Consider three mutually exclusive projects (A, B, and C)
Cash Flows A B C
First Cost 1,850.00 $1,850.00 $1,900.00
Uniform annual benefit $90.00 315.00 325.00
Salvage value 135.00 405.00 $360.00
Useful life, in years 6 7 8
When each project reached the end of its useful life, it would be sold for its salvage value and there would be no replacement. Plot the net present worth (NPW) of each project on the same chart with interest rates ranging from 0% to 25%
Answers
Answer:
Assuming a range of interest rates 0%, 5%, 10%, 15%, 20%, 25%
The below listed are the Net present Values
Project A
1,175
1292
1382
1451
1505
1549
Project B
760
261
-100
-387
-602
-769
Project C
1,110
494
52
-274
-519
-708
The Net Present Value of a project is the evaluation of a project Net Cash flows based on time value of money and bench-marked against the required rate of return the business considers minimum.
The attached document shows the detailed answer for your review
+
+
Related Questions
Identify which control activity is violated in each of the following situations. Control Activity 1. Once a month, the sales department sends sales invoices to the accounting department to be recorded. 2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise. 3. Several clerks at Great Foods use the same cash register drawer.
Answers
Answer:
The control activity violated in each
situation is given below in the explanation
Explanation:
1). Once a month, the sales department sends sales invoices to the accounting department to be recorded---- Control activity violated is the Documentation procedures
Because Documents provide evidence that transactions have occurred.And since this occurs constantly in a buisness, Source documents for accounting entries should not be done only one a month but be promptly sent to the accounting department to ensure timely recording of all transactions
2) Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise---- Control activity violated is in the Segregation of duties.
Here, the responsibility for related activities should be assigned to different individual to prevent errors and irregularities. The responsibility for record keeping for ordering merchandise should be separate from the authorization of payment of the merchandise.
3. Several clerks at Great Foods use the same cash register drawer.-------Control activity violated is in the
Establishment of responsibility.
-----Establishment of Responsibility is a very important characteristic of buisness and therefore should be assigned to specific individual not many people at once especially in the authorization of transaction or handling of cash registers.
Pease Answer ASAP. I need help with sources to answer the following question:
Does having a collage degree give you a higher income classification?
Answers
Answer:
No, a college degree can help you earn a better salary but nothing is guaranteed. For example, someone with a college degree earns on average around $50,000 per year, while those with only a high school degree earn around $28,000 (that is almost half of a college graduate).
But the salary you earn is not guaranteed, it might be much higher or it might be zero. If you work hard you might get a raise pretty soon or you can get promoted, but if you are lazy then you can get fired.
The income classification is based on income, not on education. There are people who never graduated from college that are extremely rich, e.g. Bill Gates, Mark Zuckerberg, but they are not the majority. That is why they serve as examples so often. Most rich people actually do have a college degree, but they are rich not because of their college degree, but because of their work.
1. The monthly market shares of General Electric Company for 12 consecutive months follow. Develop three-month and four-month moving averages for this time series. Comparing the three-month and the four-month moving average, which one provide the better forecasts based on MSE? Explain your reasoning.
Answers
Answer:
MSE for 3-month MA = 0.0790
for 4-month, it is 0.066
Hence, 4-month MA is better.
Explanation:
In statistics, the mean squared error, MSEor mean squared deviation (MSD) of an estimator that is of a procedure for estimating an unobserved quantity, measures the average of the squares of the errors, that is, the average squared difference between the estimated values and the actual value.
This is used to ascertain the preferred or better forecast from 2 or more given parameters.
Kindly check the attachment for the step by step explaination of the MSE forecast.
Final answer:
The question involves calculating the three-month and four-month moving averages for General Electric Company's monthly market shares and determining which average provides better forecasts by comparing their Mean Square Errors.
Explanation:
The question involves applying moving averages, a statistical technique used extensively in time series analysis, to the monthly market shares of General Electric Company. To start, three-month and four-month moving averages will be calculated by taking the average of every three and four consecutive months respectively. This method smooths out short-term fluctuations and highlights longer-term trends or cycles. Calculating these moving averages and then comparing their Mean Square Error (MSE) will help in determining which moving average provides a better fit or more accurate forecast of the data. The MSE is calculated by taking the average of the squares of the errors, which are the differences between the actual values and the values predicted by the model. A lower MSE indicates a better fit to the data. Without the actual data provided in the question, specific calculations cannot be performed in this response.
In essence, if one aims to remove or reduce the impact of seasonal variations and better understand underlying trends in time series data, moving averages can be a powerful tool. The decision between using a three-month or four-month moving average would depend on which provides a lower MSE, indicating it is better at forecasting or smoothing the data while minimizing the error between the predicted and actual values.
Using the information below, calculate net cash flows from financing activities. Net income $ 120,000 Receive cash from issuing stock 80,000 Pay cash for equipment 90,000 Increase in accounts receivable 10,000 Depreciation expense $ 30,000 Increase in accounts payable 5,000 Receive cash from sale of land 75,000 Pay cash dividends 20,000 Multiple Choice $60,000. $80,000. $100,000.
Answers
Final answer:
To calculate net cash flows from financing activities, we add up the cash inflows and subtract the cash outflows related to financing activities.
Explanation:
To calculate net cash flows from financing activities, we need to consider the cash inflows and outflows related to financing activities. In this case, the cash inflows include the cash received from issuing stock and the cash received from the sale of land, which amount to $80,000 and $75,000 respectively. The cash outflows include the cash paid for equipment and the cash paid as dividends, which amount to $90,000 and $20,000 respectively.
Therefore, the net cash flows from financing activities can be calculated as follows:
(Cash inflows - Cash outflows) = ($80,000 + $75,000) - ($90,000 + $20,000) = $145,000 - $110,000 = $35,000.
Hence, the correct answer is $35,000.
Jebali Corporation, a calendar year taxpayer utilizing the completed contract method of accounting, constructed a building for Samson, Inc., under a long-term contract. The gross contract price was $2,300,000. Jebali finished construction in 2019 at a cost of $2,100,000. However, Samson insisted that Jebali redo the doorway; otherwise, the contract price would be reduced. The estimated cost of redoing the doorway is $80,000. In 2020, the dispute is settled and Jebali fixed the doorway at a cost of $65,000. a. How much must Jebali include in gross income
Answers
Answer:
Jabeli must include = $2,220,000
Explanation:
As per the data given in the question,
Gross Income in 2019 = $2,300,000 - $80,000
= $2,220,000
So, Jabeli should include $2,220,000 in gross income and Jabeli is allowed to deduct $2,100,000 in 2019
In completed contact method of accounting :
Till the contract is completed and accepted, no revenue from the contract is recognized
In this case the purchaser may desire additional work to be done on a long term contract.
The regulations do not provide any amount of income(or loss) until the dispute is resolved.
Ellen Kelly Inc. had 31,300 shares of $.50 par common stock 10,000 shares of 5%, $20 par cumulative preferred stock and 5,000 shares of 5%, $10 par preferred stock convertible into 3,800 common shares. Net income after taxes was $55,779. No dividends were declared during the year. The numerator in the Diluted EPS would be $________
Answers
Answer:
10,000 common stock.
The EPS = earnings per share = Earnings before tax divided by outstanding common stock in issue
A company has some bottling equipment which cost $8.2 million, has a net book value of $3.8 million, estimated future cash flows of $3.55 million, and a fair value of $2.95 million. How much is the asset impairment loss
Answers
Answer:
The impairment loss of assets amounts to $0.85 million
Explanation:
Asset impairment incur when there is decrease or fall in the fair value of the asset below the recorded cost or net book value of the assets. It is the difference among the assets carrying value and fair value.
The impairment loss of assets is computed as:
Impairment loss of assets = Net book value of asset - Fair value of the asset
where
Net book value of asset amounts to $3.8 million
Fair value of the asset amounts to $2.95 million
So, putting the values above:
Impairment loss of assets = $3.8 million - $2.95 million
Impairment loss of assets = $0.85 million
1. A county acquires equipment for $16,000,000 at the beginning of 2015. The equipment has an 8-year life, no residual value. At the beginning of 2021 (6 years later), the equipment is sold for $9,000,000. Use straight-line depreciation, if appropriate. The equipment is used for general operations and is reported in the general fund. What is reported in the general fund's operating statement, related to this equipment, in 2015? A. Expense of $16,000,000 B. The equipment is not reported in the operating statement C. Expense of $2,000,000 D. Expenditure of $16,000,000
Answers
Answer:
Is reported a Depreciation expense of $ 2,000,000 in the general fund's operating statement, related to this equipment, in 2015. The right answer is C
Explanation:
According to the given data we have the following:
equipment cost at the beginning of 2015=$16,000,000
equipment useful life=8-year
Therefore in order to to calculate what is reported in the general fund's operating statement, related to this equipment, in 2015 we would have to calculate the straight line depreciation with the following formula:
Straight line depreciation =( Cost - salvage value ) / useful life
Straight line depreciation = ( $16,000,000-0 ) / 8
Straight line depreciation =$ 2,000,000
Therefore, is reported a Depreciation expense of $ 2,000,000 in the general fund's operating statement, related to this equipment, in 2015
Answer:
C). Expense of $2,000,000
Explanation:
Straight line depreciation =
( Cost - salvage value ) / useful life
( 16,000,000-0 ) / 8 = 2,000,000
Henry Crouch's law office has traditionally ordered ink refills 55 units at a time. The firm estimates that carrying cost is 40% of the $11 unit cost and that annual demand is about 235 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal? a) For what value of ordering cost would its action be optimal? Its action would be optimal given an ordering cost of $___________per order (round your response to two decimal places)
Answers
Answer:
Its action would be optimal given an ordering cost of $28.31 per order
Explanation:
According to the given data we have the following:
economic order quantity, EOQ= 55 units
annual demand, D=235
holding cost per one unit per year, H=40%×$11=$4.4
ordering cost, S=?
In order to calculate the ordering cost we would have to use the following formula:
EOQ=√(2×D×S)
(H)
Hence, S=(EOQ)∧2×H
2×D
S=(55)∧2×4.4
2×235
S=13,310
470
S=$28.31
Its action would be optimal given an ordering cost of $28.31 per order
Its action would be optimal given an ordering cost of $28.32 per order.
a. Ordering cost
First step is to calculate the carrying cost
Carrying cost= 11x40%
Carrying cost=4.4
Second step is to calculate the ordering cost
Ordering cost=Order unit^2(Carrying cost)/2(Annual demand)
Ordering cost=55^2(4.4)/2(235)
Ordering cost=13,310/470
Ordering cost=$28.32
b. If the true ordering cost turns out to be much less than your answer to part (a). The impact on the firm's ordering policy is to reduce the order quantity.
Learn more here:
https://brainly.com/question/17191894
Your professor moonlights to make ends meet during the summer months and has a knack for painting houses. You agree to pay $500 over whatever the materials and equipment rental cost for the job and delight in sipping lemonade in the shade watching your poor professor perform under a(n) ________.
A) Time and material contract.
B) Fixed wage contract.
C) Cost-plus contract.
D) Lump-sum contract.
Answers
Answer: Cost plus contact
Explanation:
A cost-plus contract is a form of contract whereby the contractor is paid for all of its allowed expenses including additional payments in order to allow for a profit.
A cost plus contract is usually used when the quality, delivery time and performance is of more importance than the cost. In cost plus contract, the final cost may be smaller than the fixed cost because the contractors don't usually inflate price and also as a result of lesser price competition.
A cost price contract also gives more room for control and oversight over a contractors work and is also flexible which gives room for specification changes.
The correct answer is a Cost-plus contract, where the customer pays an amount over the actual costs of materials and labor. This type of contract provides flexibility and compensates for unpredictable expenses in a project. Hence the correct option is C.
Cost-plus contract. In a cost-plus contract, the customer agrees to pay the contractor an amount over the actual cost of materials and labor. In the scenario described, you are paying your professor $500 over the cost of materials and equipment rental, which is a typical arrangement in a cost-plus contract agreement. The professor's payment is not fixed (which rules out B and D) and does not solely depend on the time and materials without the additional fixed sum (which rules out A). Cost-plus contracts are common in situations where it's difficult to estimate the total cost of a project ahead of time. They offer a degree of flexibility for the contractor, as they can be reimbursed for all legitimate expenses on the job, plus an agreed-upon fee that represents their profit. Such a format is beneficial when specific details or potential complications of a job cannot be predicted in advance.
The Chem-Tex Chemical company is considering two additives for improving the dry-weather stability of its low-cost acrylic paint. Additive A will have a first cost of $110,000 and an annual operating cost of $60,000. Additive B will have a first cost of $175,000 and an annual operating cost of $35,000. If the company uses a three-year recovery period for paint products and a MARR of 20% per year, which process is favored on the basis of an incremental rate of return analysis?
Answers
Answer:
The preferred process is that with lower cost which is Additive A with a PV cost of $236,388.89
Explanation:
To determine the preferred process , we compare the present value of the two alternatives and select the lower of the two two cost.
This will be done as follows
Alternative one
Total PV = First payment + PV of annual operating cost
PV of Annuity =A × (1-(1+r)^(-n)/r
A- annual operating cost, r- 20%, n=3
PV of operating cost
= 60,000 × (1- 1.2^(-3))/0.2
= $126,388.89
Total PV = $110,000 + $126,388.89
= $236,388.89
Alternative Two
PV of operating cost
= 35,000 × (1-1.2^(-3))/0.2
= 73,726.85
Total PV = $175,000 + $73,726.85
= $248,726.85
The preferred process is that with lower cost which is Additive A with a PV cost of $236,388.89
In 2020, Sheridan Company, issued for $102 per share, 94000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Sheridan's $25 par value common stock at the option of the preferred stockholder. In August 2021, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock?
Answers
Answer:
$2,538,000
Explanation:
Paid in capital in excess of par-common stocks= $102*94,000-94000*3*25=$2,538,000
The preference shares were valued at $102*94,000 less the amount of common stocks issued at par (94,000*3*25) for conversion of preference stocks to common stocks will give paid in capital in excess of par for common stocks.
The excess amount is also called share premium paid.
Bubbles Inc. produces gummy bears. The company purchases raw materials, stores them in warehouse, and then runs them through two processes: production and packaging. During September, the production process incurred the following costs in processing 20,000 gummy bears Wages of workers operating production equipment$56,500 Manufacturing overhead allocated to the production department Direct materials 8,500 135,000.
Use the FIFO method to compute the September conversion costs in the Production Department.
A) $8,500
B) $200,000
C) $56,500
D) $65,000
Answers
Answer:
D. $65,000
Explanation:
Data provided
Direct labor = $56,500
Manufacturing overhead = $8,500
The computation of Conversion costs is shown below:-
Conversion costs = Direct labor + Manufacturing overhead
= $56,500 + $8,500
= $65,000
Therefore for computing the conversion cost we simply add the direct labor with manufacturing overhead.
Final answer:
The conversion costs for Bubbles Inc. in September, calculated as the sum of labor ($56,500) and manufacturing overhead ($135,000), total $191,500. This answer does not match any of the given options.
Explanation:
To calculate September's conversion costs in the Production Department we will use the FIFO method for Bubbles Inc., which produces gummy bears. Conversion costs include labor and manufacturing overhead costs but do not include direct materials. In this case, the conversion costs would be the sum of the wages of workers operating production equipment ($56,500) and the manufacturing overhead allocated to the production department ($135,000).
To find the total conversion costs, we simply add these two amounts together:
Wages of Workers: $56,500Manufacturing Overhead: $135,000Total Conversion Costs = $56,500 + $135,000 = $191,500.
Based on the information provided and the typical definition of conversion costs, the correct calculation of conversion costs is not listed among the options A) $8,500, B) $200,000, C) $56,500, D) $65,000.
If the pound sterling appreciates against the U.S. dollar, England buys _____ U.S. goods, causing the U.S. aggregate demand curve to shift to the _____. more; left fewer; right fewer; left more; right
Answers
Answer: More, Right
Explanation:
Appreciaton of a currency means the value of the currency has increased. When the pound sterling appreciates against the United States dollar, England will buy more of the products in the United States because the goods are cheaper when compared to their own currency.
Due to the increase in the United States product bought by England, the aggregate demand curve of the United States shifts to the right. The shift to the right of the aggregate demand curve shows that there is an increase in demand.
On January 2, 2020, a calendar-year corporation sold 8% bonds with a face value of $2510000. These bonds mature in five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $2316000 to yield 10%. Using the effective-interest method of computing interest, how much should be charged to interest expense in 2020
Answers
Answer:
$231,600
Explanation:
In effective interest rate method, the interest expense is calculated on the the beginning Book value of the bond and market interest rate. Deducting the coupon payment from this value we get the amortization value of discount given on the issuance of bond
Interest Expense = Book value of the bond x Market rate = $2,316,000 x 10% = $231,600
Coupon Payment = Face value x coupon rate = $2,510,000 x 8% = $200,800
Discount Amortization = Interest Expense for the period - Coupon Payment = $231,600 - $200,800 = $30,800
$200,800 interest will be paid, Discount will be amortized by $30,800, and total expense of $231,600 will be charged as interest expense.
The annual demand for a product is 14,500 units. The weekly demand is 279 units with a standard deviation of 85 units. The cost to place an order is $32.00, and the time from ordering to receipt is six weeks. The annual inventory carrying cost is $0.20 per unit. a. Find the reorder point necessary to provide a 95 percent service probability. (Round your answer to the nearest whole number.) Reorder point b. Suppose the production manager is asked to reduce the safety stock of this item by 55 percent. If she does so, what will the new service probability be?
Answers
Answer:
a) 2082 units
b) 0.6923
Explanation:
a) Recorder point
Lead time = 6 weeks
Expected demand during this time is 6*279 = 1674 units
Standard deviation = 85 units
Standard deviation for the 6 week period is 85 units* 6^0.5 = 208 units
At the 95% probability level, the z-score is 1.96 (look up on table)
Safety Stock = 1.96×208 units = 408 units
Recorder point = Safety stock + expected demand during the time period so,
1674 + 408 = 2082 units
b) 45% of 408 is about 184, so using the safety stock formula:
Safety Stock = X*180 = 184
X is your z-score which comes out to about 1.02. Look up on your table and correspond to the probability value.
p-value = 0.6923
What is the purpose of a study
Answers
Answer:
Stephen Kim, a Korean-American highschool student says, "The purpose of studying is 50% for survival and 50% out of interest, passion, and curiosity."
Explanation:
No study = poor paying job or no money. No money = no food, water because money is your trading token to get anything in this world.
The world is based off of money and the ammount of money you make is from your educaiton. It sucks but what are you going to do about it?
What's the purpose of living without happienss? That's why you study 50% because of passion, curisoity, or etc. What would happen if I go inside the black hole? Study science and build something and get in there.
What is North Korea like? Study politics and econmoics and go undercover to see what's it's like.
I want an ironman suit to fight crime and protect this world against violent people. Study engineering and physics and build one.
You study half for survival and half out of curisity, interest, and passion.
Suppose you found out that the Japanese are on the verge of introducing their own mayonnaise substitute next month. Sam does not know this and has just turned down your final offer for the insurance. Assume that Sam tells you SCAM is only six months away from perfecting its mayonnaise substitute and that you know what you know about the Japanese. Would you raise or lower your policy premium on any subsequent proposal to Sam? Based on his information, would Sam accept? A. You would raise your policy premium substantially and Sam would not accept because he doesn't know about the Japanese. B. You would raise your policy premium substantially and Sam would accept because the higher premium would signal there was a greater chance of a loss. C. You would not offer Sam a policy at any premium because given the new information, Sam will almost certainly sustain a loss.
Answers
Answer: A. You would raise your policy premium substantially and Sam would not accept because he doesn't know about the Japanese.
Explanation:
In such a scenario as the one described above, the best option as an Insurance Agent is indeed to raise premiums substantially.
As the Japanese will most probably get to market first with the new Mayonnaise Substitute, they will have the rights to it's invention and could even patent it.
This means that Sam and SCAM will most likely suffer a loss as a result of this.
As there is such a high chance of loss, charging a substantially higher premium to enable coverage is only logical and makes business sense.
Sam does not know however that the Japanese are so far ahead and having rejected a substantially lower offer, will reject the newer, substantially higher one as well.
Sheffield Corp. sold some of its plant assets during 2021. The original cost of the plant assets was $904000 and the accumulated depreciation at date of sale was $843000. The proceeds from the sale of the plant assets were $90800.
The information concerning the sale of the plant assets should be shown on Sheffield's statement of cash flows (indirect method) for the year ended December 31, 2021, as a(n):
A) subtraction from net income of $29,800 and a $61,000 increase in cash flows from financing activities.
B) addition to net income of $29,800 and a $90800 increase in cash flows from investing activities.
C) subtraction from net income of $29,800 and a $90800 increase in cash flows from investing activities.
D) addition of $90800 to net income.
Answers
Answer:
The correct answer is Option C.
Explanation:
In the indirect cash flows statement, there are 3 sections, namely: net cash flows from operating activities, net cash flows from investing activities and net cash flows from financing activities.
The items in the question only affect the first two. Under the net cash flows from operating activities, we need to subtract the gain realized from the disposal of the plant assets from net income, which is Sales proceed minus Net book value, i.e., $90,800 - ($904000- $843000) = $29,800.
The sales proceed is $90,800. This would be recognized as cash inflow under net cash flows from investing activities.
Joan, is a jewelry designer who had created a unique new jewelry piece called a neacklet. It can be either a necklace or a bracelet. She would like to start her own business, but is not sure which form would suit her needs. She is very concerned about keeping control of her designs but has no capital except a small business loan. An older gentleman who owns his own jewelry store is eager to retire but has no buyers for his business. He has offered Joan a partnership with a chance for her to buy him out later. NewJewelry a large jewelry franchise who sells to the Home Shopping Network has offered Joan a chance to buy into their franchise and they will trademark and patent her design as part of their jewelry line. Joan comes to you to ask your advice. What would you tell her and why? Make sure that you explain the advantages and disadvantages of every business opportunity.
Answers
Answer and explanation:
In Joan's case, a general partnership will provide her control over her business that will be shared with the older gentleman who owns a jewelry store. Profits would be distributed evenly regardless of the contribution of each partner in the business. However, the older gentleman has offered Joan the chance of purchasing his share later on which would provide her the total control of the business and the patent of her creation.
The other option Joan has available is purchasing a franchise. This will allow Joan to avoid the initial costs of introducing her products to the market and the risks of not having enough consumers since her brand name is new. Though she will lose access to the patent of her creation and periodically Joan will need to pay NewJewelry a fee for using its name.
Therefore, as Joan prefers to have control over her designs, it would be more convenient for her to choose the general partnership.
Many factors determine how much debt a firm takes on. Chief among them ought to be the effect of the debt on the value of the firm. Does borrowing create value? If so, for whom? If not, then why do so many executives concern themselves with leverage?
Answers
Answer: Yes, borrowing creates value for equity shareholders. This is mainly as a result of tax benefits of interests paid on borrowings
Explanation:
Yes, borrowing does create value for the equity shareholders, this is mainly as a result of tax benefit of interests paid on borrowings.
If leverage causes changes, then it should lead to changes in either the discount rate of the firm(which is weighted-average cost of capital) or changes in the cash flows of the firm.
Leverage causes changes in both discount rate (WACC) and not on the cash flows to the firm. Since, WACC is known as the weighted average of cost of debt and cost of equity and since the cost of debt is usually less than the cost of equity, the WACC decreases with increase in borrowings, when the equity beta does not change. Furthermore, as the cash flows to firm is calculated before the interests paid on borrowings, the increased borrowings wont affect the Value of asset (FCFF) .
Cash flow is discounted at the rate that is consistent with the risk of those cash flow. At the cost of capital for the unlevered firm, pure businesses should be discounted. Financing flow needs to be discounted at the rate of return required by the provider of debts.
Answer:
Borrowing creates value for the firm. The use of borrowed funds can affect the firm positively or negatively, because of the higher level of risk, therefore it is imperative that the executives concern themselves.
Explanation:
The use of financial leverage can make or break the company as there are many risks involved, one being the repayment of the principal amount with interest, regardless of whether the firm made a profit or not by using those funds. Value is created by the firm if they use financial leverage as funds are used to pay for operations and generate an income, and, if successful – make a profit. “At an ideal level of financial leverage, a company’s return on equity increases because the use of leverage increases stock volatility, increasing its level of risk which in turn increases returns. If earnings before interest and taxes are greater than the cost of financial leverage than the increased risk of leverage will be worthwhile.” (Lumen Boundless Finance, 2020)
The liquidity (ability to pay for short term debts) and solvency (ability to pay for all debts) of a company is measured by the company’s use of leverage and its survival after that. This is why shareholders and management must check these ratios often and keep them at a positive position.
10. Dixon Construction Company was awarded a contract to construct an interchange at the junction of U.S. 94 and Highway 30 at a total contract price of $15,000,000. The estimated total costs to complete the project were $12,000,000. (a) Make the entry to record construction costs of $7,200,000, on construction in process to date. (b) Make the entry to record progress billings of $4,000,000. (c) Make the entry to recognize the profit that can be recognized to date, on a percentage-of- completion basis.
Answers
Answer:
Journal Entry
Explanation:
Books of (Dixon Construction Company)
Journal Entry
Date Account Title and Explanation Debit Credit
A. Construction in process A/c Dr. $7,200,000
Cash / Accounts payable A/c $7,200,000
(Being construction cost paid)
B. Accounts receivables A/c Dr. $4,000,000
Billing in progress A/c $4,000,000
(Being record of billing in progress)
C. Construction expenses A/c Dr. $7,200,000
Construction in process A/c Dr. $1,800,000
Revenue from construction A/c $9,000,000
(Being income generate from contract)
Note:
Revenue from construction = Total contract(Construction in process / estimated total costs to complete)
Revenue from construction = $15,000,000($7,200,000 / $12,000,000)
Revenue from construction = $9,000,000
Construction in process = Revenue from construction - Construction expenses
Construction in process = $9,000,000 - $7,200,000
Construction in process = $1,800,000
The journal entries involved will record the construction costs, billings progress, and recognising of profits by debiting and crediting the appropriate accounts. The profit is recognised on a percentage-of-completion basis, which involves calculating the percentage completion first.
Explanation:The subject is related to accounting process and entries in construction companies. The question involves distinct steps:
(a) To record construction costs of $7,200,000 on construction in process to date, an entry should be made debiting 'Construction In Process' account and crediting 'Cash' or 'Accounts Payable' by $7,200,000.
(b) To record progress billings of $4,000,000, an entry should be made debiting 'Accounts Receivable' and crediting 'Billings on Construction in Process' by $4,000,000.
(c) To recognize the profit on a percentage-of-completion basis, calculate the percentage completion first which is current year costs of $7,200,000 divided by total estimated costs of $12,000,000, which equals 60%. Then, calculate the total revenue recognised to date, which is 60% of total contract price ($15,000,000), equals $9,000,000. The journal entry would be to debit 'Construction in process' and credit 'Sales Revenue' for $9,000,000, and then to credit 'Costs of goods sold' and debit 'Construction in process' for $7,200,000.
Learn more about Accounting process in construction companies here:https://brainly.com/question/14898014
#SPJ3
The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department. The following budget has been prepared for the year. Available capacity 6,000,000 pages Budgeted usage: Marketing 3,600,000 pages Economics 1,800,000 pages Cost equation $120,000 $0.025 per page If the Copy Department uses a dual rate for allocating its costs based on usage, how much cost will be allocated to the Marketing Department
Answers
Answer:
The correct answer is $170,000.
Explanation:
According to the scenario, computation of the given data are as follows:
We can calculate the cost allocated to Marketing by using following formula:
Total cost allocated = Fixed cost + Variable cost
Where, Fixed cost = (3,600,000 ÷ 5,400,000) × $120,000
= $80,000
And , Variable cost = $0.025 × 3,600,000 = $90,000
By putting the value, we get
Total cost allocated = $80,000 + $90,000
= $170,000
Final answer:
The total cost allocated to the Marketing Department by the Copy Department at State University is $162,000, calculated by multiplying the department's budgeted usage of 3,600,000 pages by the total cost per page of $0.045.
Explanation:
To determine how much cost will be allocated to the Marketing Department by the Copy Department at State University, we first need to understand that a dual rate for allocating costs includes both fixed and variable costs. The fixed costs are given as $120,000, and the variable cost is $0.025 per page. The total available capacity is 6,000,000 pages, and the budgeted usage for Marketing is 3,600,000 pages, and for Economics, it's 1,800,000 pages.
We begin by calculating the fixed cost per page by dividing the total fixed costs by the available capacity. This is $120,000 / 6,000,000 pages = $0.02 per page. Next, we add the variable cost per page of $0.025 to the fixed cost per page of $0.02 to get a total cost per page of $0.045.
Then, we can calculate the total cost to be allocated to the Marketing Department by multiplying their budgeted usage of 3,600,000 pages by the total cost per page of $0.045. Therefore, the Marketing Department will be allocated 3,600,000 pages × $0.045 per page = $162,000.
The elasticity of output with respect to capital Group of answer choices is the inverse of the elasticity of output with respect to labor. is the increase in output resulting from an increase in the capital stock. is the percentage increase in output resulting from a 1 % increase in the capital stock. is always greater than one.
Answers
Answer:
cc
Explanation:
Johanna Springer, who works as a sales executive at Pascal's Bank, is upset at the way her manager, Emma Womack, always calls her in for one-on-one meetings to discuss her underperformance. Though Springer makes a higher number of sales calls and works longer hours than last year, her sales figures are still low. She knows that the main reason behind her underperformance is the recent economic meltdown in the country. However, her manager feels that Springer's underperformance is the result of her laid-back attitude and has nothing to do with external factors. In this situation, Womack's behavior is characterized by a(n) ____.
A. anchoring bias
B. contrast effect
C. fundamental attribution error
D. self-fulfilling prophecy
E. Pygmalion effect
Answers
Answer:
The correct answer is letter "C": fundamental attribution error.
Explanation:
The fundamental attribution error is a judgment individuals make about others in which they focus more on the others' inner characteristics than external situations at the moment of qualifying their behavior. The judgment is biased in such a case since it does not consider all the possible variables that can affect people's actions.
This judgment values more the type of person an individual could be rather than the environmental events that can influence on that individual.
IDS false alarms cause ________. 1. companies to ignore IDS alerts 2. companies to install multiple IDSs using different methods 3. Both companies to ignore IDS alerts and companies to install multiple IDSs using different methods 4. Neither companies to ignore IDS alerts nor companies to install multiple IDSs using different methods
Answers
Answer:
The correct answer is letter (1): companies to ignore IDS alerts.
Explanation:
An Intrusion Detection System (IDS) is a software destined for the detection of unauthorized access in devices or a network. The systems administrator can manage the recognition of an intruder thanks to an alert that is activated when such a thing happens.
The problem comes when false IDS alarms are repeated constantly. At a certain point, the system administrator might ignore the IDS alert but it is recommended that every single alarm be analyzed for a real or false possible threat.
Intrusion Detection Systems (IDS) false alarms can make companies ignore alerts due to frequent non-threat alerts (alarm fatigue) or compel them to install multiple IDSs using varied methods to reduce the occurrence of false alarms.
Explanation:IDS (Intrusion Detection Systems) false alarms can often lead to 1. companies ignoring IDS alerts, and 2. companies installing multiple IDSs using different methods. This is because false alarms can cause alarm fatigue, where the frequent occurrence of false alerts leads to complacency, making companies less likely to respond to genuine threats. On the other hand, in attempts to reduce the number of false alarms, companies could use various detection methods and opt for multiple IDS systems.
Learn more about IDS False Alarms here:https://brainly.com/question/33568350
#SPJ12
Below are a number of transactions that took place in Willie Corporation during the past year:
Indicate how each of them would be classified on a statement of cash flow by selecting the appropriate option from the dropdown provided under Activity and Cash inflow/Outflow. (If no option is suitable, select option "None".)
Options for Activity: Financing, Investing, None, or Operating
Options for Cash Inflow / Outflow: Cash Inflow, Cash Outflow, or None
ACTIVITY CASH INFLOW/OUTFLOW
A.) Common stock was sold for cash:
B. Equipment was sold for cash
C. A long term loan was made to a subsidiary
D. Interest was received on loan to subsidiary
E. Interest Payable, a curren liability, was reduced
F. A stock dividend was declared and issued on common stock
G. A building was acquired by issuing shares of common stock
H. Accrued Income Taxes, a current liability account, was reduced
I. Long term investments were sold
J. Cash dividends were declared and paid.
K. Preferred stock was sold for cash
L. Bonds were retired
M. Dividends were received on an investment
N. Equipment was purchased by giving a long term note to the seller
Answers
Answer:
A. Common stock was sold for cash: Financing
B. Equipment was sold for cash Investing
C. A long term loan was made to a subsidiary Investing
D. Interest was received on loan to subsidiary Investing
E. Interest Payable, a current liability, was reduced Operating
F. A stock dividend was declared and issued on common stock None
G. A building was acquired by issuing shares of common stock None
H. Accrued Income Taxes, a current liability account, was reduced Operating
I. Long term investments were sold Investing
J. Cash dividends were declared and paid. Financing
K. Preferred stock was sold for cash Financing
L. Bonds were retired Financing
M. Dividends were received on an investment Investing
N. Equipment was purchased by giving a long term note to the seller None
A company reported net income of $9,660,000 for the year. There were 4.1 million shares of common stock outstanding at the beginning of the year and 4.3 million shares outstanding at the end of the year. No dividends were declared during the year. What is the company’s earnings per share (EPS) for the year? (
Answers
THE COMPANY'S EARNING PER SHARE FOR THE YEAR WILL BE $2.30 PER SHARE.
Explanation:
FOR CALCULATING EARNING PER SHARE WE HAVE TO USED THE FOLLOWING FORMULA:
EARNING PER SHARE = [tex]\frac{NET INCOME}{AVERAGE OF COMMON STOCK}[/tex]
GIVEN:
NET INCOME = $9,660,000
NO. OF OUTSTANDING SHARE AT BEGINNING OF YEAR = 4,100,000
NO. OF OUTSTANDING SHARE AT END OF YEAR = 4,300,000
AS PER GIVEN FORMULA :
AVERAGE COMMON STOCK OUT STANDING = [tex]\frac{4,100,000+4,300,000}{2}[/tex] = 4200000 SHARES
NOW WE WILL FIND EARNING PER SHARE USING ABOVE FORMULA:
[tex]\frac{9,660,000}{4,200,000}[/tex]
EARNING PER SHARE = $ 2.30 PER SHARE
An engineer bought a $1000 bond of an American airline for $875 just after an interest payment had been made. The bond paid a 6% coupon interest rate semiannually. What nominal rate of return did the engineer receive from the bond if he held it 13.5 years until its maturity
Answers
Answer:
Number of coupon payments = 13.5*2= 27
Coupon = 6%*1000/2= 30
Let rate be r
Present value of all future payments = $87
875 = 30*(1-1/(1+r)^27)/r + 1000/(1+r)^27
R= 3.74%
Nominal rate = 3.74%*2 = 7.49%
The following information relates to the Magna Company for the upcoming year, based on 402,000 units. Amount Per Unit Sales $ 11,256,000 $ 28.00 Cost of goods sold 6,834,000 17.00 Gross margin 4,422,000 11.00 Operating expenses 482,400 1.20 Operating profits $ 3,939,600 $ 9.80 The cost of goods sold includes $1,380,000 of fixed manufacturing overhead; the operating expenses include $118,000 of fixed marketing expenses. A special order offering to buy 68,000 units for $16.95 per unit has been made to Magna. Fortunately, there will be no additional operating expenses associated with the order and Magna has sufficient capacity to handle the order. How much will operating profits be increased if Magna accepts the special order?
Answers
Answer:
Incremental income is $ 229,840
Explanation:
Computation of additional income
Incremental Revenues from the order 68,000 units at $ 16.95 $ 1,152,600
Cost of Goods sold
Existing Cost of Goods sold $ 6.834,000
Less: Fixed Manufacturing overhead $ 1,380,000
Variable cost of goods sold $ 5,454,000
Existing production units 402,000
Variable Cost of goods sold per unit 13.57 per unit
Incremental cost of goods sold 68,000 * $ 13,57 $ 922.760
Incremental income $ 229,840
No increase is considered in fixed manufacturing overhead since it is fixed and sufficient capacity is available for the order. No incremental operating expenses is also envisaged as per then info in the question