerized line-boring machine that costs $90,000 and requires $16,000 in maintenance costs for each year of its 3-year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. The MACRS percentages for each year are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent, respectively. Assume a tax rate of 35 percent and a discount rate of 10 percent. Assume the machine can be sold for $12,000 at the end of year 3. What is the aftertax salvage value of the machine?A) $5,633B) $7,800C) $7,920D) $10,134E) $10,678
Answers
Answer:
The aftertax salvage value of the machine is D) $10,134
Explanation:
Hi. first, we need to find out the book value of the machine at the selling date, that is 3 years from now, and the book value is as follows.
[tex]BookValue=90,000-90,000*0.3333-90,000*0.4444-90,000*0.1482=6,669[/tex]
Since taxes are based on the profit you make by selling something, our profit is:
[tex]Profit=12,000-6,669=5,331[/tex]
Therefore, our taxes are:
[tex]Taxes=5,331*0.35=1,866[/tex]
So, the after tax salvage value of the machine is the money you received on the sale minus the taxes you have to pay, that is:
Salvage Value of the Machine = $12,000 - $1,866?= $10,134
That is option D)
Best of luck.
Doug's Boat Shop, Inc. reports operating income of $260,000 and interest expense of $31,200. The average common stockholders' equity during the year was $50,000. The beginning assets balance is $115,000 and ending assets balance is $180,000. What is the leverage ratio? (Round your final answer to two decimal places.)
Answers
Answer:
1. Interest coverage ratio=8.33
2. debt stockholder ratio=0.624
3. debt ratio=0.21
Explanation:
Leverage ratio is a financial tool used to determine a company's level of debt and it's ability to handle debt without going bankrupt.
1. Consider the interest coverage ratio formula;
interest coverage ratio=operating income/interest expense
where;
operating income=$260,000
interest expense= $31,200
replacing;
interest coverage ratio=260,000/31,200=8.33
2. Consider the debt to equity ratio formula;
debt to equity ratio=debt/stockholder equity
where;
debt=interest expense=$31,200
stockholder equity= $50,000
replacing;
debt stockholder ratio=31,200/50,000=0.624
3. Consider the debt ratio formula;
debt ratio=debt/assets
where;
debt=interest expense=$31,200
average assets=(beginning asset balance+ending asset balance)/2
average assets=(115,000+180,000)/2=$147,500
replacing;
debt ratio=31,200/147,500=0.21
The leverage ratio for Doug's Boat Shop, Inc. is calculated by dividing the average assets of $147,500 by the average common stockholders' equity of $50,000, resulting in a leverage ratio of 2.95.
Explanation:The leverage ratio is calculated by dividing the total average assets by the average common stockholders' equity. The average assets can be found by taking the average of beginning and ending assets. In this example, the balance of the beginning asset is $115,000, and the balance of the ending asset is $180,000, so the average asset is (115,000 + 180,000) / 2 = $147,500.
Given the average common stockholders' equity during the year was $50,000, the leverage ratio would be $147,500 / $50,000 = 2.95.
After rounding to two decimal places, the leverage ratio for Doug's Boat Shop, Inc. is 2.95.
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Leslie, Inc., followed the practice of depreciating its building on a straight-line basis. A building was purchased in 2016 and had an estimated useful life of 25 years and a residual value of $20,000.
The company's depreciation expense for 2016 was $15,000 on the building.
What was the original cost of the building?
a. $395,000
b. $500,000
c. $520,000
d. Cannot be determined from the information given.
Answers
Answer:
a. $395,000
Explanation:
Since the depreciating method is practiced in a straight-line basis, the equation for the value of the building as a function of the time in years (V(t)) is:
[tex]V(t) = -kt + C[/tex]
Where k is the yearly depreciation rate of $15,000 per year and C is the initial cost.
For t = 25 years, V(t) = $20,000. Thus:
[tex]V(t) = -15,000t + C\\V(25) = 20,000 = -15,000*25 +C\\C= 20,000 + 15,000*25\\C= 395,000[/tex]
The original cost of the building was $395,000
Juliette formed a new business to sell sporting goods this year. The business opened its doors to customers on June 1. Determine the amount of start-up costs Juliette can immediately expense (not including the portion of the expenditures that are amortized over 180 months) this year in the following alternative scenarios:
a. She incurred start-up costs of $4,200. what amount of start-up costs immediately expensed ?___
b. She incurred start-up costs of $45,500. what amount of start-up costs immediately expensed ?___
c. She incurred start-up costs of $53,800.what amount of start-up costs immediately expensed ?___ .
d. She incurred start-up costs of $65,500.what amount of start-up costs immediately expensed ?___
e. How would you answer parts (a) through (d) if she formed a partnership or a corporation and she incurred the same amount of organizational expenditures rather than start-up costs (how much of the organizational expenditures would be immediately deductible)?
Answers
Answer:
1) She incurred start-up costs of $2,500.
a) Amount of start up costs immediately expensed?
$2,500, computed as follows:
1 Maximum immediate expense 5000 S 195(b)(1)(ii)
2 Total start-up costs 2500 Given In
problem
3 Phase-out threshold 50000 S 195(b)(1)(ii)
4 Immediate expense phase-out 0 (2-3)
Allowable immediate expense 2500 Lessor of (2)or-(1)-(4)
______________
2) She incurred start-up costs of $41,000
a) Amount of start up cost immediately expensed
$5000, computed as follows:
1 Maximum immediate expense 5000 S 195(b)(1)(ii)
2 Total start-up costs 41000 Given In
problem
3 Phase-out threshold 50000 S 195(b)(1)(ii)
4 Immediate expense phase-out 0 (2-3)
Allowable immediate expense 5000 Lessor of (2)or-(1)-(4)
3) She incurred start-up costs of $51,100.
a) Amount of start up cost immediately expensed
$3900, computed as follows:
1 Maximum immediate expense 5000 S 195(b)(1)(ii)
2 Total start-up costs 51100 Given In
problem
3 Phase-out threshold 50000 S 195(b)(1)(ii)
4 Immediate expense phase-out 1100 (2-3)
Allowable immediate expense 3900 Lessor of (2)or-(1)-(4)
4) She incurred start-up costs of $61,250.(Leave no answer blank. Enter zero if applicable.)
$0, computed as follows:
1 Maximum immediate expense 5000 S 195(b)(1)(ii)
2 Total start-up costs 61250 Given In
problem
3 Phase-out threshold 50000 S 195(b)(1)(ii)
4 Immediate expense phase-out 11250 (2-3)
Allowable immediate expense 0 Lessor of (2)or-(1)-(4)
5) How would you answer parts (a) through (d) if she formed a partnership or a corporation and she incurred the same amount of organizational expenditures rather than start-up costs (how much of the organizational expenditures would be immediately deductible)?
Answer:
The answers would be the same if these were organizational expenditures instead ofstart-up costs.Note, however, that organizational expenditures only apply tocorporations and partnerships and do not apply to businesses organized as soleproprietorships
Explanation:
Hope you got it :)
Juliette can immediately expense $4,200 for scenario a, $5,000 for scenario b, $1,200 for scenario c, and $0 for scenario d. If the costs were part of organizational expenses rather than start-up costs, the same principles apply.
Explanation:The amount Juliette can immediately expense for her start-up costs is determined under the U.S. tax code 195, which allows a business to expense the first $5,000 of start-up costs in the year the business starts, but this $5,000 amount is reduced by the amount by which the start-up expenditures exceed $50,000.
For scenario a, she incurs $4,200 in start-up costs, which is less than the allowed $5,000. So she could expense the full $4,200 immediately. In scenario b, the start-up costs amount to $45,500 and are less than $50,000. The full $5,000 can be immediately expensed. In scenario c, the start-up costs are $3,800 in excess of $50,000. This means she can immediately expense $1,200 ($5000 - $3,800). In scenario d, her start-up costs exceed $50,000 by $15,500. As the costs exceed the threshold, she cannot expense any amount immediately. If the costs were part of organization expenses for a partnership or corporation, the same principles would apply under section 248 for corporations and 709 for partnerships.Learn more about Start-up cost expensing here:https://brainly.com/question/34092391
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Suppose a firm has 15 million shares of common stock outstanding and six candidates are up for election to five seats on the board of directors.
a.
If the firm uses cumulative voting to elect its board, what is the minimum number of votes needed to ensure election of one member to the board?
Minimum number of votes
b.
If the firm uses straight voting to elect its board, what is the minimum number of votes needed to ensure election of one member to the board?
Answers
Answer:
Consider the following calculations
Explanation:
a.) Under cumulative voting scenario,
Total number of votes available = Common Shares Outstanding × No of directors
= 15 x 5 million
= 75 million
As there are six candidates for the five board positions, the five candidates with highest number of votes will be elected to the board and the candidate with the least total votes will not be elected.
Minimum votes needed to ensure election =1/6 x 75 million + 1 vote to break any ties
= 12,500,001 votes
If one candidate receives 12,500,001 votes, the leftover is total 62,499,999 votes.
No matter how these votes are spread over the remaining 5 director candidates, it is impossible for each of the 5 to receive more than 12,500,001. This would require more than 5 × 12,500,001 votes, or more than the remaining 62,499,999 votes.
b.) Now, in case of straight voting,
Vote on board of directors occurs one director at a time.
=> Number of votes eligible for each director = Number of Shares Outstanding = 15,000,000
Minimum number of votes needed to ensure election is through simple majority i.e. = 15,000,000/2 + 1 = 7,500,001 votes
In cumulative voting, 5 votes are needed to ensure the election of one board member. In straight voting, 7.5 million votes are needed to ensure the election of one board member.
Explanation:a. In cumulative voting, the minimum number of votes needed to ensure election of one member to the board is equal to the number of seats available. Since there are five seats on the board, the firm needs at least 5 votes to ensure the election of one member.
b. In straight voting, the minimum number of votes needed to ensure election of one member to the board is equal to half of the total number of shares plus one. In this case, half of 15 million is 7.5 million, and when we add one, we get 7.5 million + 1 = 7.5 million votes.
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Maxine, age 35, earns $200,000 annually from ABC Incorporated. ABC sponsors a SIMPLE, and matches all employee deferrals 100% up to a 3% contribution. What is the maximum employee deferral contribution to Maxine’s SIMPLE account for this year?
Answers
Answer:
$12,500.
Explanation:
Please see attachment.
The maximum employee deferral contribution to Maxine’s SIMPLE account for this year is $6,000.
Explanation:The maximum employee deferral contribution to Maxine’s SIMPLE account for this year can be calculated using the employer's matching policy. ABC Incorporated matches all employee deferrals 100% up to a 3% contribution. Maxine's annual income is $200,000, so her maximum employee deferral contribution for this year would be 3% of $200,000, which is $6,000.
A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of return is 4.25%, what is the present value of this prize? (Assume the lottery pays out as an ordinary annuity. Round your answer to the nearest cent.)
Answers
The present value of a $1,000,000 lottery prize that pays out $50,000 annually for 20 years, taking into account a 4.25% interest rate, is approximately $577,462.86.
Explanation:The present value of the lottery prize can be calculated using the formula for the present value of an ordinary annuity. An annuity is a series of equal payments made at regular intervals. The formula for the present value of an ordinary annuity takes into account the periodic payment amount, the interest rate, and the number of payment periods.
In this case, the lottery payout is an annuity with a yearly payment of $50,000, the interest rate is 4.25% (expressed as 0.0425 as a decimal), and there are 20 payment periods.
So, the formula to calculate the present value of the annuity is as follows: PV = Pmt * [(1 - (1 + r)^-n) / r]
Where:
PV is the present value of the annuity,Pmt is the recuring payment amount,r is the interest rate per period, andn is the number of periods.Substituting the given values into the formula:
PV = $50,000 * [(1 - (1 + 0.0425)^-20) / 0.0425]
When you calculate the expression inside the brackets first and then multiply by $50,000, you get a present value of approximately $577,462.86.
This means that the $1,000,000 lottery prize, paid out as $50,000 per year for 20 years and discounted at an interest rate of 4.25%, is roughly worth $577,462.86 in today's dollars.
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Stephanie's building, which was used in her business, was destroyed in a fire. Stephanie's adjusted basis in the building was $175,000, and its FMV was $210,000. Stephanie filed an insurance claim and was reimbursed $200,000. In that same year, Stephanie invested $180,000 of the insurance proceeds in another business building. Assuming the proper election is made to defer gain, Stephanie's basis in the new building will be
Answers
Answer:
$1,75,000
Explanation:
Please see attachment
Last year Jain Technologies had $250 million of sales and $100 million of fixed assets, so its FA/Sales ratio was 40%. However, its fixed assets were used at only 75% of capacity. Now the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level it would have had had it been operating at full capacity. What target FA/Sales ratio should the company set? a. 28.5% b. 30.0% c. 31.5% d. 33.1% e. 34.7%
Answers
Answer:
B. 30.0%
Explanation:
Sales ratio = Fixed Assets\ Full Capacity Sales
Target FA\Sales ratio = 100 000 000/250 000 000*75%=0.3
B. 30.0% The correct answer is B.
Pioneer Systems Inc. has a high degree of formalization. Employees in Pioneer Systems are more likely to:
A. face morale and motivation problems.
B. feel empowered to implement new solutions.
C. exhibit high levels creativity and experimentation.
D. face ambiguity as a result of a lack of formal rules and procedures.
Answers
Answer:
Letter A is correct. Face morale and motivation problems.
Explanation:
A company with a high degree of formalization is a company with a vertical organizational structure. Vertical management is represented by a classic business structure, based on the principle of top-down authority and command and a fixed organization chart.
Being an inflexible organizational model, there are some disadvantages, such as difficulty in interaction between areas and teams, communication failure due to communication noise, which can lead to the creation of moral conflicts and also the lack of motivation of employees, which due to Organizational rigidity is not so active in the process of contributing ideas and suggestions to organizational objectives, as decision making is centralized and concentrated at the top of the hierarchy.
Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capacity of 7,000 hours.
Variable costs:
Indirect factory wages $21,000
Power and light 15,540
Indirect materials 13,440
Total variable cost $49,980
Fixed costs:
Supervisory salaries $12,720
Depreciation of plant and equipment 32,630
Insurance and property taxes 9,950
Total fixed cost 55,300
Total factory overhead cost $105,280
During October, the department operated at 7,400 standard hours, and the factory overhead costs incurred were indirect factory wages, $22,420; power and light, $16,130; indirect materials, $14,500; supervisory salaries, $12,720; depreciation of plant and equipment, $32,630; and insurance and property taxes, $9,950.
Required:
Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 7,400 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your per unit computations to the nearest cent, if required. If an amount box does not require an entry, leave it blank.
Feeling Better Medical Inc.
Factory Overhead Cost Variance Report—Assembly Department
For the Month Ended October 31
Normal capacity for the month 7,000 hrs.
Actual production for the month 7,400 hrs.
Budget Actual Favorable Variances Unfavorable Variances
Variable costs:
Indirect factory wages
Power and light
Indirect materials
Total variable cost
Fixed costs:
Supervisory salaries
Depreciation of plant and equipment
Insurance and property taxes
Total fixed cost
Total factory overhead cost
Total controllable variances
Excess hours used over normal at the standard rate for fixed factory overhead
Answers
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Commons, Inc. provides the following information for 2018:
Net income $36,000
Market price per share of common stock $16/share
Dividends paid $0.70/share
Common stock outstanding at Jan. 1, 2018 130,000 shares
Common stock outstanding at Dec. 31, 2018 165,000 shares
The company has no preferred stock outstanding. Calculate the dividend yield for common stock?
Answers
Answer:
4.375%
Explanation:
The formula to compute the dividend yield for common stock is shown below:
= Dividend per share ÷ Market price per share
= $0.70 per share ÷ $16 per share
= 4.375%
It shows a relationship between the dividend per share and the market price per share so that the accurate amount of dividend yield can come.
All other information which is given is not relevant. Hence, ignored it
Excelor stock is expected to pay $3.00 per share as its next annual dividend. The firm has a policy of increasing the dividend by 11.0 percent annually. The stock has a market price of $13.65 and a beta of 2.8. The market risk premium is 8.56 percent and the risk-free rate is 4.90 percent. What is the cost of equity?
Answers
Answer:
30.92%
Explanation:
You find the answer by calculating the cost of equity using two methods; Dividend discount model and CAPM
Dividend discount model;
cost of equity; r = (D1/P0) +g
whereby, D1 = next year's dividend = 3.00
P0= current price = 13.65
g = dividend growth rate = 11% or 0.11 as a decimal
r = (3/13.65) + 0.11
r = 0.2198 + 0.11
r= 0.3298 or 32.98%
Using CAPM;
r = risk free + beta (Market risk premium)
r = 0.049 + (2.8 * 0.0856)
r = 0.049 + 0.2397
r = 0.2887 or 28.87%
Next, find the average of the two cost of equities;
=(32.98% + 28.87% )/2
= 30.92%
You are considering 3 independent projects, project A, project B, and project C. Given the following cash flow information, calculate the payback period for each
Project AProject BProject C
Initial Outlay-1,000-10,000-5,000
Inflow Yr 16005,0001,000
Inflow Yr 23003,0001,000
Inflow Yr 32003,0002,000
Inflow Yr 41003,0002,000
Inflow Yr 55003,0002,000
If you require a 3-year payback before an investment can be accepted, which project(s) would be accepted?
Full Point will be given for work shown
Answers
Answer:
Project A should be accepted as it has less payback period
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
For Project A
In year 0 = $1,000
In year 1 = $600
In year 2 = $300
In year 3 = $200
In year 4 = $100
In year 5 = $500
If we sum the first 2 year cash inflows than it would be $900
Now we deduct the $900 from the $1,000 , so the amount would be $100 as if we added the third year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $200
So, the payback period equal to
= 2 years + $100 ÷ $200
= 2.5 years
For Project B
In year 0 = $10,000
In year 1 = $5,000
In year 2 = $3,000
In year 3 = $3,000
In year 4 = $3,000
In year 5 = $3,000
If we sum the first 2 year cash inflows than it would be $8,000
Now we deduct the $8,000 from the $10,000 , so the amount would be $2,000 as if we added the third year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $3,000
So, the payback period equal to
= 2 years + $2,000 ÷ $3,000
= 2.67 years
For Project C
In year 0 = $5,000
In year 1 = $1,000
In year 2 = $1,000
In year 3 = $2,000
In year 4 = $2,000
In year 5 = $2,000
If we sum the first 3 year cash inflows than it would be $4,000
Now we deduct the $4,000 from the $5,000 , so the amount would be $1,000 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $2,000
So, the payback period equal to
= 3 years + $1,000 ÷ $2,000
= 3.5 years
So, Project A should be accepted as it has less payback period
Project A and B have payback periods within the required 3 years, while Project C has a payback period exceeding 3 years, therefore only projects A and B would be accepted.
To calculate the payback period for each project, we must assess how long it takes for the initial investment to be recovered through the project's cash inflows. The payback period is the length of time required to recover the cost of an investment.
For Project A:
Year 1: Inflow of $600, remaining balance is $400 (1000-600).
Year 2: Inflow of $300, remaining balance is $100 (400-300).
Year 3: Inflow of $200, the remaining balance is recovered and the payback period is within 3 years.
For Project B:
Year 1: Inflow of $5,000, remaining balance is $5,000 (10000-5000).
Year 2: Inflow of $3,000, remaining balance is $2,000 (5000-3000).
Year 3: Inflow of $3,000, exceeding the remaining balance; thus, the payback period is within 3 years.
For Project C:
Year 1: Inflow of $1,000, remaining balance is $4,000 (5000-1000).
Year 2: Inflow of $1,000, remaining balance is $3,000 (4000-1000).
Year 3: Inflow of $2,000, remaining balance is $1,000 (3000-2000).
It is only by the end of Year 4, with another inflow of $2,000, that the remaining balance is recovered, making the payback period for Project C over 3 years.
Given a required payback period of 3 years, only projects A and B would be accepted as their payback periods are within this timeframe.
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:
Standard Quantity or Hours Standard Price
or Rate Standard
Cost
Direct materials 6.00 pounds $ 2.30 per pounds $ 13.80
Direct labor 0.50 hours $ 10.00 per hour $ 5.00
During the most recent month, the following activity was recorded:
During the most recent month, the following activity was recorded:
a. 11,000 pounds of material were purchased at a cost of $2.10 per pound.
b. All of the material purchased was used to produce 1,500 units of Zoom.
c. 500 hours of direct labor time were recorded at a total labor cost of $6,500.
Required:
1.
Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
2. Compute the labor rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Answers
Answer:
1. $2,200 Favorable ; $4,600 Unfavorable
2. $1,500 Unfavorable ; $2,500 Favorable
Explanation:
1. Material price variance:
= Actual quantity × Standard cost per unit-Actual cost
= (11,000 × $2.30) - ($2.10 × 11,000 )
= $2,200 Favorable
Material quantity variance:
= (Standard quantity × Standard cost per unit) - (Actual quantity × Standard cost per unit )
= (1,500 × 6 × $2.30) - (11,000 × $2.30)
= $4,600 Unfavorable
2. Labor rate variance:
= (Actual hours × Standard rate) - Actual labor paid
= (500 × $10) - $6,500
= $1,500 Unfavorable
Labor efficiency variance:
= (Standard hours × Standard rate) - (Actual hours × Standard rate )
= (1,500 × 0.50 × $10) - (500 × $10)
= $2,500 Favorable
otal Labor Variance Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.01 hours. During the month of April, 510,000 bottles were produced using 13,000 labor hours @ $9.00. The standard wage rate is $7.50 per hour. Required: Calculate the total variance for production labor for the month of April. Enter amounts as positive numbers. If required, round your answer to the nearest cent.
Answers
Answer:
$78,750 unfavorable
Explanation:
Total labor variance can be divided into direct labor efficiency variance and the direct labor rate variance
Direct labor efficiency variance (DLEV):
DLEV = (Expected labor hours - actual labor hours)*standard rate
[tex]DLEV=(0.01*510,000 - 13,000)*7,50\\DLEV = -59,250[/tex]
Direct labor rate variance (DLRV):
DLRV = Actual labor hours * (Standard Rate - Actual Rate)
[tex]DLRV = 13,000*(7.50 - 9.00)\\DLRV = -19,500[/tex]
Since both values are negative, they are both unfavorable and the total labor variance (TLV) is given by:
[tex]DLRV = 13,000*(7.50 - 9.00)\\DLRV = 59,250 + 19,500\\TLV = \$ 78,750 \ unfavorable[/tex]
William Beville’s computer training school, in Richmond, stocks workbooks with the following characteristics:Demand D = 19,500 units/yearOrdering cost S = $25/orderHolding cost H = $4/unit/yeara) Calculate the EOQ for the workbooks.b) What are the annual holding costs for the workbooks?c) What are the annual ordering costs?
Answers
Answer:
a) EOQ = 494 units
b) Annual Holding cost = $988
c) Annual order cost = $988
Explanation:
See images to get the explanation and computation:
a) EOQ = 494 units
b) Annual Holding cost = $988
c) Annual order cost = $988
What is cost?A cost is the worth of money that has been expended to produce something or provide a service and is therefore no longer available for use in production, research, retail, and accounting. In the case of an acquisition cost, the money spent on the acquisition is considered the cost.
Fixed and variable costs are the two main categories of expenses incurred by enterprises. Variable costs change with output, whereas fixed costs do not. Overhead costs are another name for fixed expenses. They must be paid whether a company produces 100 or 1,000 widgets.
A cost is an outlay needed to create, market, or prepare an item for regular usage. In other terms, it's the cost incurred to produce a good, buy inventories, sell goods, or prepare equipment for use in a commercial activity.
Any system for allocating expenses to a business component is known as costing. Costing is frequently used to establish costs for customers, distribution channels, employees, regions, products, product lines, processes, subsidiaries, and whole businesses.
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You were recently selected for an important 2-year overseas assignment in Qatar. This is a big career opportunity and a chance to work in a high-growth region of your company’s business.
You just returned from a weeklong trip to Qatar, which was part of the introduction to your new team and your soon-to-be new home.
You certainly became aware that there were some noticeable cultural differences between your country and Qatar.
You are scheduled to move in 3 months.
Which of the following actions would be the MOST EFFECTIVE approach for improving your cultural competence?
a) Create a list of the things that you found to be different than what you expected during your visit and plan some strategies for adjusting to these differences.
b) Learn as much as you can about each member of your new team in order to smooth your transition into the group.
c) Stay in frequent communication with your new team in order to prepare for your upcoming move.
d) Focus your efforts on closing out all of your remaining projects and commitments related to your current position to get ready for your overseas assignment.
Answers
Answer:
The correct answer is letter "A": Create a list of the things that you found to be different than what you expected during your visit and plan some strategies for adjusting to these differences.
Explanation:
To improve your cultural competence, it is a good idea to come up with a list of the aspects that you found different than expected so you can have a clear idea of what you may struggle with. From that point, you can determine what are the possible solutions for each aspect to adjust your cultural differences.
What is the process in which workers are given time off with pay to think about whether or not they wish to continue working for the company and will follow the rules? A. Alternative dispute resolution B. Phased retirement C. Disciplinary action without punishment D. Offboarding E. Progressive disciplinary action
Answers
Answer:
C. Disciplinary action without punishment
Explanation:
The act of giving a worker time off to rethink and re-adequate his course of action without suspending payments is called disciplinary action without punishment, which is an effective form of positive reinforcement and usually accompanied by reminders, recommendations and discussions between the employee and the administration.
Mikkelson Corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%.
Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged.
What is the company's new required rate of return?
(Hint: First calculate the beta, then find the required return.) Do not round your intermediate calculations.
a. 16.50%
b. 13.04%
c. 12.87%
d. 12.71%
e. 14.36%
Answers
Answer:
a. 16.50%
Explanation:
Find the beta as of last year using CAPM;
CAPM ; r = risk free + beta(Market risk premium)
0.125 = 0.03 + beta(0.0475)
Subtract 0.03 from both sides;
0.125-0.03 = 0.0475beta
0.095 = 0.0475beta
Divide both sides by 0.0475;
0.095/0.0475 = beta
beta = 2
Next, use CAPM again to find the new required return with a market risk premium is 4.75%+ 2% = 6.75%
r = 0.03 + 2(0.0675)
r = 0.03 + 0.135
r = 0.165 or 16.5%
Therefore, the new required return is 16.5%
Nance Corporation’s December 31, 2017 balance sheet showed the following: 6% preferred stock, $20 par value, cumulative, 30,000 shares authorized; 20,000 shares issued $ 400,000 Common stock, $10 par value, 3,000,000 shares authorized; 1,950,000 shares issued, 1,920,000 shares outstanding 19,500,000 Paid-in capital in excess of par value – preferred stock 60,000 Paid-in capital in excess of par value – common stock 28,000,000 Retained earnings 9,650,000 Treasury stock (30,000 shares) 630,000 Nance declared and paid a $90,000 cash dividend on December 15, 2017. If the company’s dividends in arrears prior to that date were $24,000, Nance’s common stockholders received $66,000. $53,000. $42,000. no dividends.
Answers
Nance Corporation's common stockholders received $42,000 in dividends on December 15, 2017.
Explanation:The question asks how much Nance Corporation's common stockholders received in dividends on December 15, 2017 after taking into account the preferred stock dividends in arrears. To compute this, we first need to determine the dividend payout for the preferred stocks. Since the corporation has a 6% preferred stock with a par value of $20, the annual dividend per share for the preferred stocks is 6% x $20 = $1.20. Given that 20,000 shares were issued, the total annual dividend for preferred stock is $1.20 x 20,000 shares = $24,000. Taking into account the $24,000 dividends in arrears, we get a total of $24,000 + $24,000 = $48,000 to be paid to preferred stock holders.
Subtracting this from the total cash dividend declared of $90,000, we find that the common stockholders received $90,000 - $48,000 = $42,000 in dividends. The answer is $42,000.
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Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
Beginning cash balance on June 1, $94,400.
Cash receipts from sales, $415,000.
Budgeted cash payments for purchases, $270,000.
Budgeted cash payments for salaries, $95,400.
Other budgeted cash expenses, $57,400.
Cash repayment of bank loan, $32,400.
Budgeted depreciation expense, $34,400.
Answers
Answer:
The ending cash balance on the month ended June 30 cash budget: $54,200
Explanation:
Ending cash balance = Beginning cash balance + Cash flow in - Cash flow out
In the company:
Cash flow in = Cash receipts from sales = $415,000
Cash flow out = Cash payments for purchases + Cash payments for salaries + Other cash expenses + Cash repayment of bank loan = $270,000 + $95,400 + $57,400 + $32,400 = $455,200
Ending cash balance = $94,400 + $415,000 - $455,200 = $54,200
Note: Depreciation is a non-cash accounting expense, so it doesn't involve cash flow.
Saks is expected to pay a dividend in year 1 of $1.80, a dividend in year 2 of $2.12, and a dividend in year 3 of $2.69. After year 3, dividends are expected to grow at the rate of 8% per year. An appropriate required return for the stock is 11%."
What should the stock price be worth after three years?
Answers
Answer:
$96.84
Explanation:
The computation of the stock price after three years are shown below:
= (Third-year dividend × growth rate) ÷ (Required rate of return - growth rate)
= ($2.69 × 1.08) ÷ (11% - 8%)
= ($2.9052) ÷ (3%)
= $96.84
The growth rate equal to
= 1 + growth rate
= 1 + 8%
= 1.08
We simply apply the growth model so that the after three years stock price can be correctly computed
Final answer:
The stock price after three years is calculated using the Dividend Discount Model for a perpetuity, considering the given dividends and expected growth rate, resulting in a value of $96.12.
Explanation:
The question asks to calculate the worth of a stock after three years, given the dividends for the first three years and an expected perpetual growth rate thereafter. The dividends for year 1 are $1.80, year 2 are $2.12, and year 3 are $2.69. After year 3, dividends are expected to grow at a rate of 8% per year indefinitely. The required return for the stock is 11%. To find the stock price after three years, we will use the Dividend Discount Model (DDM) for a perpetuity which considers the dividend growth. The formula for the value of the stock at the end of year 3, which is before applying the growth rate in year 4, is: P3 = D3 * (1 + g) / (r - g), where P3 is the stock price at the end of year 3, D3 is the dividend in year 3, g is the growth rate (8%), and r is the required return (11%). Substituting the given values: P3 = $2.69 * (1 + 0.08) / (0.11 - 0.08) = $2.69 * 1.08 / 0.03 = $96.12. Therefore, the stock should be worth $96.12 after three years.
The Hot Dog Shack wants to raise $1.2 million by selling some coupon bonds at par. Comparable bonds in the market have a 6.5 percent annual coupon, 15 years to maturity, and are selling at 97.687 percent of par. What coupon rate should The Hot Dog Shack set on its bonds?
Answers
Answer:
6.75%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
This is correct Present value = $976.87
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 6.5% = $65
NPER = 15 years
The formula is shown below:
= Rate(NPER,PMT,-PV,FV,type)
The present value come in negative
So, after solving this, the answer would be 6.75%
On January 1, Swifty Corporation had 63,100 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 18,900 additional shares of common stock for $12 per share. June 15 Declared a cash dividend of $1.90 per share to stockholders of record on June 30. July 10 Paid the $1.90 cash dividend. Dec. 1 Issued 8,400 additional shares of common stock for $13 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.10 per share to stockholders of record on December 31. (a) Prepare the entries, if any, on each of the three dates that involved dividends
Answers
Final answer:
The entries for dividends involve recording the declaration and payment of dividends on June 15 and July 10 for the first dividend, and another declaration on December 15 for the second dividend, accounting for the total shares outstanding at each date including new share issues.
Explanation:
To prepare the journal entries for the dates involving dividends for Swifty Corporation, we need to record the declaration of the dividends and the payment of the dividends.
June 15: Declaration of Cash Dividend
Retained Earnings Debit: 63,100 shares x $1.90 per share = $119,890Dividends Payable Credit: $119,890This entry recognizes the declaration of a $1.90 per share dividend to be paid on July 10.
July 10: Payment of Cash Dividend
Dividends Payable Debit: $119,890Cash Credit: $119,890This entry represents the actual payment of the dividend declared on June 15.
December 15: Declaration of Cash Dividend
Before we record the December dividend, note the increase in shares from the April and December stock issues:
Initial shares: 63,100April 1 issue: 18,900December 1 issue: 8,400Total shares by December 15: 63,100 + 18,900 + 8,400 = 90,400 sheetsRetained Earnings Debit: 90,400 shares x $2.10 per share = $189,840Dividends Payable Credit: $189,840This entry is to record the declaration of a $2.10 per share dividend to stockholders of record on December 31.
Henry Hobbs, age 51, has compensation of $72,000. The normal retirement age for his 457(b) plan is age 62. Henry has unused deferrals totaling $21,000 as of January 1, 2019. How much can Henry defer into his 457(b) public plan for 2019?
Answers
Answer:
Henry's maximum amount defer in public plan is = $25000.
Explanation:
given data
age = 51
compensation = $72,000
normal retirement age = 62
unused deferrals totaling = $21,000
to find out
How much can Henry defer into his 457(b) public plan for 2019
solution
we know that as per plan 457(b) is an Employer sponsored
and tax favored retirement savings account
so here in 2019 Employees can contribute = upto $19000
and
Employees over age = 50
he can contribute additional = $6000
and making maximum contribution limit = $25000
so here
Henry's maximum amount defer in public plan is = $25000
Wright Services, Inc., has $ 8 comma 800 cash on hand on August 1. The company requires a minimum cash balance of $ 7 comma 400. August cash collections are $ 548 comma 400. Total cash payments for August are $ 563 comma 380. Prepare a cash budget for August. How much cash, if any, will Wright need to borrow by the end of August?
Answers
Answer:
- $13,580
Explanation:
The preparation of the cash budget for August month is shown below:
Cash on Hand on August 1 $8,800
Add: August cash collections $548,400
Total cash available $557,200
Less: Total cash payments - $563,380
Ending cash balance - $6,180
Less: Minimum cash balance - $7,400
Borrowed amount - $13,580
At GetHelp Inc., after customer service representatives complete training, their phone calls are monitored to determine if they are applying the lessons about gathering pertinent information from callers. This evaluation best exemplifies a _____ measure.
Answers
Answer:
This evaluation best exemplifies a "behavior-level" measure.
Explanation:
Donald Kirkpatrick proposed a Four-level training evaluation model for evaluating the impact of training on employees.
The four levels are; Reaction, Learning, Behavior and Results.
The behavior level of Kirkpatrick's model is the third stage and it comes after employees have undergone learning/training. At this stage, the behavior is measured through monitoring and observation to determine if they are implementing what they have learnt.
This gives some insight into how effective the training was.
Therefore GetHelp Inc. by monitoring the phone calls of their customer service representatives are carrying out a "behavior-level" measure.