Answer:
The fact that electric-powered forklift truck has a higher NPV and IRR means that it is more profitable and more value-adding, hence, the electric-powered forklift truck is highly recommended
Explanation:
The net present value of a project is the present value of its future cash flows discounted at the required rate of return of 13%.
The present value of each future cash flow can be determined as the future value multiplied by the discount factor
PV=FV*1/(1+r)^N
which can be rewritten thus:
PV=FV/(1+r)^N
FV=future cash flow
r=discount rate=13%
N=the year of cash flow(1 for year 1 cash flow,2 for year 2 cash flow and so on)
gas-powered forklift truck:
NPV=$4,600/(1+13%)^1+$4,600/(1+13%)^2+$4,600/(1+13%)^3+$4,600/(1+13%)^4+$4,600/(1+13%)^5+$4,600/(1+13%)^6-$17,960
NPV=$428.73
electric-powered forklift truck:
NPV=$6,860/(1+13%)^1+$6,860/(1+13%)^2+$6,860/(1+13%)^3+$6,860/(1+13%)^4+$6,860/(1+13%)^5+$6,860/(1+13%)^6-$21,500
NPV=$5,923.19
The internal rate of return is the discount rate at which the the present value of future cash flows is the same as the initial investment outlay, in essence, at IRR,NPV is zero
The IRR can be determined using excel IRR as shown below:
=IRR(values)
the values are the cash flows beginning with initial investment(negative cash flow) followed by future cash flows in subsequent years
Find attached
The NPV for the electric-powered truck is $12,285.04 with an IRR of 23.55%. The NPV for the gas-powered truck is $3,692.33 with an IRR of 18.20%. Therefore, the electric-powered truck is recommended.
To solve this problem, we need to calculate both the Net Present Value (NPV) and the Internal Rate of Return (IRR) for the electric-powered and gas-powered trucks.
Electric-Powered Truck:
Initial Cost: $21,500Annual Net Cash Flow: $6,860Life: 6 yearsCost of Capital: 13%Using the NPV formula:
NPV = Sum of (Cash Flow / (1 + discount rate)^year) - Initial Investment
NPV (Electric) = [tex]6,860 / (1 + 0.13)^1 + 6,860 / (1 + 0.13)^2 + 6,860 / (1 + 0.13)^3 + 6,860 / (1 + 0.13)^4 + 6,860 / (1 + 0.13)^5 + 6,860 / (1 + 0.13)^6 - 21,500[/tex]
= $12,285.04
Using a financial calculator, the IRR can be found as:
IRR (Electric) = 23.55%
Gas-Powered Truck:
Initial Cost: $17,960Annual Net Cash Flow: $4,600Life: 6 yearsCost of Capital: 13%Using the NPV formula:
NPV (Gas) = [tex]4,600 / (1 + 0.13)^1 + 4,600 / (1 + 0.13)^2 + 4,600 / (1 + 0.13)^3 + 4,600 / (1 + 0.13)^4 + 4,600 / (1 + 0.13)^5 + 4,600 / (1 + 0.13)^6 - 17,960[/tex]
= $3,692.33
Using a financial calculator, the IRR can be found as:
IRR (Gas) = 18.20%
Based on the NPV and IRR calculations, the electric-powered truck is recommended because it has a higher NPV and IRR.
On January 2, 2009, L Co. issued at par $20,000 of 4% bonds convertible in total into 1,000 shares of L's common stock. No bonds were converted during 2009. Throughout 2009, L had 1,000 shares of common stock outstanding. L's 2009 net income was $2,000. L's income tax rate is 50%.No potential common shares other than the convertible bonds were outstanding during 2009.L's diluted earnings per share for 2009 would be :A. $1.00.B.$1.20.C. $1.40.D. $2.00.
Answer:
The correct answer is $1.2 per share.
Explanation:
According to the scenario, the computation of the given data are as follows:
Interest expense of Bonds = $20,000 × 4% = $800
Now, Interest expense of Bond, After tax = $800 × ( 1 - 50%) = $800 × 0.50
= $400
So, we can calculate the diluted earning by using following formula:
Diluted Earning = (Net income + Interest expense after tax) ÷ Total outstanding shares outstanding
Where, Total outstanding shares = 1,000 shares + 1,000 shares = 2,000 shares
By putting the value, we get
Diluted earning = ($2000 + $400 ) ÷ 2,000
= $1.2 per share
Joe runs a restaurant. He pays his employees $200,000 per year. His ingredients cost him $50,000 per year. Prior to running his restaurant, Joe was a lawyer earning $150,000 per year. If Joe's restaurant earns $600,000 per year in revenue, Joe's accounting profits are ________ and his economic profits are __________.
Answer:
Accounting profit= $350,000
Economic profit= $200,000
Explanation:
Giving the following information:
Restaurant:
Earnings= 600,000
Employees= (200,000)
Ingridients= (50,000)
Lawyer:
Earnings= 150,000
The difference between the economic and accounting profit is that the first one includes the opportunity cost of not working as a lawyer.
Accounting profit= 600,000 - 250,000= $350,000
Economic profit= 600,000 - 250,000 - 150,000= $200,000
Joe's restaurant has an accounting profit of $350,000, which is calculated by subtracting the cost of employees and ingredients from the revenue. The economic profit, which additionally subtracts the opportunity cost of Joe not working as a lawyer, is $200,000.
Explanation:Joe runs a restaurant and his accounting profits and his economic profits are calculated from his annual activities. First, to calculate accounting profit, we subtract the explicit costs of employees ($200,000) and ingredients ($50,000) from his revenue ($600,000). This gives us an accounting profit of $600,000 - $200,000 - $50,000 = $350,000. Next, to find economic profit, we consider not only the explicit costs but also the opportunity cost of Joe's next best alternative to running the restaurant, which was his previous job as a lawyer earning $150,000 per year. Therefore, the economic profit is $350,000 (accounting profit) minus the opportunity cost of $150,000, resulting in $200,000.
A company has outstanding 11.00 million shares of $3.00 par common stock and 2.4 million shares of $7.00 par preferred stock. The preferred stock has an 8% dividend rate. The company declares $480,000 in total dividends for the year. Which of the following is correct if the preferred stockholders only have a current dividend preference?
a. Preferred stockholders will receive the entire $480,000, and they must also be paid $80,000 before the end of the current accounting period. Common stockholders will receive nothing.
b. Preferred stockholders will receive the entire $480,000, and they must also be paid $80,000 sometime in the future before common stockholders will receive anything.
c. Preferred stockholders will receive $38,400 or 8% of the total dividends. Common stockholders will receive the remaining $441,600.
d. Preferred stockholders will receive the entire $480,000, but will receive nothing more relating to this dividend declaration. Common stockholders will receive nothing.
Preferred stockholders will receive the entire $480,000, but will receive nothing more relating to this dividend declaration. Common stockholders will receive nothing. Thus, the correct answer is option d.
Who are preferred stockholders?Preferred shareholders have priority over a company's income, meaning they are paid dividends before common shareholders.
Preferred Stockholders are entitled to the dividend as follows:-
= 2,400,000 shares * $7.00 * 8%
= $1,344,000
They are entitled to $1,344,000 in dividends, but because the dividends declared do not total that amount, they will accept the entire amount declared.
However, because preferred stockholders only have a current dividend preference and not a cumulative dividend preference, they cannot claim the remaining balance in any other year. As the preferred stockholder takes the entire $480,000, common shareholders receive nothing this year.
Therefore, option D is correct if the preferred stockholders only have a current dividend preference.
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Underground Clothing is a zero growth firm that has expected earnings before interest and taxes of $56,700, an unlevered cost of capital of 16.2 percent, and a tax rate of 35 percent. The company also has $9,500 of debt that carries a coupon rate of 7 percent. The debt is selling at par value. What is the value of this firm
Answer:
$230,825
Explanation:
VU = [$56,700 × (1 - .35)] / .162
VU= $56,700×0.65/.162
VU=36,855/.162
VU = $227,500
VL = $227,500 + .35($9,500)
VL= $227,500+$3,325
VL= $230,825
In 2017, Scranton, Inc. sold 2,000 carpets for $50 each. The carpets carry a two-year warranty for repairs. Scranton estimates that repair costs will average 3% of the total selling price. What amount would be recorded in the warranty liability account as a result of selling the carpets during 2017
Answer:
$3,000
Explanation:
Inventory Sold 2,000*$50=$100,000
Warranty Expense $100,000*3%=$3,000
Therefore $3,000 would be reported in warranty liability account.
When any claim for warranty is reported,the liability will be set off by debiting it and corresponding effect to inventory or stores will be taken.
Cash of $12,000 will be received in year 6. Assuming an opportunity cost of capital of 7.2%, which of the following is true? The future value is $18,212 The present value is $7,996 The present value is $7,907 Provide data for tax purposes None of the above
Answer:
The present value is $7,907
Explanation:
12000(1+0.072)^-6=7907 (round up)
The Present value of $12,000 which will be received in year 6 at an opportunity cost of 7.2%, is approximately $7,996.
Explanation:The question pertains to the concept of Present Value in financial mathematics. Present Value (PV) is a concept in finance that calculates what the current worth of a future sum of money is today, given a specified rate of return. This could also be referred to as discounting a future amount. The formula to calculate present value is PV = FV / (1 + r) ^ n, where: PV = Present Value, FV = Future Value, r = rate of interest, n = number of periods.
In this case, we need to find out the Present Value of $12,000 expected to be received in 6 years time with an opportunity cost of capital of 7.2%. So, plugging the numbers into the formula, we get:
PV = $12,000 / (1 + 0.072) ^ 6. After calculating the value, you get PV = $7,996.
Therefore, the correct answer is 'The present value is $7,996'.
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Ashley is currently consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers cost $2.50, is Ashley consuming the correct quantities of these two goods to be in consumer equilibrium?
Answer:
Possible options;
a.No, she should consume more hamburgers and fewer hot dogs.
b.No, she should consume more hot dogs and fewer hamburgers.
c.Yes, so there is no need to change her eating habits.
d.There is not enough information to answer the question.
Answer is C
Explanation:
Jerry knows that Lucy has coveted his classic car for quite some time. Finally willing to sell it, he sends a letter to Lucy offering to sell the car for $15,000. Lucy responds by saying she needs time to arrange financing. Lucy offers Jerry $100 to keep the offer open for two weeks. Jerry agrees, taking the $100. Three days later, Roberta contacts Jerry saying she is interested in buying the car and has the cash to buy it outright. Jerry is concerned that if he doesn't sell the car to Roberta now, she may not be interested later. Furthermore, Lucy may never be able to arrange financing. Jerry is afraid he may end up with no buyer at all. He comes to you for advice. What do you advise
Answer:
Explanation:
Despite the fact that it seems jerry can easily take a bow of the discussion with Lucy and forge ahead in selling the car to Roberta, he had certain restrictions that he should respect. Accepting $100 from Lucy, Jerry entered into what we know as an “Option” contract, giving an option to Lucy to buy the car in the next two weeks.
Irrespective of Lucy’s financial status, jerry should respect the contract that he has entered into. As a back-up, he can hold discussions with Roberta and can request her to wait for 2 weeks when the option period expires and he can sell the car to her at an outright payment
Jerry is bound by an option contract with Lucy which prevents him from selling the car to anyone else for two weeks, despite receiving a better offer from Roberta in the interim.
Jerry finds himself in a contractual predicament due to an agreement to sell his classic car. When Lucy offers Jerry $100 to keep the offer open for two weeks, and he accepts it, they enter into what is known as an option contract. This means Jerry is legally obligated to keep the offer open for the agreed period and cannot sell the car to someone else during that time, regardless of any other offers he receives or concerns about Lucy's ability to secure financing.
In this scenario, the ethical and legal course of action for Jerry would be to inform Roberta that he is currently bound by the terms of his contract with Lucy and thus unable to accept her immediate offer. Jerry can explain to Roberta that if Lucy does not complete the purchase within the two-week period, he would then be free to negotiate with Roberta or any other potential buyers.
Seller and Buyer of three apartment buildings sign a memorandum on a paper napkin during lunch. The Seller argues that the agreement is not enforceable. The rule that requires a written memorandum to enforce certain contracts is known as a. The Statute of Frauds c. Rule against oral agreements. b. The Statute of Writings d. None of the above 19) Which of the following is not an element of fraud. a. Calculation error c. scienter b. Justifiable reliance d. Damages
Answer: 1. a. The Statute of Frauds
19. a. Calculation error
Explanation:
1. The Statute of Frauds
This is a common law concept that requires that certain types of transactions and/contracts are to be immortalised in writing.
Some of the contracts involved include the sale of Land ( which this scenario falls under) and contracts that will last a year and beyond.
19. Fraud is the act of misrepresenting facts to deceive others intentionally and make more often than not make financial gains from it.
The key thing to remember is that this done INTENTIONALLY. A Calculation error is just that, an Error. So it is not intentional which means that it is not an element of fraud.
The University of California has two bonds outstanding. Both issues have the same credit rating, a face value of $1,000 and a coupon rate of 4%. Coupons are paid twice a year. Bond A matures in 1 year, while bond B matures in 30 years.
The market interest rate for similar bonds is 9%.
1. What is the price of bond A?
2. What is the price of bond B?
3. Now assume that yields increase to 12%. What is the price of bond A?
4. What is now the price of bond B?
Answer:
1) price of Bond A=$953.18
2) price of Bond B=$484.05
3) price of Bond A= $ 926.66
4) price of Bond B= $ 353.54
Explanation:
According to the given data, we have two Bonds, Bond A and B with a face of value of $1,000 each of them, the coupon rate is of of 4%.
If The market interest rate for similar bonds is 9%, therefore the price of bond A and B would be calculated using the following formula:
PV(rate,nper,pmt,fv)
Hence, price of Bond A= PV(9%/2,1*2,40/2,1000)*-1
1) price of Bond A=$953.18
price of Bond B= PV(9%/2,30*2,40/2,1000)*-1
2) price of Bond B=$484.05
If that yields increase to 12%, therefore the price of bond A and B would be the following:
price of Bond A= PV(12%/2,1*2,40/2,1000)*-1
3) price of Bond A= $ 926.66
price of Bond B= PV(12%/2,30*2,40/2,1000)*-1
4) price of Bond B= $ 353.54
Answer:
1. $953.18
2. $484.05
3. $926.66
4. $353.54
Explanation:
Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Both of these cash flows discounted and added to calculate the value of the bond.
1.
Bond A
According to given data
Face value of the bond is $1,000
Coupon payment = C = $1,000 x 4% = $40 annually = $20 semiannually
Number of periods = n = 1 years x 2 = 2 period
Market Rate = 9% annually = 4.5% semiannually
Price of the bond is calculated by following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond = 20 x [ ( 1 - ( 1 + 4.5% )^-2 ) / 4.5% ] + [ $1,000 / ( 1 + 4.5% )^2 ]
Price of the Bond = $953.18
2.
Bond B
According to given data
Face value of the bond is $1,000
Coupon payment = C = $1,000 x 4% = $40 annually = $20 semiannually
Number of periods = n = 30 years x 2 = 60 period
Market Rate = 9% annually = 4.5% semiannually
Price of the bond is calculated by following formula:
Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]
Price of the Bond = 20 x [ ( 1 - ( 1 + 4.5% )^-60 ) / 4.5% ] + [ $1,000 / ( 1 + 4.5% )^60 ]
Price of the Bond = $484.05
Now Change the Market Interest rate to 12%
3.
Bond A
Price of the Bond = 20 x [ ( 1 - ( 1 + 6% )^-2 ) / 6% ] + [ $1,000 / ( 1 + 6% )^2 ]
Price of the Bond = $926.66
4.
Bond B
Price of the Bond = 20 x [ ( 1 - ( 1 + 6% )^-60 ) / 6% ] + [ $1,000 / ( 1 + 6% )^60 ]
Price of the Bond = $353.54
You are working in a small, student-run... You are working in a small, student-run company that sends out merchandise with university branding to alumni around the world. Every day, you take a sample of 50 shipments that are ready to be shipped to the alumni and inspect them for correctness. Across all days, the average percentage of incorrect shipments is 5%. What would be the upper control limit for a p-chart?
a. 0.05
b. 0.03082207
c. 0
d. 2.5
e. 0.142466
Answer:
e). 0.142466
Explanation:
The attached picture shows the explanation and i hope it works. Thank you
Answer:
e. 0.142466
Explanation:
We been given the following values in the question
n = 50
P = 0.5 ( 5/100)
P bar = Σnp/Σn
P bar = [(5/100)× 50]/50
= (0.05×50)/50
= 2.5/50
=0.05
Therefore to the calculate the upper and lower control limit we use the formula
UCL = p bar 3√ [p bar( 1-p bar)]/n
UCL = 0.05 + 3√[0.05(1-0.05)]/50
UCL= 0.142466 as our answer
Option e is the answer
Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha Division $60,000 Cost of capital 14% Target return on investment (ROI) 16% Margin for Alpha Division 21% If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be
Answer:
15.79%
Explanation:
Current Average operating asset = $500,000
Decrease in asset base will make average operating asset $380,000 [500000 - 120000]
ROI = Operating Income / New operating asset base
=$60,000 / $380,000
= 15.78947...% = 15.79%
Hence, the correct answer is 15.79%
Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 80,640; March, 64,000; April, 100,120; May, 40,120. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are: hiring, $52 per new worker; layoff, $72 per worker laid off; inventory holding, $12 per unit-month; regular time labor, $8 per hour; overtime, $12 per hour; backorder, $16 per unit. Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. (Leave the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round your answers to the nearest whole number.)
Answer:
The optimal production plan gives a total costs of $417,672 for the periods Feb to May
In Feb we will have to hire 26 workers to close the gap between demand and production from our 100 existing workers
In March however, we will have to lay them off (26 workers) to keep our production in line with demand.
In April, we are constrained to 100 workers, thus requiring that we run overtime. The overtime requirement is between 3,060 hours to max of 5,000 hours. Note that inspire of the hours chosen, demand for April still won't be fulfilled.
The best option will be the one that gives us last backlog because of the costs of backorder being extremely costly.
5,000 overtime hours in April is the best option .
In May, we are constrained to our 100 workers, meaning we will fulfill our back orders and also retain inventory in hand of 7,760 units.
The 3 pages attached show how the cost is worked out and the presentation as well.
During 2016 Green Thumb Company introduced a new line of garden shears that carry a two-year warranty against defects. Experience indicates that warranty costs should be 2% of net sales in the year of sale and 3% in the year after sale. Net sales and actual warranty expenditures were as follows:
Net
sales Actual warranty expenditures
2016 $ 45,000 $ 1,000
2017 120,000 3,500
At December 31, 2017, Green Thumb should report as a warranty liability of:
a.$900
b.$1,250
c.$3,750
d.$4,500
Answer:
c. $3,750
Explanation:
Green Thumb Company provides two years warranty for any product defect. The provision needs to be made for the warranty expense and it should be reported in the balance sheet as warranty liability. The company budgets the warranty expense to be 2% in year of sales which is $2,400 ($120,000 * 2%) and 3% in the year after sale which is $1,350 ($45,000 * 3%). The total warranty liability for the year 2017 which will be reported at December 31, 2017 is $3,750.
Price floors and price supports set a minimum price below which a good or service cannot be sold. Minimum wage laws and agricultural price supports are common examples of such price controls. When price floors are used to keep prices above free-market levels in the agricultural industry, which of the following outcomes are common? Check all that apply.
A. Overinvestment in the agricultural industryB. A decrease in the future supply of agricultural goodsC. A surplus of agricultural goodsD. A problem of disposal of surplus agricultural goods
Price floors in the agricultural industry often result in C. a surplus of agricultural goods and a problem of disposal.
Explanation:A price floor is a government-imposed limit on how low a price can be set for a specific good or service. It is often used to ensure that the price does not fall below a certain level, protecting producers and workers. Price floors can lead to surpluses and market inefficiencies if set above the equilibrium price.
When price floors are used to keep prices above free-market levels in the agricultural industry, the common outcomes are a surplus of agricultural goods and a problem of disposal of surplus agricultural goods. Price floors can lead to an overproduction of agricultural goods, resulting in a surplus. This surplus then creates a challenge for farmers and the government to find ways to deal with the excess goods.
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A. Overinvestment in the agricultural industry, C. A surplus of agricultural goods and D. A problem of disposal of surplus agricultural goods are common examples of such price controls.
Price floors and price supports set a minimum price below which a good or service cannot be sold. Minimum wage laws and agricultural price supports are common examples of such price controls. When price floors are used to keep prices above free-market levels in the agricultural industry, several common outcomes can be observed:
Overinvestment in the agricultural industry: Farmers may invest more in production due to the guaranteed higher prices.A surplus of agricultural goods: The price floor set above the equilibrium price results in the quantity supplied exceeding the quantity demanded.A problem of disposal of surplus agricultural goods: With more production than consumption, disposing of or storing the surplus becomes an issue.Hitzu Co. sold a copier costing $4,800 with a two-year parts warranty to a customer on August 16, 2015, for $6,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2016, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the Repair Parts Inventory. These are the only repairs required in 2016 for this copier.Based on experience, Hitzu expects to incur warranty costs equal to 4% of dollar sales. It records warranty expense with an adjusting entry at the end of each year.Required:1. How much warranty expense does the company report in 2015 for this copier?2. How much is the estimated warranty liability for this copier as of December 31, 2015?3. How much warranty expense does the company report in 2016 for this copier?4. How much is the estimated warranty liability for this copier as of December 31, 2016?5. Prepare journal entries to record (a) the copier's sale; (b) the adjustment on December 31, 2015, to recognize the warranty expense; and (c) the repairs that occur in November 2016.
Solution:
A Warranty is raised due to replace or corrects a product within the given period of time by the seller to the buyer. It is an obligation of the company. As per the matching principle the estimated warranty liability will reported as warranty expenses in the period when revenue is recognized
Journalizing is the process of recording of transactions in the book of original entry. It gives a complete picture of business transaction. It is recorded in chronological order. It is the pre phase for preparation of ledgers. Adjustment journal entry passed on the end of the year to get adjusted trial balance for preparation of financial statement.
The company H provides the additional information and required to calculate amount of warranty expenses and estimated warranty liability in different year ends and passing journal entry of the followings.
1.
Company sold copier of costing of $4,800 for $ 6,000 with an expected warranty cost of 4%.
Calculation of warranty expenses is as below.
Warranty expenses = rate of warranty * sales price
4% * $6000
= $240
Warranty expenses for the company which reported in the 2015 for the copier is $240
2.
Company sold copier of costing of $4,800 for $ 6,000 with an expected warranty cost of 4%.
Calculation of estimated warranty liability reported as of 31st December, 2015 is as below.
Estimated Warranty expenses = rate of warranty * sales price
4% * $6000
= $240
Estimated warranty liability for the company which reported as of 31st December, 2015 for the copier is $240
3.
In the year 2016 the company $209 repair required for the copier. And this amount charged against estimated warranty liability. The company provided two year parts warranty, for this warranty expenses charged in the year 2015.
Hence no further warranty expenses reported in the year 2016 for the copier.
4.
Computation of estimated warranty liability for the copier as of December 31st, 2016 is as below.
Balanced of Estimated Warranty liability =
Estimated Warranty liability in previous year - cost of repair charged against
estimated warranty liability balance
= $240 - $209
= $31
Balance of estimated warranty liability for this copier as of December 31st, 2016 is $31
5.
(a)
On August 16th, 2015 the company H sold a copier costing $4,800 for $6,000 and it required to pass journal entry as below.
[ Find FIGURE in attachment no. 1]
( consider year 2016 as 2015 and 2017 as 2016 in the attachment)
Cash account debited, because of increase of asset, sales account credited as the result increased the income. Cost of goods sold account debited, increase in expenses, and inventory account credited, because of decrease in value of asset.
Here the compound journal entry is passed, as company followed perpetual inventory system.
(b)
On December 31st 2015 the company required to pass the following adjustment entry to recognize the warranty expenses
[ Find FIGURE in attachment no. 2]
( consider year 2016 as 2015 and 2017 as 2016 in the attachment)
Warranty expenses account debited, because of increase of expenses and estimated warranty liability credited, because of increase in liability.
(c)
On November 22nd 2016 the company repairs on warranty sale and $209 of material taken form the repairs parts Inventory and the journal entry is passed as below.
[ Find FIGURE in attachment no. 3]
( consider year 2016 as 2015 and 2017 as 2016 in the attachment)
Estimated warranty liability debited, because of decrease in liability and Repair Parts Inventory account credited, because of decrease in asset.
Your firm has an average receipt size of $155. A bank has approached you concerning a lockbox service that will decrease your total collection time by one day. You typically receive 6,700 checks per day. The daily interest rate is 0.016 percent. The bank charges a lockbox fee of $120 per day.
a. What is the NPV of accepting the lockbox agreement? (Round your answer to 2 decimal places. (e.g., 32.16))
NPV $
b. What would the net annual savings be if the service were adopted?
(Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Net annual savings $
Answer:
a) 46.16 dollar per day favorable
b) accpeting the offer will provide a gain for 16,848.4 dollar
Explanation:
interest revenue for the decreased collection time:
6,700 check x 155 dollar each x 0.016% = 166,16
We will be taking the cash from teh customer earlier thus, earning interest on this amount
The cost will be 120 dollar the bank charges per day
Giving a net effect of 46.16 dollars in favor of the company per day
annual savings: 46.16 x 365 = 16.848,4
Imagine that your boss is someone whom you and your coworkers have very little respect for, but you and others continue to do what s/he asks because s/he has control over allocating year-end bonuses, promotions, etc. Presuming that your boss is aware of this-i.e., s/he feels disrespected but is aware of his/her formal position-how is your boss likely to respond/behave?
A. Minimize contact with his/her peers
B. Behave in an authoritarian way
C. Spend a lot of time politicking
D. Place excessive restrictions on employees
E. Hold back talented employees
F. Focus on promoting conflict
Answer:
The correct answer is letter "B" and "E": Behave in an authoritarian way.; Hold back talented employees.
Explanation:
Disrespected bosses tend to use their authority to let others know their ideas since they transmit no inspiration because of who they are. It is the only form they can get subordinates' attention. Besides, when subordinates start to show leadership skills or special talents, the disrespected boss would minimize that individual in an attempt to keep his or her power and not to be replaced by that subordinat
Fixed expenses are $991,000 per month. The company is currently selling 8,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $74,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 200 units. What should be the overall effect on the company's monthly net operating income of this change
Answer:
There is a decrease in monthly net operating income of $16,000
Explanation:
Consider Incremental Revenues and Costs as a result of the introduction of the sales commissions.
Sales Commission ( 8,200 units × $11) ($90,200)
Decrease in Monthly Salary $74,000
Net Income ($16,000)
There is a decrease in monthly net operating income of $16,000
Joe's Hardware is adding a new product line that will require an investment of $ 1,512,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $ 310,000 the first year, $ 270,000 the second year, and $ 230,000 each year thereafter for eight years. Compute the payback period. Round to one decimal place.
Answer:
6.05 years
Explanation:
Payback period is the time in which a project returns back the initial investment in the form of net cash flow. For this purpose we use the net cash flows to calculate the payback.
Payback working is attached with this answer please find it.
has $ 8 comma 400 cash on hand on October 1. The company requires a minimum cash balance of $ 7 comma 300. October cash collections are $ 548 comma 310. Total cash payments for October are $ 578 comma 140. Prepare a cash budget for October. How much cash, if any, will Howard need to borrow by the end of October?
Answer:
Borrowing of $29,040
Explanation:
Whether or not Howard needs to borrow at end of October can be ascertained by computing the cash excess or shortfall a shown below:
Opening cash balance $8,400
Cash collections $548,000
Cash available $556,400
Cash payments ($578,140)
Desired cash balance ($7,300)
Cash shortfall ($29,040)
The company has to borrow $29,040 in order to be able to make the desired cash payment and still have the desired cash closing balance of $7,300 at end of October
Multiple Choice Question 92 Conversion cost per unit equals $9.00. Total materials costs are $81300. Equivalent units of production for materials are 27100. How much is the total manufacturing cost per unit? $12.00. $6.00. $9.00. $3.00.
Answer:
$3.00
Explanation:
Manufacturing cost per unit= Total material cost/Equivalent unit
Cost per Unit= $81300/$21700
Cost per unit = $3.00
Answer:
$ 12
Explanation:
Conversion cost per unit equals $9.00.
Total materials costs are $81300
Equivalent units of production for materials are 27100
MAterial Costs per unit = Total materials costs /Equivalent units of production
Material Costs per unit =$81300/ 27100= $ 3 per unit
Total manufacturing cost per unit= Conversion cost per unit +Material Costs per unit = $ 9+ $3= $ 12
We find the material costs per unit and add it with the conversion cost per unit to get the total manufacturing cost per unit
Sales $ 3,400,000 Net operating income $ 272,000 Average operating assets $ 850,000 The following questions are to be considered independently. Garrison 16e Rechecks 2019-01-10 2. The entrepreneur who founded the company is convinced that sales will increase next year by 60% and that net operating income will increase by 210%, with no increase in a
Answer:
The question is not complete ,find below complete part of the question:
The entrepreneur who founded the company is convinced that sales will increase next year by 60% and that net operating income will increase by 210 %, with no increase in average operating assets. What would be the company’s ROI? 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,100,000 increase in sales, requiring a $275,000 increase in average operating assets, with a resulting $107,800 increase in net operating income. What would be the company’s ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
ROI is 99.20%
ROI is 33.76%
Explanation:
ROI under the first scenario;
Return on Investment(ROI)=net income/average operating assets*100
sales forecast $3,400,000*(1+60%)=$5,440,000.00
net operating income forecast $272,000*(1+210%)=$843,200
average operating assets is $850,000
forecast ROI=$843,200.00/*$850,000*100
forecast ROI=99.2%
ROI under the second scenario:
sales forecast($3,400,00+$1,100,000)=$4,500,000
net operating income forecast ($272,000+$107,800)=$379,800
average operating assets ($850,000+$275,000)=$1,125,000
forecast ROI=$379,800/$1,125,000
=33.76%
Larry and Susan work in an office near Tractor-ama and Tip Top Tractors, wholesale tractor sellers on the same block. Larry notices that both places are charging only $1500 for a base-model tractor, which is below the price of $2000 that a base-model tractor typically costs elsewhere in the city. Susan wonders if Tractor-ama and Tip Top Tractors are engaged in a price war. Over the past month, she has noticed that each store has lowered its prices each week, but that Tip Top Tractors always lowered its price first. She suggests that Tip Top Tractors is engaging in predatory pricing. Larry correctly replies that they cannot determine whether Tip Top Tractors is guilty of predatory pricing because:
Answer:
to prove Tip Top Tractors engaged in predatory pricing, you would need to prove that Tip Top Tractors priced a tractor below average variable cost with specified intention of driving Tractor-ama out of business.
Explanation:
Predatory pricing is a strategy to cut prices and set a price really low to gain new customers. This strategy is also used to stop entering other firms into business and create monopoly or Drive competitors out of their business. Tip Top Tractors has also adopted this strategy and has lowered the prices of tractor to $1500 which is below that the $2000 which is normal price in the city. To prove that Tip Top Tractors has adopted predatory pricing, we require proof that the prices are set below average variable cost.
For each of the following scenarios, determine the effect on aggregate supply.
a. There is an unexpected decrease in oil prices.
___ This will cause a movement along the aggregate supply curve to the left, showing a decrease in the quantity of real GDP supplied.
___ This will cause a decrease in aggregate supply, shifting the aggregate supply curve to the left.
___ This will cause an increase in aggregate supply, shifting the aggregate supply curve to the right.
___ This will cause a movement along the aggregate supply curve to the right, showing an increase in the quantity of real GDP supplied.
b. Suppose the government increases the amount that all producers are required to contribute to health insurance coverage
___ This will cause a movement along the aggregate supply curve to the right, showing an increase in the quantity of real GDP supplied.
___ This will cause a decrease in aggregate supply, shifting the aggregate supply curve to the left.
___ This will cause a movement along the aggregate supply curve to the left, showing a decrease in the quantity of real GDP supplied.
___ This will cause an increase in aggregate supply, shifting the aggregate supply curve to the right.
An unexpected decrease in oil prices increases aggregate supply by shifting the aggregate supply curve to the right, while a mandated increase in health insurance contributions by producers leads to a decrease in aggregate supply, shifting the curve to the left.
For each of the following scenarios, the effect on aggregate supply can be determined based on the changes in production costs and other relevant factors:
a. There is an unexpected decrease in oil prices.The rationale behind these effects is that a decrease in oil prices reduces production costs, allowing firms to supply more at the same price levels, thereby shifting the curve to the right. Conversely, an increase in mandatory health insurance contributions raises production costs, leading to a reduced quantity of goods and services supplied at the same price levels, which shifts the aggregate supply curve to the left.
Present value of an ordinary annuity: Dynamics Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $22,500 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this investment
Answer:
$75,423.49
Explanation:
Present value is the sum of discounted cash flows.
Present value can be calculated using a financial calculator.
Cash flow each year from year one to five = $22,500
I = 15%
Present value = $75,423.49
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
The present value of the investment is approximately $74,789.01.
Explanation:To calculate the present value of the investment, we need to use the formula for the present value of an ordinary annuity. The formula is: PV = CF x (1 - (1 + r)^-n) / r, where PV is the present value, CF is the cash flow per period, r is the discount rate, and n is the number of periods.
In this case, the cash flow is $22,500 per year, the discount rate is 15% (or 0.15), and the number of periods is 5 years. Plugging these values into the formula, we get: PV = $22,500 x (1 - (1 + 0.15)^-5) / 0.15 = $74,789.01 (rounded to two decimal places).
Therefore, the present value of this investment is approximately $74,789.01.
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Petra's basis was $50,000 in the PAM Partnership interest just before she received a proportionate nonliquidating distribution consisting of land held for investment (basis of $40,000, fair market value of $60,000) and inventory (basis of $40,000, fair market value of $40,000). After the distribution, Petra's bases in the land and inventory, respectively, are:a.$40,000 and $0.
b.$10,000 and $40,000.
c.$25,000 and $25,000.d.$40,000 and $10,000.
e.$40,000 and $40,000.
Answer:
b.$10,000 and $40,000.
Explanation:
Under the ordering rules for distributions, cash is distributed first, then followed by unrealized receivables and inventory; other assets are distributed last.
For Petra, the inventory is distributed first and takes a carryover basis of $40,000.
This reduces Petra's basis to $10,000. The land is distributed next and takes the $10,000 remaining basis
$50,000 (partnership interest) – $40,000 (inventory) = $10,000 (land distribution)
Marcelino co.'s march 31 inventory of raw materials is $85,000. Raw materials purchases in april are $560,000, and factory payroll cost in april is $386,000. Overhead costs incurred in april are:
indirect materials, $54,000;
indirect labor, $25,000;
factory rent, $37,000;
factory utilities, $24,000; and factory equipment depreciation, $51,000.
The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $690,000 cash in April. Costs of the three jobs worked on in april follow.
Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 30,000 $ 41,000
Direct labor 23,000 16,000
Applied overhead 11,500 8,000
Costs during April
Direct materials 139,000 200,000 $ 115,000
Direct labor 103,000 150,000 104,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process
Required:
1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).a. Materials purchases (on credit).b. Direct materials used in production.c. Direct labor paid and assigned to Work in Process Inventory.d. Indirect labor paid and assigned to Factory Overhead.e. Overhead costs applied to Work in Process Inventory.f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)g. Transfer of Jobs 306 and 307 to Finished Goods Inventory.h. Cost of goods sold for Job 306.i. Revenue from the sale of Job 306.j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)
Answer:
Explanation:
1. To determine each Job total costs
Job 306
1.
Opening Direct Material = $30,000
Add Input to production = $139,000
Total Inventory usage = $169,000
2.
Payroll opening balance = $23,000
April payroll = $103,000
Total payroll = $126,000
3.
Overhead opening = $11,500
April Overhead 50% of $103,000 = $51,500
Total Overhead = $63,000
Total costs of 306 = 1 + 2 + 3 = $358,000
**allocate Overhead by Raw Material usage:
Apr direct material for 306 divided by total April direct material x total April Overhead
= 139,000 / 454,000 x $191,000
= $58,478
(We have over applied Overhead by $4,522 using the 50% predetermined rate rule)
Job 307
1.
Opening Direct Material = $41,000
Add Input to production = $200,000
Total Inventory usage = $241,000
2.
Payroll opening balance = $16,000
April payroll = $150,000
Total payroll = $166,000
3.
Overhead opening = $8,000
April Overhead 50% of $150,000 = $75,000
Total Overhead = $83,000
Total costs of 307 = 1 + 2 + 3 = $490,000
**allocate Overhead by Raw Material usage:
Apr direct material for 307 divided by total April direct material x total April Overhead
= 200,000 / 454,000 x $191,000
= $84,141
(We have over applied Overhead by $1,141 using the 50% predetermined rate rule)
Job 308
1.
Opening Direct Material = $0
Add Input to production = $115,000
Total Inventory usage = $115,000
2.
Payroll opening balance = $0
April payroll = $104,000
Total payroll = $104,000
3.
Overhead opening = $0
April Overhead 50% of $104,000 = $52,000
Total Overhead = $52,000
Total costs of 308 to work in progress = 1 + 2 + 3 = $271,000
**allocate Overhead by Raw Material usage:
Apr direct material for 308 divided by total April direct material x total April Overhead
= 115,000 / 454,000 x $191,000
= $48,381
(We have over applied Overhead by $3,619 using the 50% predetermined rate rule)
B.
1. Sales of Job 306 = $690,000
Transfer of costs to Finished Goods : Job 306 = $358,000
Add Adjustments for Overhead over applied = -$4,522
Cost of sales = $353,478
2.
Sales of Job 307 = not yet sold
Transfer of costs to Finished Goods : Job 307 = $490,000
Add Adjustments for Overhead over applied = -$1,141
Cost of goods available for sales = $488,859
3. Sales of Job 308 = still work in progress
Transfer of costs to work in progress : Job 308 = $271,000
Add Adjustments for Overhead over applied = -$3,619
Cost of Work in progress = $267,381
The total production costs incurred for April are as follows: Materials purchases - $560,000, Direct materials used in production - $315,000, Direct labor paid and assigned to Work in Process Inventory - $377,000, Indirect labor paid and assigned to Factory Overhead - $25,000, Overhead costs applied to Work in Process Inventory - $196,000, and Actual overhead costs incurred including indirect materials - $191,000. Additionally, the cost of goods sold for Job 306 is $221,300, and the revenue from the sale of Job 306 is $690,000.
Explanation:a. Materials purchases (on credit): $560,000
b. Direct materials used in production: $315,000
c. Direct labor paid and assigned to Work in Process Inventory: $377,000
d. Indirect labor paid and assigned to Factory Overhead: $25,000
e. Overhead costs applied to Work in Process Inventory: $196,000
f. Actual overhead costs incurred, including indirect materials: $191,000
g. Transfer of Jobs 306 and 307 to Finished Goods Inventory: $806,500
h. Cost of goods sold for Job 306: $221,300
i. Revenue from the sale of Job 306: $690,000
j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account: None
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On March 9, 2009, the Dow Jones Industrial Average reached a new low at a close of 7,447.50, which was down 98.34 that day. What was the return (in percent) of the stock market that day?
Answer: -1.26%
Explanation:
We can solve for this using the following formula.
Return on Stock Market = Down figure of Index / ( Close figure of Index - down figure of Index)
So calculating we have,
Return on Stock Market = -98.34 / ( 7,447.50 - (-98.34))
Return on Stock Market = -98.34 / 7,545.84
Return on Stock Market = - 0.0126
Return on Stock Market = -1.26%
The return of the stock market that day was approximately -1.31%.
To calculate the return of the stock market that day, we can use the formula for percentage return:
[tex]\[ \text{Percentage Return} = \left( \frac{\text{Change in Price}}{\text{Initial Price}} \right) \times 100 \][/tex]
Given that the Dow Jones Industrial Average was down by 98.34 points from the previous day's close to 7,447.50, we can calculate the initial price by adding the loss to the closing price:
[tex]\[ \text{Initial Price} = \text{Closing Price} + \text{Change in Price} \] \[ \text{Initial Price} = 7,447.50 + 98.34 \] \[ \text{Initial Price} = 7,545.84 \][/tex]
Now, we can calculate the percentage return:
[tex]\[ \text{Percentage Return} = \left( \frac{-98.34}{7,545.84} \right) \times 100 \] \[ \text{Percentage Return} = -0.01304 \times 100 \] \[ \text{Percentage Return} \approx -1.304\% \][/tex]
Rounding to two decimal places, the return of the stock market that day was approximately -1.31%.
Madrid Company plans to issue 9% bonds with a par value of $5,300,000. The company sells $4,770,000 of the bonds at par on January 1. The remaining $530,000 sells at par on July 1. The bonds pay interest semiannually on June 30 and December 31. 1. Record the entry for the first interest payment on June 30. 2. Record the entry for the July 1 cash sale of bonds.
Answer and Explanation:
The journal entry are as follows
1. Interest expense $214,650
To Cash $214,650
(Being the first interest payment is recorded)
The computation is shown below
= $4,770,000 × 9% × 6 months ÷ 12 months
= $214,650
For recording this we debited the interest expense as it increased the expenses while on the other hand the cash is paid which reduced the cash balance so it is credited
2. Cash $530,000
To Bond payable $530,000
(Being the cash sale of bond is recorded)
For recording this we debited the cash as cash is received that increased the cash balance and at the same time we credited the bond payable