Answer:
Unit of Account
Store of Value
Medium of Exchange
Explanation:
Money can be exchanged for goods and services. Darnell exchanged money ($1299) for a computer. For money to be used as a medium of exchange, it should be generally recognised and accepted.
Money is a unit of account. Darnell compared the value of a vacation with that of a computer using their prices.
Money functions as a store of value. Money can be used to store wealth. Darnell kept his wealth (value) as money in his checking account. For money to be used as a store of value, it should be able to retain its value for a long time.
Dividends are: Multiple Choice payable at the discretion of a firm's president. treated as a tax-deductible expense of the issuing firm. paid out of aftertax profits.. paid only to preferred stockholders. only partially taxable to high-income individual shareholders.
Answer:
paid out of after tax profits
Explanation:
When the business organization earns net profit during the given period. It is compulsory to distribute the dividend to preference shareholders and the equity shareholders and if the company is suffering from the losses then no dividend would be declared
The priority is given to the preference shareholders over the equity shareholders
So, the after tax profits would be computed below:
= Total revenue - total expenses - income tax expense
13. Roy, the owner of Standard Business Company (SBC), sells SBC to Tim for a note payable to Roy for $100,000. Tim does not pay the note and files for bankruptcy under Chapter 7. The debt represented by the note is b. dischargeable if $100,000 now seems to be a high price for SBC. d. dischargeable under any circumstances. a. not dischargeable if Tim concealed assets to defraud Roy. c. not dischargeable under any circumstances.
Answer:not dischargeable if Tim concealed asset to defraud Roy
Explanation:
A bankruptcy is a legal means for a debtor used by the court to relieve him of his debts obligations when he his unable to fulfill it's debt obligations payment.
However finding out that the value of a contract initial agreed was overpriced will not make the debt dischargeable nor dischargeable in any circumstances unless it's proven that the debtors is unable to pay his debt.
The debt will equally not be dischargeable if it's found that the debtors has concealed items to defraud the creditor and it's equally dischargeable in some circumstances particularly when the debtors is unable to pay.
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2016, Lacy received the following information:Projected Benefit Obligation ($ in millions) Balance, January 1 $ 360 Service cost 60 Prior service cost 12 Interest cost(7.5%) 27 Benefits paid (37 ) Balance, December 31 $ 422 Plan Assets ($ in millions) Balance, January 1 $ 240 Actual return on plan assets 27 Contributions 2016 60 Benefits paid (37 ) Balance, December 31 $ 290 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2016. At the end of 2016, Lacy amended the pension formula creating a prior service cost of $12 million.Required:1. Determine Lacy's pension expense for 2016.Pension Expense :
Answer:
$63
Explanation:
Lacy's pension expense for 2016:
= Service cost + Interest cost - Expected return on the plan assets + Amortization of prior service cost + Amortization of net gain or net loss—AOCI
= $60 + $27 - ($27 actual - $3 gain) + $0 + $0
= $60 + $27 - $24
= $63
Note:
Since the amendment was at the end of the year, there is no amortization of prior service cost in 2016.
For which capital component must you make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC)?
a. Debt
b. Equity
c. Preferred stock
Omni Consumer Products Company (OCP) can borrow funds at an interest rate of 12.50% for a period of seven years. Its marginal federal-plus-state tax rate is 30%. OCP’s after-tax cost of debt is (rounded to two decimal places).
At the present time, Omni Consumer Products Company (OCP) has 20-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,382.73 per bond, carry a coupon rate of 13%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 30%. If OCP wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? (Note: Round your YTM rate to two decimal place.)
Answer:
1. Debt
2. 8.75%
3. 8.85%
4. 6.195%
Explanation:
For computing the tax adjustment, the Debt capital component is taken
The normal formula to compute WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
The computation of the pre-tax cost of debt and after-tax cost of debt is shown below:
1. The after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 12.50% × ( 1 - 0.30)
= 8.75%
The NPER represents the time period.
Given that,
Present value = $1,382.73
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 13% = $130
NPER = 20 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
3. The pretax cost of debt is 8.85%
4. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 8.85% × ( 1 - 0.30)
= 6.195%
When calculating a firm's WACC, a tax adjustment is made for the debt component. The after-tax cost of debt is calculated by multiplying the pre-tax cost of debt by one minus the marginal tax rate. Omni Consumer Products Company's after-tax cost of debt is 8.75% based on an interest rate of 12.50% and a tax rate of 30%. The YTM rate on OCP's existing bonds would be a reasonable estimate for its after-tax cost of debt if they want to issue new debt.
Explanation:When calculating a firm's weighted average cost of capital (WACC), you need to make a tax adjustment for debt component. The cost of debt is adjusted for taxes because interest payments made on debt are tax-deductible. To calculate the after-tax cost of debt, you need to multiply the pre-tax cost of debt by one minus the marginal tax rate.
In the case of Omni Consumer Products Company (OCP), they can borrow funds at an interest rate of 12.50%. To calculate the after-tax cost of debt, you would multiply 12.50% by (1 - 30%) = 0.7 to get 8.75% as the after-tax cost of debt for OCP.
If OCP wants to issue new debt, a reasonable estimate for its after-tax cost of debt would be the yield to maturity (YTM) rate on its existing bonds. The YTM rate is the rate of return anticipated on a bond if it is held until maturity and takes into account the bond's current market price, coupon rate, and time to maturity. So, the YTM rate on OCP's existing bonds would be a reasonable estimate for its after-tax cost of debt.
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Fame Company manufactures engines. Fame produces all the parts necessary for its engines, except for one electronic component, which is purchased from two local suppliers: Hydra International and Parable Company. Both suppliers are reliable and rarely deliver late. Hydra sells the component for $12.00 per unit, while Parable sells the same component for $10.00. Fame purchases 80% of its components from Parable because of the lower price it offers. The total annual demand is 95,000 units.
I. Activity Data
Activity Cost
Inspecting components (sampling only) $ 210,000
Reworking products (due to failed component) $2,454,000
Warranty work (due to failed component) $1,923,000
II. Supplier Data
Hydra Parable
International Company
Unit purchase price $12.00 $10.00
Units purchased 19,000 76,000
Sampling hours 60 2,600
Rework hours 150 3,800
Warranty hours 550 7,000
Suppose that Fame loses $3,500,000 in sales per year because of its reputation for defective units attributable to failed components. Using warranty hours, assign the proportional cost of lost sales to Parable Company. What is the increase in the cost per component? (Note: Round the lost sales per warranty hour and the cost of the component to two decimal places.)
The increase in the cost per component attributable to Parable Company is approximately $42.82.
To find the increase in the cost per component attributable to Parable Company, we'll follow these steps:
Determine the lost sales per warranty hour.
Calculate the proportional cost of lost sales for Parable Company.
Divide the proportional cost by the units purchased from Parable to find the increase in the cost per component.
Let's proceed with the calculations:
Step 1: Lost Sales per Warranty Hour
Lost Sales per Warranty Hour = [tex]\frac{Total \:Lost \:Sales}{Total \:Warranty\: Hours}[/tex]
Lost Sales per Warranty Hour = [tex]\frac{\$ 3,500,000}{550+7,000}[/tex]
Lost Sales per Warranty Hour [tex]\approx \frac{\$ 3,500,000}{7,550}[/tex] ≈ $463.58
Step 2: Proportional Cost of Lost Sales for Parable Company
Proportional Cost for Parable = Lost Sales per Warranty Hour × Warranty Hours for Parable
Proportional Cost for Parable ≈ $463.58 × 7,000
Proportional Cost for Parable ≈ $3,254,060
Step 3: Increase in Cost per Component for Parable Company
Increase in Cost per Component for Parable = [tex]\frac{\text { Proportional Cost for Parable }}{\text { Units Purchased from Parable }}[/tex]
Increase in Cost per Component for Parable [tex]\frac{\$ 3,254,060}{76,000}[/tex]
Increase in Cost per Component for Parable ≈ $42.82
Final answer:
To allocate the cost of lost sales to Parable Company based on warranty hours, we divide the total lost sales by the total warranty hours to find a per hour cost, then multiply this by Parable's warranty hours. The new cost per component from Parable is found by adding this cost to their original purchase price, resulting in a new cost of $52.70 per component.
Explanation:
The proportional cost of lost sales to Parable Company is calculated using the warranty hours. First, we determine the lost sales per warranty hour by dividing the total lost sales by the total warranty hours. Then, we assign this cost to Parable based on their share of warranty hours. Finally, we calculate the increase in cost per component for Parable by adding the proportional lost sales cost to their purchase price.
Lets calculate the lost sales per warranty hour:
Total lost sales = $3,500,000Total warranty hours = Hydra (550) + Parable (7,000) = 7,550 hoursLost sales per warranty hour = Total lost sales / Total warranty hoursLost sales per warranty hour = $3,500,000 / 7,550Lost sales per warranty hour = $463.58 (rounded to two decimal places)Now, lets assign this cost to Parable:
Parable warranty hours = 7,000Assigned lost sales cost to Parable = Lost sales per warranty hour * Parable's warranty hoursAssigned lost sales cost to Parable = $463.58 * 7,000Assigned lost sales cost to Parable = $3,245,060Finally, we calculate the increase in cost per component for Parable. This is done by dividing the assigned lost sales cost to Parable by the total units purchased from Parable:
Units purchased from Parable = 76,000Increased cost per component due to lost sales = Assigned lost sales cost to Parable / Units purchased from ParableIncreased cost per component due to lost sales = $3,245,060 / 76,000Increased cost per component due to lost sales = $42.70 (rounded to two decimal places)The new cost per component from Parable, including the assigned lost sales cost, would be the sum of the original purchase price and the increased cost per component:
New cost per component from Parable = Original purchase price + Increased cost per componentNew cost per component from Parable = $10.00 + $42.70New cost per component from Parable = $52.70 (rounded to two decimal places)Lattimer Company had the following results of operations for the past year: Sales (15,000 units at $12.25) $183,750 Variable manufacturing costs $101,250 Fixed manufacturing costs 24,750 Selling and administrative expenses (all fixed) 39,750 (165,750) Operating income $18,000 A foreign company whose sales will not affect Lattimer's market offers to buy 5,500 units at $8.00 per unit. In addition to existing costs, selling these units would add a $0.30 selling cost for export fees. If Lattimer accepts this additional business, the special order will yield a:
a. $3,850 loss.
b. $6,875 profit.
c. $2,200 loss.
d. $5,225 profit.
e. $9,350 loss.
The special order from the foreign company will yield a profit of $5,225 after all variable costs are accounted for. This is found by subtracting the additional costs of manufacturing and export fees from the revenue from the order.
Explanation:
To calculate the income or loss from the additional business, we need to look at the additional revenue it will bring and the additional costs linked to it. The revenue from the foreign company's order will be 5,500 units * $8.00/unit = $44,000. The additional variable manufacturing cost for the 5,500 units can be calculated by multiplying the cost per unit (Variable manufacturing costs $101,250 / 15,000 units = $6.75 per unit) by 5,500 units, yielding $37,125. The additional selling cost for export fees is $0.30/unit * 5,500 units = $1,650. The total cost of the special order, therefore, is $37,125 + $1,650 = $38,775. So subtracting the total cost from the total income, we find that the special order will yield a profit of $44,000 - $38,775 = $5,225. Thus, the correct answer is d. $5,225 profit.
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Activity-Based Management for a Hotel Consider the following actions of a hotel chain trying to manage the costs of its check-in process. Required Match each of the process improvements listed with how it delivers cost reductions. Process Improvement Delivers Cost Reduction
1. Guests may now check in online rather than in person.
2. Guest information is added to forms based on computerized reservation rather than waiting until guest checks in.
3. The hotel closes for two months in the "low" season.
a. By reducing the frequency of activity.
b. Improving the efficiency of the activity.
c. By both (a) and (b).
Answer:
1. Guests may now check in online rather than in person.
c. By both (a) and (b).
2. Guest information is added to forms based on computerized reservation rather than waiting until guest checks in.
b. Improving the efficiency of the activity.
3. The hotel closes for two months in the "low" season.
a. By reducing the frequency of activity.
Explanation:
You can measure efficiency in business activity by getting the quotient of an actual output rate of a worker by a determinate standard output rate. This comparison will improve or get closer to 1 if guests' information is added to forms based on computerized reservation rather than waiting until guest checks in. Thus, a person in a hotel lobby counter will do her/his work more efficiently if s/he has access to the guest's computerized reservation instead of waiting for the guest to submit her/his information in the check-in process.
This business activity has a particular frequency as a service business related to seasons. A low-season closing follows to a zero frequency, therefore, there are no expenses related to a service which the business is not offering.
Finally, as guests may now check-in online rather than in person, this combines frequency and efficiency in business, thus, the business would not have to pay for a worker on the counter to ask and fill in forms at the hotel check-in process.
Your company is environmentally conscious and is considering two heating options for a new research building. What you know about each option is below, and your company will use an annual interest rate (MARR) of 88% for this decision. Which is the lower cost option for the company?
Answer
The answer and procedures of the exercise are attached in the following archives.
You didn´t post the complete information of the exercise, I searched the exercise online and tried to ask the most useful question.
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.
A flight route is served by American Airlines (AA) and Southwest Airlines (SW). Suppose American is the industry leader American will decide whether to raise airfares, and then Southwest will decide whether to match the price increase. What is the Nash equilibrium of the game?
a. The game does not have a Nash equilibrium.
b. American will leave fares unchanged and Southwest will leave fares unchanged
c. American will leave fares unchanged and Southwest will raise fares
d. American will raise fares and then Southwest will leave fares unchanged
e. American will raise fares and then Southwest will raise fares.
Answer:
The correct answer is letter "B": American will leave fares unchanged and Southwest will leave fares unchanged.
Explanation:
Named after American mathematician John Nash (1928-2015), the Nash equilibrium explains how groups of people or individuals make choices that will affect other parties' choices. Nash equilibrium refers to a condition in which every participant has optimized its outcome based on the other player's expected decision. Eventually, an individual cannot receive benefits from changing actions, assuming that the other parties do not make any changes as well.
The term "current financial resources" refers to
A. The government’s current assets and current liabilities.
B. Financial resources used to provide electricity to local citizens.
C. Assets that are available to be used for current expenditures.
D. Those assets that can quickly be converted into cash.
E. The current value of all net assets owned by the governmental unit.
Answer:C. Assets that are available to be used for current expenditures
Explanation:
The running of a firm will be affected no matter how much asset it has if there are no current financial resources to meet his immediate obligations, the availability of assets convertible to immediate cash to meet current or immediate obligations is called current financial resources.
You estimate Bayleaf Inc. has free cash flows of $70 million arriving in 1 year, $74 million in 2 years, and $80 million in 3 years. After year 3, the long term growth rate of FCF will be 3% (thus year 4 FCF is $82.4 million). Bayleaf has $241 million in net debt and a weighted average cost of capital of 14%. What is your estimate of the Enterprise Value of Bayleaf (in millions)?
Answer:
If no information of how many years expected for the FCF in Bayleaf, then I assume you expect FCF in 4 years only.
Then the Enterprise Value of Bayleaf is nil, since its valuation is negative of roughly $19,871.
However if we expect to have FCF in 20 years, in which the growth rate of FCF in year 4th is 3% year on year, then the valuation of Bay Leaf Inc. is roughly $347 million.
Explanation:
The valuation of enterprise is Net present value (NPV) of Free Cash Flow (FCF) minus its Net Debt
In the NPV, the discount rate is weighted average cost of capital (WACC); thus we can calculate NPV of FCF in Bayleaf by this function in excel = NPV(14%,70000,74000,80000) = $221,129,242
Then the valuation of company if considering FCF in 4 years is ($19,871)= NPV of FCF – Net Debt = $221,129,242 - $241,000,000
Please see excel attached for your details.
3. Calculate the equity each of these people has in his or her home: Fred just bought a house for $200,000 by putting 10% as a down payment and borrowing the rest from the bank. Freda bought a house for $150,000 in cash, but if she were to sell it now, it would sell for $250,000.
Answer:
1. $20,000
2. $250,000
Explanation:
In the balance sheet, the assets, liabilities, and stockholder equity is recorded. In this the accounting equation is used which is shown below:
Total assets = Total liabilities + stockholder equity
The debit and credit side of the balance sheet should always be equal and balanced.
Moreover, it always is prepared on the specified date.
In the given case, the equity value would be
1. Assets = $200,000
Down payment = $200,000 × 10% = $20,000
Borrowed amount or Liabilities = $200,000 - $20,000 = $180,000
So, the equity would be $20,000
2. Purchase price = $150,000
Market value to sell = $250,000
The market value would be considered as an equity because there is no liability i.e $250,000
On January 1, 20X1, the Holloran Corporation purchased a machine at a cost of $55,000. The machine was expected to have a service life of 10 years and a $5,000 residual value. The straight-line depreciation method was used. In 20X3, the company switched to the double-declining-balance depreciation method. Depreciation for 20X3 should be:Multiple Choice$12,750$10,000$11,250$8,500
Answer:
The answer is $11250
Explanation:
Depreciation is used to depict the loss of value in an asset once it has been purchased. In this case, the machine's value at the end of 20X1 is $55000 less the depreciated amount. There are many methods of calculating depreciation. Holloran uses straight line for 20X1 and 20X2 then changes to the double declining method in 20X3.
To compute depreciation using the straight line method:
(Cost of asset - residual value)/duration of use
Accumulated depreciation for 20X1 and 20X2 is: (($55000-$5000)/10) * 2 =$ 10,000
To compute depreciation using the double declining method:
2 * depreciation rate * Book value (cost of asset less depreciation) at the beginning of the period.
At the beginning of 20X3, the book value of the machine is $45,000 ($55,000 - $10,000) and the remaining useful life is 8 years, therefore the depreciation rate = (100/8) = 12.5%.
To calculate depreciation for 20X3 on the double declining method: 2*12.5%*$45000 = $11,250
Marginal revenue for a monopolist is computed as :
a. average revenue divided by quantity sold.
b. average revenue times quantity divided by price.
c. total revenue divided by quantity sold.
d. change in total revenue per one unit change in quantity sold.
Answer:
d. change in total revenue per one unit change in quantity sold.
Explanation:
A monopolist marginal revenue is change in total revenue per one unit change in quantity sold.
Average revenue is total revenue divided by quantity sold.
A monopolist is a firm that only exists in an industry.
I hope my answer helps you.
With a pull marketing strategy,A. orders for merchandise are generated at the store level based on sales data captured at POS terminals.B. there is a greater likelihood of being overstocked or out of stock than in a push supply system.C. merchandise is allocated to stores on the basis of demand forecasts.D. inventory management is less responsive to customer demand.E. it is more difficult to manage conditions of high uncertainty than in a push supply chain.
Answer:
A. orders for merchandise are generated at the store level based on sales data captured at POS terminals.
Explanation:
In a pull marketing strategy, the company focuses on targeting customers to want the product under consideration specifically. For this the company focuses on targeting customers directly by providing straight discounts when bought from production houses directly.
This basically ignores the role of retailers and middle persons in the supply chin. Companies target the customer in such manner so that customers directly contact the producing houses.
Accordingly, orders are booked in store level only, through estimated sales study.
Joe Henry's machine shop uses 2 comma 500 brackets during the course of a year. These brackets are purchased from a supplier 90 miles away. The following information is known about the brackets:
Annual demand: 2,500
Holding cost per bracket per year: $ 1.50
Order cost per order: $ 18.75
Lead time: 2 days
Working days per year: 250
a) What is the EOQ? (round your response to two decimal places).
b) What is the average inventory if the EOQ is used? (round your response to two decimal places). What would be the annual inventory holding cost? (round your response to two decimal places).
c) Given the EOQ, how many orders will be made annually? (round your response to two decimal places). What would be the annual order cost? (round your response to two decimal places).
d) Given the EOQ, what is the total annual cost of managing (ordering and holding) the inventory? (round your response to two decimal places).
e) What is the time between orders? (round your response to two decimal places).
f) What is the reorder point (ROP)? (round your response to two decimal places).
Answer:
a) 250 brackets;
b) Average inventory: 125 brackets; Annual inventory holding cost: $187.50
c) 10 orders;
d) $375
e) 25 days
f) 20 brackets
Explanation:
a) EOQ = square root of [(2* Order Cost per one order * annual demand] / Holding Cost per bracket per year ] = square root of [ 2* 18.75 * 2,500 / 1.5] = 250 brackets.
b) Average inventory = EOQ/2 = 125 brackets; Annual inventory holding cost = 125 x 1.5 = $187.5
c) Orders made annually give EOQ = Annual demand / EOQ = 2,500/250 = 10 orders;
d) Total annual cost of managing (ordering and holding) the inventory = 10 x 18.75 + 187.5 = $375
e) Time between orders = Total annual working days/ orders made per year = 250/10 = 25 days.
f) The reorder point (ROP) = Demand of bracket per working day * lead time = Annual demand * Lead time / total annual working days = 2,500*2/250 = 20 brackets.
The Economic Order Quantity (EOQ) is 250 brackets. The average inventory if EOQ is used is 125 brackets, with an annual inventory holding cost of $187.50. The time between orders is 25 working days, and the reorder point (ROP) is 20 brackets.
Explanation:To find the Economic Order Quantity (EOQ), we can use the formula: EOQ = √((2 * Annual demand * Order cost per order) / Holding cost per bracket per year). Plugging in the values, we get EOQ = √((2 * 2500 * 18.75) / 1.5) = √((93750) / 1.5) = √62500 = 250.
The average inventory if the EOQ is used can be calculated as EOQ/2, which is 250/2 = 125 brackets. The annual inventory holding cost is the average inventory multiplied by the holding cost per bracket per year, which is 125 * 1.50 = $187.50.
The number of orders made annually can be calculated as Annual demand divided by the EOQ, which is 2500/250 = 10. The annual order cost is the number of orders multiplied by the order cost per order, which is 10 * 18.75 = $187.50.
The total annual cost of managing the inventory can be calculated by adding the annual inventory holding cost and the annual order cost, which is $187.50 + $187.50 = $375.
The time between orders can be calculated as EOQ divided by the annual demand, which is 250/2500 = 0.1 years, or 0.1 * 250 = 25 working days.
The reorder point (ROP) can be calculated as Lead time multiplied by the daily demand, which is 2 * (2500/250) = 20 brackets.
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Andrew is saving up money for a down payment on a car. He currently has $5470, but knows he can get a loan at a lower interest rate if he can put down $6253. If he invests the $5470 in an account that earns 4.8% annually, compounded quarterly, how long will it take Andrew to accumulate the $6253? Round your answer to two decimal places, if necessary.
Answer:
2.79 quarters, so almost 3 quarters or 9 months
Explanation:
We write the equation, and solve it. To solve for x, as x is an exponent, we must use logarithms.
[tex]5,470(1+0.048)^{X} = 6,253\\(1.048)^{X} = \frac{6,253}{5,470} \\(1.048)^{X} = 1.14\\XLog1.048 = Log 1.14\\X = \frac{Log1.14}{Log 1.048} \\\\X = 2.79\\[/tex]
Final answer:
It will take Andrew approximately 4.36 years to accumulate $6253 by investing $5470 in an account that earns 4.8% annually, compounded quarterly.
Explanation:
To calculate how long it will take Andrew to accumulate $6253 by investing $5470 in an account that earns 4.8% annually, compounded quarterly, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = final amount ($6253)
P = principal amount ($5470)
r = annual interest rate (4.8% or 0.048)
n = number of times interest is compounded per year (4)
t = number of years
Plugging in the values: 6253 = 5470(1 + 0.048/4)^(4t)
Dividing both sides by 5470: 1.1433 = (1.012)^4t
Taking the logarithm of both sides to solve for t: 4t = log(1.1433)/log(1.012)
t = (log(1.1433)/log(1.012))/4
Using a calculator, we find that t is approximately 4.36 years. Therefore, it will take Andrew approximately 4.36 years to accumulate $6253.
Activity Cost Pool Total Cost Total Activity Activity Rate Machine setups $ 20,000 200 setups $ 100 per setup Special processing $ 150,000 10,000 MHs $ 15 per machine-hour General factory $ 200,000 20,000 direct labour-hours $ 10 per direct labour-hour Total overhead costs $ 370,000 What is the total overhead cost assigned to Product A, if Product A used 100 setups, no special processing and 10,000 direct labor-hours? $10,000 $1,000 $110,000 $100,000
Answer:
total overhead cost = $110,000
so correct option is c. $110,000
Explanation:
given data
used = 100 setups
direct labor-hours = 1000
to find out
What is the total overhead cost assigned to Product A
solution
we get total overhead cost that is express as
total overhead cost = [ $100 per machine setup × 100 setups ] + [ $15 per machine-hours × 0 special processing ] + [ 10 per direct labor-hour × 10,000 direct labor-hours ]
so
total overhead cost = $10,000 + $0 + $100,000
total overhead cost = $110,000
so correct option is c. $110,000
Final answer:
The total overhead cost assigned to Product A is $110,000, calculated by adding the cost of machine setups ($10,000) and the cost of direct labor hours ($100,000). There was no special processing cost for Product A.
Explanation:
To calculate the total overhead cost assigned to Product A, we apply the activity rates to the actual levels of activity that Product A used. For machine setups, we have an activity rate of $100 per setup and Product A used 100 setups, resulting in a cost of $10,000 for machine setups (100 setups imes $100/setup = $10,000). There was no special processing, so this cost is $0. For direct labor-hours, the rate is $10 per direct labor-hour and Product A used 10,000 direct labor-hours, giving us a cost of $100,000 for direct labor-hours (10,000 direct labor-hours imes $10/direct labor-hour = $100,000). Adding these costs together, the total overhead cost assigned to Product A is $110,000 ($10,000 from setups + $100,000 from labor).
Marriott Rewards customers earn points whenever they stay at any Marriott property. Louis is in this program, and he travels quite a bit because he works in sales. He usually stays at a Courtyard by Marriott, and when he walks into the lobby, there is a sign by the desk welcoming him by name as well as other Marriott Rewards customers who might be staying there. This ongoing relationship between Louis and Marriott is an example of _____.
(A) Relationship marketing
(B) internal marketing
(C) personal marketing
(D) formal marketing
(E) Acquisition marketing
Answer: Option A
Explanation: In simple words, relationship marketing refers to the strategy under which an organisation tries several practices to foster positive relationship with the customers. These activities are designed to keep hearty relationships which will ultimately lead to strong and stable customer base.
In the given case, Marriott is rewarding their regular customers by providing them with special services and attention. Thus, we can conclude that the given case depicts relationship marketing.
Final answer:
The ongoing relationship between Louis and Marriott is an example of relationship marketing.
Explanation:
The relationship between Louis and Marriott, as described in the question, is an example of relationship marketing. Relationship marketing emphasizes building long-term customer relationships by providing personalized experiences and recognizing customer loyalty. In this case, Marriott is welcoming Louis by name and acknowledging his status as a Marriott Rewards member, which enhances his overall experience and fosters a strong relationship between Louis and Marriott.
Saira, Inc. has the following income statement (in millions): SAIRA, INC. Income Statement For the Year Ended December 31, 2017 Net Sales $300 Cost of Goods Sold 180 Gross Profit 120 Operating Expenses 45 Net Income $75 Using vertical analysis, what percentage is assigned to Cost of Goods Sold?
Answer:
60%
Explanation:
Percentage assigned to cost of goods sold
= Cost of goods sold / Sales
= $180 / $300
= 0.60 or 60%
Answer:
The percentage is assigned to Cost of Goods Sold is 60%
Explanation:
The percentage assigned to cost of good sold is the cost-to-sales ratio of a company which show how much direct cost to produce a product that $1 of sales is required.
For Saira, Inc.; the percentage assigned to cost of goods sold for the year ended 2017 is calculated as:
Percentage assigned to cost of goods sold in 2017 = Cost of good sold in 2017/Net Sales in 2017 = 180/300 = 0.6 = 60%.
So, the answer is 60%.
Francisca and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a wedding and reception.
If ambiguities appear in the contract, they will be construed against the party who :
a. drafted the contract.
b. has the greater bargaining power.
c. made the offer to contract.
d. offers the most confusing explanation of the terms.
Answer:
The answer is letter A.
Explanation:
They will be construed agains the party who drafted the contract. However, this rule only applies where one contracting party is in a superior bargaining position, usually either as a result of greater experience or the assistance of counsel.
2. A company’s financial records at the end of the year include the following amounts: Cash $ 70,000 Accounts receivable 28,000 Supplies 4,000 Accounts payable 10,000 Notes payable 5,000 Retained earnings, beginning of year 17,000 Common stock 40,000 Service revenue 62,000 Wages expense 8,000 Advertising expense 6,000 Rent expense 10,000 What is the amount of net income on the income statement for the year? a. $47,000. b. $88,000. c. $38,000. d. $30,000.
Answer:
c. $38,000
Explanation:
In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
The computation of the net income is shown below:
= Service revenue - Wages expense - Advertising expense - Rent expense
= $62,000 - $8,000 - $6,000 - $10,000
= $38,000
Equipment was acquired for $256,000 and has accumulated depreciation of $187,000. The business exchanges this equipment for new equipment. The new equipment has a market value of $208,000 and the business pays $159,000 cash. Assume the exchange has commercial substance. The exchange results in ________.
Answer:
exchange results = - $20000 loss
Explanation:
given data
acquired = $256,000
accumulated depreciation = $187,000
market value = $208,000
business pays cash = $159,000
to find out
The exchange results
solution
we get exchange results as gain or loss that is calculate as
exchange results = market value - book value of assets exchange - cash paid ..................1
here book value of assets exchange = acquired - accumulated depreciation
book value of assets exchange = $256,000 - $187,000 = $69000
so from equation 1
exchange results = market value - book value of assets exchange - cash
exchange results = $208,000 - $69000 - $159,000
exchange results = - $20000 loss
When exchanging equipment, the loss is determined by comparing the book value of the old equipment to the total cost of the new equipment. In this case, the old equipment's book value is $69,000, and the new equipment's total cost is $367,000, which means the business has incurred a loss.
Explanation:The exchange of equipment in the scenario described results in a gain or loss that can be calculated by comparing the book value of the old equipment to the value of the new equipment plus any additional cash paid.
The book value of the old equipment is calculated by subtracting the accumulated depreciation from the original cost: $256,000 - $187,000 = $69,000.
The company receives new equipment worth $208,000 and pays $159,000 in cash, making the total cost of the new equipment $208,000 + $159,000 = $367,000. Comparing this to the book value of the old equipment shows that the company has incurred a loss.
Jand, Inc., currently pays a dividend of $1.38, which is expected to grow indefinitely at 5%. If the current value of Jand’s shares based on the constant-growth dividend discount model is $35.41, what is the required rate of return? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
9.09%
Explanation:
Use Gordon growth model of stock valuation to find the required rate of return;
Price = D1/ (r-g)
this can also be written as [tex]\frac{D0(1+r)}{(r-g)}[/tex]
whereby,
Price = $35.41
D0 = Current dividend = 1.38
D1 = Next year's dividend = 1.38(1.05) = 1.449
g = growth rate = 5% or 0.05 as a decimal
r = required return = ?
Rewrite the formula "Price = D1/ (r-g) " to find r;
r = [tex]\frac{D1}{Price} +g[/tex]
r = [tex]\frac{1.449}{35.41} + 0.05\\ \\ =0.04092 +0.05\\ \\ =0.09092[/tex]
as a percentage, the required return = 9.09%
The required rate of return for Jand, Inc., using the constant-growth dividend discount model, is 8.89%. This is calculated by dividing the dividend of $1.38 by the current share price of $35.41 and adding the growth rate of 5%.
The student's question pertains to the calculation of the required rate of return using the constant-growth dividend discount model (DDM). The model uses the current dividend payment, the expected dividend growth rate, and the current stock price to determine the rate of return that investors would require to be willing to invest in the stock.
According to the DDM, the price of a share is calculated as:
Price = Dividend / (Required Rate of Return - Growth Rate)
Given that Jand, Inc., pays a dividend of $1.38, which is expected to grow indefinitely at 5%, and the current share price is $35.41, we can rearrange the formula to solve for the required rate of return:
Required Rate of Return = (Dividend / Price) + Growth Rate
To find the answer, plug in the values:
Required Rate of Return = (1.38 / 35.41) + 0.05
Required Rate of Return = 0.0389 + 0.05
Required Rate of Return = 0.0889 or 8.89% (rounded to two decimal places)
Two Harvard economists, Robert Barro and Rachel McCleary, have researched the role that ________________ plays in economic growth. a. meta-ideas b. religion c. human resource development d. technology
Reece Corporation is considering the purchase of a machine that would cost $24,388 and would have a useful life of 6 years. The machine would generate $5600 of net annual cash inflows per year for each of the 6 years of its life. The internal rate of return on the machine would be closest to:
Answer:
10%
Explanation:
IRR is the rate at which the net present value of a project is equal to zero. Using a financial calculator, use the following inputs and the CF function to find IRR;
The cost of the machine is the initial investment ; CF0 = -$24,388
Net cashflow year 1; C01 = 5,600
Net cashflow year 2; C02 = 5,600
Net cashflow year 3; C03 = 5,600
Net cashflow year 4; C04 = 5,600
Net cashflow year 5; C05 = 5,600
Net cashflow year 6; C06 = 5,600
then key in CPT IRR = 10.00%
Therefore, the internal rate of return is closest to 10%
ABC Inc. recently hired your consulting firm to improve the company's performance. It has been highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is the firm's present cash conversion cycle?
Average inventoy= 75,000
Annual sales= 600,000
Annual cost of goods sold= 360,000
Average accounts receivable= 160,000
Average accounts payable= 25,000
Answer:
CCC - Cash Conversion Cycle 148,03 Days
Explanation:
The Cash Conversion Cycle it's the sum of "Days of Inventory Outstanding".
"Days Sales Outstanding" and "Days Payables Outstanding"
CCC - Cash Conversion Cycle : 76,04 + 97,33 + 25,35 = 148,03
Days of Inventory OutstandingIt's calculated by dividing Average Inventory by Cost of Goods,
and that result multiplied by 365
Days Sales OutstandingIt's calculated by dividing Accounts Receivable by Sales,
and that result multiplied by 365
Days Payables OutstandingIt's calculated by dividing Accounts Payables by Cost of Goods,
and that result multiplied by 365
CCC - Cash Conversion Cycle 148
DIO - Days of Inventory Outstanding 76,04 = 75,000/360,000*365
Average Inventory 75,000
Cost Of Goods 360,000
DSO - Days Sales Outstanding 97,33 = $160,000/$600,000*365
Accounts Receivable 160,000
Sales 600,000
DPO - Days Payables Outstanding 25,35 = $25,000/$360,000*365
Accounts Payables 25,000
Cost Of Goods 360,000
Armor Sports, Inc. has two product lineslong dashbatting helmets and football helmets. The income statement data for the most recent year is as follows: Total Batting Helmets Football Helmets Sales revenue $ 840 comma 000 $ 500 comma 000 $ 340 comma 000 Variable costs (530 comma 000) (250 comma 000) (280 comma 000) Contribution margin $ 310 comma 000 $ 250 comma 000 $ 60 comma 000 Fixed costs (200 comma 000) (90 comma 000) (110 comma 000) Operating income (loss) $ 110 comma 000 $ 160 comma 000 $(50 comma 000) What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.)
A.Operating income will increase by $40,000.B.Operating income will increase by $90,000.C.Operating income will decrease by $60,000.D.Operating income will decrease by $350,000.
Answer:
The correct answer is C.
Explanation:
Giving the following information:
Football Helmets
Sales revenue $ 340,000
Variable costs (280,000)
Contribution margin $ 60,000
Fixed costs (110,000)
Operating income (loss) $(50,000)
Effect on income= fixed costs - operating income= -110,000 + 50,000= - 60,000
The effect of dropping the football helmets line on the operating income of Armor Sports, Inc. would result in a decrease of $50,000.
Explanation:The effect of dropping the football helmets line on the operating income of Armor Sports, Inc. can be found by examining the contribution margin and fixed costs associated with the football helmets line. From the income statement data, we can see that the contribution margin for football helmets is $60,000 and the fixed costs for this line is $110,000. Therefore, if the football helmets line is dropped, the operating income will decrease by $50,000 (the difference between the contribution margin and the fixed costs).
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Pentex and Marbro, small companies in the stationery business, each had a dollar gross margin of $20,000 during September 2014. Pentex's September sales were twice that of Marbro's. If Pentex's gross margin as a percentage of sales for September was 10%, what was Marbro's gross margin as a percentage of sales for the same period?
Answer:
20%
Explanation:
Since the gross margin is $20,000 and the gross margin percentage of Pentex is 10%, so from this information we can find out the sales value which is shown below:
Gross profit percentage = Gross profit ÷ sales
10% = $20,000 ÷ sales
So, the sales would be $200,000
Since the Pentex sales is twice of Marbro
So, the Marbro sales would be half of Pentex sales
So, the Marbro sales would be $100,000
Now the Marbro gross profit percentage would be
= $20,000 ÷ $100,000
= $20%
When investing for a long term, investors care about the volatility of ________ returns and not
the volatility of ________ returns.
A) average, cumulative
B) cumulative, average
C) mean, cumulative
D) mean, average
Answer:
B) cumulative, average
Explanation:
Cumulative return is the total return that the investment has earned; the average return has to do with the average return of investment that has accrued to the investment within a specified period.