Answer:
A.Disbursement float: $51,600
Collection float:–$47,800
Net float $27,700
B.New collection float -23,900
New net float $27,700
Explanation:
A. The disbursement float can be defined as the average monthly checks written times the average number of days for the checks to clear.
Disbursement float = 4($12,900)
Disbursement float = $51,600
The collection float can be seen as the average monthly checks received times the average number of days for the checks to clear.
Collection float = 2(–$23,900)
Collection float = –$47,800
The net float can be defined as the disbursement float plus the collection float, so:
Net float = $51,600 – $47,800
Net float = $3,800
B. New collection float will be:
Collection float = 1(–$23,900)
Collection float = –$23,900
And the new net float will be:
Net float = $51,600 – 23,900
Net float = $27,700
For the month of July, the unpaid balance on Sue’s credit card statement was $1,131.63 at the beginning of the billing cycle. She made purchases of $512.58. She also made a payment of $750.00 during the month. If the interest rate was 1.75% per month on the unpaid balance, determine the finance charge and the new balance on the first day of the August billing cycle.
Answer:
The finance charge is $19.80 and The new balance on the first day of the August billing cycle is $914.01
Explanation:
According to the given data, we have the following:
Sue’s credit card statement was $1,131.63 at the beginning of the billing cycle
purchases= $512.58
interest rate=1.75%
Hence, to determine the finance charge we use the equation I=Ptr,
so=($1,131.63)(1)(0.0175)
=$19.80.
The finance charge is $19.80
Then, She also made a payment of $750.00 during the month, so In order to calculate the new balance on the first day of the August billing cycle we would have to make the following calculation
new balance=old unpaid balance+finance charge+purchases-payment
=$1,131.63+$19.80+$512.58-$750.00
=$914.01
The new balance on the first day of the August billing cycle is $914.01
Marin Corporation manufactures drones. On December 31, 2016, it leased to Althaus Company a drone that had cost $118,900 to manufacture. The lease agreement covers the 5-year useful life of the drone and requires 5 equal annual rentals of $41,800 payable each December 31, beginning December 31, 2016. An interest rate of 10% is implicit in the lease agreement. Collectibility of the rentals is probable. Prepare Marin's December 31, 2016, journal entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g. 5,275.) Click here to view the factor table. Date Account Titles and Explanation Debit Credit December 31, 2016 Lease Receivable Cost of Goods Sold Sales Revenue Inventory (To record the lease) December 31, 2016 Cash Lease Receivable (To record receipt of lease payment)
Answer and Explanation:
The journal entries are shown below:
1. Lease receivable ($41,800 × 4.1699) $174,302
Cost of goods sold $118,900
To Sales revenue $174,302
To Inventory $118,900
(Being the lease receivable is recorded)
Kindly refer to the present value of an annuity due table for 5 years at 10% i.e 4.1699
2. Cash $41,800
To Lease receivable $41,800
(Being receipt of lease payment is recorded)
MG corporation has a target capital structure of 45 percent common stock, 10 percent preferred stock, and 45 percent debt. Its cost of equity is 17 percent, the cost of preferred stock is 6.5 percent, and the cost of debt is 9 percent (before taxes). The relevant tax rate is 35 percent. What is MGís WACC?
Answer:
The WACC is 10.93%
Explanation:
The WACC or weighted average cost of capital is the cost to firm of its capital structure. The capital structure of the firm consists of debt, preferred stock and common stock. The WACC is calculated by taking the sum of the weighted average cost of each component of the capital structure.
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
w represents the weight of each component as a proportion of total assetsr represents the cost of each componentWe take the after tax cost of debt. So, rD is multiplied by (1-tax rate)WACC = 0.45 * 0.09 * (1-0.35) + 0.1 * 0.065 + 0.45 * 0.17
WACC = 0.109325 or 10.9325% rounded off to 10.93%
Your grandparents would like to establish a trust fund that will pay you and your heirs $130,000 per year forever with the first payment 11 years from today. If the trust fund earns an annual return of 2.5 percent, how much must your grandparents deposit today?
Answer:
$5,200,000
Explanation:
Amount that grandparents must deposit today = Regular amount / Rate of interest
= $130,000 / 2.5%
=$130,000/0.025
= $ 5,200,000
Therefore the amount that grandparents must deposit today is $5,200,000
Answer:
If the trust fund earns an annual return of 2.5 percent, Your grandparents must deposit today $4,062,231
Explanation:
In order to calculate how much must your grandparents deposit today, first we would have to calculate according to the information given the Value of fund required at end of year 10.
Hence, Value of fund required at end of year 10 = $130,000 / 2.5% = =$5,200,000
Therefore, the Value of fund required today at 2.5% and N = 10 = $5,200,000 / (1 + 2.5%)^10
= $4,062,231
If the trust fund earns an annual return of 2.5 percent, Your grandparents must deposit today $4,062,231
Screen Perfect Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores a. cannot reject the entire shipment c. must accept the entire shipment b. can reject the entire shipment d. must reject the entire shipment
Answer: b. can reject the entire shipment
Explanation: TV Stores can reject the entire shipment if the goods received from Screen Perfect Inc. do not conform exactly to the terms of the contract in some details. Under the perfect tender rule, Screen Perfect Inc. must ship or tender goods to TV Stores that exactly conform to the contract in every detail. The rule refers to the legal right for a buyer of a good to insist upon "perfect tender" in terms of quality, quantity, and manner of delivery by the seller.
You have $ 10 comma 000 to invest. You decide to invest $ 20 comma 000 in Google and short sell $ 10 comma 000 worth of Yahoo! Google's expected return is 15 % with a volatility of 30 % and Yahoo!'s expected return is 12 % with a volatility of 25 %. The stocks have a correlation of 0.90. What is the expected return and volatility of the portfolio? The expected return is
Answer:
expected return is 18%
volatility of the portfolio 13.23 %
Explanation:
Your Investment: $ 10,000
Invest $ 20,000 in Google, Google's expected return is 15 %
Sell $ 10,000 worth of Yahoo! Yahoo! Yahoo!'s expected return is 12 %
=> The weight of your portfolio is 2 for the Google stock, and -1 for the Yahoo stock. The negative sign for the Yahoo stock indicates a short position in the stock. The expected return is the weighted average of the returns on the two stocks:
2 * 15% + (-1) * 12% = 18%The volatility of the portfolio is:
[tex]\sqrt{2^{2}*0.15^{2} + -1^{2}*0.25^{2} +2*2*(-1)*0.9*0.15*0.25 }[/tex] = 13.23 %
The expected return of the portfolio is 18%, and the portfolio's volatility is approximately 13.22%.
To find the expected return and volatility of the portfolio, we can use the concept of portfolio theory. The expected return of the portfolio is a weighted average of the expected returns of the individual assets, and the portfolio volatility is determined by the weights, volatilities, and the correlation between the assets.
First, let's calculate the expected return of the portfolio:
1. Calculate the total investment amount:
Total Investment = Investment + Short Sale
Total Investment = $20,000 - $10,000 = $10,000
2. Calculate the weighted returns of two companies:
Weighted Return of G = (Investment / Total Investment) * Expected Return
Weighted Return of Y = (Short Sale Amount in Y / Total Investment) * Expected Return of Y
Weighted Return of G = ($20,000 / $10,000) * 15% = 30%
Weighted Return of Y = ($10,000 / $10,000) * (-12%) = -12%
3. Calculate the expected return of the portfolio:
Expected Return of Portfolio = Weighted Return + Weighted Return of Y
Expected Return of Portfolio = 30% - 12% = 18%
So, the expected return of the portfolio is 18%.
Now, let's calculate the portfolio's volatility:
The formula for portfolio volatility in a two-asset portfolio is:
Portfolio Volatility = √[ (Weight)^2 * (Volatility)^2 + (Weight )^2 * (Volatility)^2 + 2 * Weight of G * Weight of Y * Volatility of G * Volatility of Y * Correlation ]
Plugging in the values:
Portfolio Volatility = √[ (1)^2 * (0.30)^2 + (-1)^2 * (0.25)^2 + 2 * 1 * (-1) * 0.30 * 0.25 * 0.90 ]
Portfolio Volatility ≈ √[0.090 + 0.0625 - 0.135]
Portfolio Volatility ≈ √[0.0175] ≈ 0.1322 or 13.22%
So, the expected return of the portfolio is 18%, and the portfolio's volatility is approximately 13.22%.
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Problem 10-171 The following labor standards have been ... The following labor standards have been established for a particular product: Standard labor hours per unit of output 4.5 hours Standard labor rate $19.70 per hours The following data pertain to operations concerning the product for the last month: Actual hours worked 6,500 hours Actual total labor cost $130,975 Actual output 1,400 units Required: a. What is the labor rate variance for the month
Answer:
Labour rate variance $2,925 unfavorable
Explanation:
The labour rate variance is the difference between the standard labour cost allowed for the actual hours worked and the actual labor cost for the same hours
$
Standard labour cost ($19.70× 6500) 128,050
Actual labour cost 130,975
Labour rate variance 2,925 unfavorable
Naylor Company had $154,200 of net income in 2016 when the selling price per unit was $155, the variable costs per unit were $95, and the fixed costs were $572,900. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Naylor Company is under pressure from stockholders to increase net income by $61,200 in 2017. Compute the number of units sold in 2016.
Answer:
Units sold in 2016 = 12118.33
Explanation:
Given that
Net income = 154200
Fixed inputs = 572900
Selling price per unit = 155
Variable cost per unit = 95
Recall that
Net income = total revenue - total expenses
And that
Net income = (selling price - variable cost) × number of goods sold - fixed cost
Thus
154200 = (155 - 95)x - 572900
572900 + 154200 = 60x
727100 = 60x
x = 727100/60
x = 12,118.33 units
Answer:
The number of units sold in 2016 is 12,118 units
Explanation:
Number of units to sold in 2016=fixed costs+target profit/contribution per unit
fixed costs is $572,900
target profit=$154,200
Contribution per unit =selling price per unit -variable cost per unit
selling price per unit is $155
variable cost per unit is $95
contribution per unit=$155-$95
contribution per unit =$60
Number of units sold in 2016=($572,900+$154,200)/$60
number of units sold in 2016=$727,100/$60
number of units sold in 2016= 12,118.33 units
the number of units sold in 2016 is 12,118
Steinberg Corporation and Dietrich Corporation are identical firms except that Dietrich is more levered. Both companies will remain in business for one more year. The companies' economists agree that the probability of the continuation of the current expansion is 70 percent for the next year, and the probability of a recession is 30 percent. If the expansion continues, each firm will generate earnings before interest and taxes (EBIT) of $4.6 million. If a recession occurs, each firm will generate earnings before interest and taxes (EBIT) of $1.4 million. Steinberg's debt obligation requires the firm to pay $1,000,000 at the end of the year. Dietrich's debt obligation requires the firm to pay $1.5 million at the end of the year. Neither firm pays taxes. Assume a discount rate of 12 percent. What are the current market values of Steinberg's equity and debt? What are the current market values of Dietrich's equity and debt? Steinberg's CEO recently stated that Steinberg's value should be higher than Dietrich's because the firm has less debt, and, therefore, less bankruptcy risk. Do you agree or disagree with this statement?
Answer: kindly see Explanation.
Explanation:
STEINBERG Expansion Recession
Probability 70% 30%
EBIT 4,600,000 1,400,000
Payoff (bond) 1,000,000 1,000,000
Payoff(stock) 3,600,000 400,000
DIETRICH Expansion Recession
Probability 70% 30%
EBIT 4,600,000 1,400,000
Payoff (bond) 1,500,000 1,500,000
Payoff(stock) 3,100,000 (100,000)
Discount rate = 12%
Steinberg potential payoffs:
Equity = (0.7 × 3,600,000 + 0.3 × 400,000)/1.12 = 2357142
Debt = (0.7 × 1,000,000 + 0.3 × 1,000,000)/1.12 = 892857.14
Dietrich potential payoffs:
Equity = (0.7 × 3,100,000 + 0.3 × - 100,000)/1.12 = 1910714
Debt = (0.7 × 1,500,000 + 0.3 × 1,500,000)/1.12 = 1339285
B.) STEINBERG
DEBT + Equity = 2357142+892857 = $3249999
DIETRICH
DEBT + Equity = 1910714+1339285 = $3249999
Due to the identical nature of the two EBITs, it shows a redistribution of wealth between the stock and bond holders.
You have just used the network planning model for a county road resurfacing project and found the critical path length is 40 days and the standard deviation of the critical path is 10 days. Suppose you want to pick a time (in days) within which you will complete the project with 90% confidence level, what should be that time (in days and round to the nearest whole number.)
A. 40B. 13C. 45D. 29E. 53
Answer: E.53
Explanation:
From the above information, the formula for due date is given below.
DUE DATE = Expected Completion Time + (Z * Standard Deviation)
A confidence level refers to the percentage of all possible samples that can be expected to contain the true population parameter. It is computed according to a random sample from the population and most times always associated with a certain confidence level that is a probability, usually presented as a percentage. The 90% says that 90% will include the true mean but 10% won't.
A Z-score is referred to as a numerical measurement that is made use of in statistics of a value's relationship to the mean (that is average) of a group of values, measured in terms of standard deviations away from the mean.
Expected time = 40
Confidence interval = 90 = Z VALUE of 1.282
Standard Deviation= 10
DUE DATE = 40 + (1.282 * 10) = 53days
= 40+ 12.82
=52.82
Approximately 53
Therefore,the time in days is 53 days.
Answer:
E- 53
Explanation:
FORMULA:
DUE DATE = EXPECTED COMPLETION TIME + (Z * STDEV)
Expected time = 40
CONFIDENCE INTERVAL = 90 = Z VALUE OF 1.282
STANDARD DEVIATION = 10
DUE DATE = 40 + (1.282 * 10) = 53
Embassy Club Condominium, located on the west coast of Florida, is undertaking a summer renovation of its main building. The project is scheduled to begin May 1, and a September 1 (17-week) completion date is desired. The condominium manager identified the following renovation activities and their estimated times:
Activity Immediate Predessor Time
A - 3
B - 1
C - 2
D A,B,C 4
E C,D 5
F A 3
G D,F 6
H E 4
a. Draw a project network.
b. What are the critical activities?
c. What activity has the most slack time?
Find the pictures in attachment
James Company began the month of October with inventory of $20,000. The following inventory transactions occurred during the month: The company purchased merchandise on account for $29,500 on October 12, 2018. Terms of the purchase were 2/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $550 were paid in cash. On October 31, James paid for the merchandise purchased on October 12. During October, merchandise costing $18,750 was sold on account for $29,000. It was determined that inventory on hand at the end of October cost $30,710. Required: 1. Assuming that the James Company uses a periodic inventory system, prepare journal entries for the above transactions including the adjusting entry at the end of October to record cost of goods sold. 2. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the above transactions.
Answer and Explanation:
1. Periodic inventory system
a.Purchase Dr, $28,910
To Accounts payable $28,910
(Being purchase of inventory is recorded)
Working note
Purchase discount = Gross purchase × Purchase discount rate
= $29,500 × 2%
= $590
Net purchase = Gross purchase - Purchase discount
= $29,500 - $590
= $28,910
Freight-in Dr, $550
To Cash $550
(Being freight cost is recorded)
b. Accounts payable Dr, $28,910
Interest expense Dr, $590
To Cash $29,500
(Being the payment made to suppliers is recorded)
c. Accounts receivable Dr, $29,000
To Sales revenue $29,000
(Being the sale on account is recorded)
For cost of goods sold no Journal entry is required under periodic method
Adjusting entry of year end
Ending Merchandise inventory Dr,$30,710
Cost of goods sold Dr, $18,750
To Beginning inventory $20,000
To Purchases $28,910
To Freight-in $550
(Being cost of goods sold is recorded)
Perpetual inventory system
Merchandise inventory Dr, $28,910
To accounts payable $28,910
(Being purchase of inventory is recorded)
Freight
Merchandise inventory Dr, $550
To cash $550
b. Payment of accounts payable
Accounts payable Dr, $28,910
Interest expenses Dr, $590
To Cash $29,500
(Being payment made to supplier is recorded)
Sales
Accounts payable Dr, $29,000
To Service revenue $29,000
(Being Sales is recorded)
Cost of goods sold
Cost of goods sold Dr,$18,750
To merchandise inventory $18,750
(Being Cost of goods sold is recorded)
d. Adjusting entry of year end
No Journal entry is required
The Ayayai Company issued $260,000 of 10% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds were issued at 98. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Ayayai Company records straight-line amortization semiannually
Answer:
Journal entries on January 1:
Dr Cash $254,800
Dr Discount on bonds payable$5200
Cr Bonds payable $260,000
July 1:
Dr Interest expense $13,520
Cr cash $13,000
Cr Discount on bonds payable $520
December 31:
Dr Interest expense $13,520
Cr cash $13,000
Cr Discount on bonds payable $520
Explanation:
The proceeds of issue =$260,000*98%=$254,800
Discount on bonds payable=Par value-cash proceeds
par value is $260,000
Discount on bonds payable=$260,000-$254,800=$5200
The discount amortization on semi-annual basis=$5200 /5*6/12=$520
Semi-annual interest on the bond =$260,000*10%*6/12=$13,000.00
Consider the market for wheat where demand is given by: Upper Q Superscript d Baseline equals 80 minus 2 p and supply is given by: Upper Q Superscript s Baseline equals 40 plus 1 p. Now suppose that, due to a market failure (an artificial shipping constraint), a maximum of 43.34 units of wheat can be supplied by firms in the market. (p = The amount of the deadweight loss caused by the market failure is $ nothing. (Enter your answer rounded to the nearest penny and as a positive number.)
Deadweight loss occurs due to a disparity between supply and demand. In this case, a shipping constraint caused a surplus of demand over supply in the wheat market, leading to a deadweight loss.
Explanation:The question is asking about the deadweight loss that occurs in the market for wheat due to an artificial shipping constraint that limits supply. Deadweight loss occurs when there's a difference between the equilibrium supply and demand and the quantity that is actually traded in the market. In your case, firms can only supply a maximum of 43.34 units of wheat because of this shipping constraint.
First, we should find out what's the equilibrium quantity and price for wheat without any market failure (ship constraints), by equating the demand function Qd=80-2p to the supply function Qs=40+1p. Solving this we get the equilibrium price represented as Pe and quantity as Qe. According to your provided demand and supply equations, we see that demand exceeds supply - indicative of a surplus.
This surplus represents the deadweight loss, which basically says that there are more goods that consumers want to buy at a certain price than what's available or being produced. This is also represented graphically in figure 3.22, as the area between the supply and demand curves from Qd up to the quantity supplied by firms of 43.34 units of wheat.
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The deadweight loss in the market for wheat can be calculated by identifying the equilibrium price without the market failure (the artificial shipping constraint), calculating the surplus difference between the quantities supplied and demanded at this price, and comparing this to the quantity that can be supplied due to the shipping constraint. This difference represents the deadweight loss.
Explanation:Calculating Deadweight LossThe first step to calculate the deadweight loss is to identify the equilibrium price without the artificial shipping constraint. With the demand function Qd = 80 - 2p and the supply function Qs = 40 + 1p, we can find the equilibrium price (p) by setting Qd equal to Qs: 80 - 2p = 40 + 1p. Solving this equation will give us the equilibrium price.
Next, we calculate the quantity supplied and demanded using the equilibrium price obtained. The difference between these two quantities is known as the surplus.
Now, using the shipping constraint- a maximum of 43.34 units, which is lower than the quantity supplied, we can calculate the loss due to this constraint. This lost surplus represents the deadweight loss caused by the market failure (the shipping constraint in this question).
Therefore, to calculate the deadweight loss caused by the market failure, we can use the approach explained above.
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Nielson Motors has a share price of $25 today. If Nielson Motors is expected to pay a dividend of $0.75 this year, and its stock price is expected to grow to $26.75 at the end of the year, then Nielsen's dividend yield and equity cost of capital are:
Answer:
Dividend Yield = 3%
Equity cost of capital = 10%
Explanation:
Dividend yield is a financial ratio which is used by investors to assess a company's annual dividend payout in comparison of its stock price. The formula for dividend yield ratio is :
Annual dividend / Stock price
$0.75 / $25 = 3%
Equity cost of capital is the rate of return required by the investors of equity. This is the rate which a company must pay to raise funds. The formula for finding equity cost of capital is :
Dividend Yield + (Expected Stock price - Stock price today) / Stock price today
3% + ($26.75 - $25 ) / $25 = 10%
The dividend yield for Nielson Motors is 3%, calculated by dividing the dividend by the current share price. The equity cost of capital is 10%, calculated by adding the dividend yield to the rate of capital gains.
Explanation:The dividend yield and equity cost of capital for Nielson Motors can be calculated simply with the given information. The dividend yield is the dividend divided by the current share price, so that would be $0.75/$25 = 0.03 or 3%. The equity cost of capital, on the other hand, represents the total return expected by investors. It is calculated by adding the dividend yield to the rate of capital gains. The rate of capital gains is the expected price increase divided by the current price, which is ($26.75-$25)/$25 = 0.07 or 7%. Therefore, the equity cost of capital is 3% (dividend yield) + 7% (rate of capital gains) = 10%.
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Gubser Welding, Inc., operates a welding service for construction and automotive repair jobs. Assume that the arrival of jobs at the company's office can be described by a Poisson probability distribution with an arrival rate of two jobs per 8-hour day. The time required to complete the jobs follows a normal probability distribution, with a mean time of 3.2 hours and a standard deviation of 2 hours. Answer the following questions, assuming that Gubser uses one welder to complete all jobs:
What is the mean arrival rate in jobs per hour? Round your answer to four decimal places.
jobs per hour
What is the mean service rate in jobs per hour? Round your answer to four decimal places.
jobs per hour
What is the average number of jobs waiting for service? Round your answer to three decimal places.
What is the average time a job waits before the welder can begin working on it? Round your answer to one decimal place.
hours
What is the average number of hours between when a job is received and when it is completed? Round your answer to one decimal place.
hours
What percentage of the time is Gubser's welder busy? Round your answer to the nearest whole number.
Answer:
Mean arrival rate = 0.25 job per hour
Mean service rate = 0.3125 job per hour
Average number of job = 1.85
Average time taken = 7.4 hour
Average number of hours a job received and completed = 10.6 hours
Gubser's welder busy percentage of time = 80%
Explanation:
As per the data given in the question,
Mean arrival rate = 2 ÷ 8 = 0.25 job per hour
Mean service rate = 1 ÷ 3.2 = 0.3125 job per hour
Average number of job = (Mean arrival rate^2 × Standard deviation^2 + (mean arrival rate ÷ mean service rate)^2) ÷ 2(1 - (mean arrival rate ÷ mean service rate)^2)
= (0.25^2 × 2^2 + (0.25 ÷ 0.3125)^2) ÷ 2(1-(0.25 ÷ 0.3125))
= 0.25 + 1.60
= 1.85
Average time taken by job waiting = Average number of job waiting ÷ Mean arrival rate
= 1.85 ÷ 0.25
= 7.4 hours
Average number of hours a job received and completed = Average time taken by job waiting + 1 ÷ Mean service rate
= 7.4 + 1 ÷ 0.3125
= 10.6 hours
Gubser's welder busy percentage of time = Mean arrival rate ÷ Mean service rate
= 0.25 ÷ 0.3125
= 0.80
= 80%
The mean arrival rate in jobs per hour at Gubser Welding, Inc., is 0.25, while the mean service rate is 0.3125 jobs per hour. The other questions related to queuing theory, such as the average number of jobs waiting or the percentage of time the welder is busy, require more complex calculations that cannot be determined with the given information alone.
Explanation:To calculate the mean arrival rate in jobs per hour for Gubser Welding, Inc., we divide the total number of jobs by the number of hours in the workday. With an arrival rate of two jobs per 8-hour day, we find that:
Mean arrival rate = Total jobs / Total hours = 2 jobs / 8 hours = 0.25 jobs per hour.
To find the mean service rate in jobs per hour, which is how many jobs the welder can complete per hour, we use the inverse of the mean time to complete one job:
Mean service rate = 1 / Mean time per job = 1 / 3.2 hours = 0.3125 jobs per hour.
The average number of jobs waiting for service and the average time a job waits before the welder can begin working on it can be computed through queuing theory formulas, which typically require more advanced calculations and software. In this case, given only the arrival and service rates, we cannot complete these calculations properly without further information or assumptions regarding the queue discipline, system capacity, or the number of servers (welders).
Similarly, the average number of hours between when a job is received and when it is completed, and the percentage of time the welder is busy, also depend on specific queuing theory calculations.
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Exercise 11-1 Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 19,000,000 Net operating income $ 6,100,000 Average operating assets $ 36,500,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
1. Margin = 0.32 or 32%
2. Turnover = $19,000,000 or Operating Asset Turnover = 0.52 or 52%
3. Return on Investment = 0.17 or 17%
Explanation:
Firstly, list out the parameters we were given:
Sales = $19,000,000, Net Operating Income = $6,100,000,
Average Operating Assets = $36,500,000
1. Operating Margin = Net Operating Income / Sales
Operating Margin = 6,100,000 ÷ 19,000,000 = 0.32
Operating Margin = 0.32 (to 2 decimal places)
Operating Margin = 32%
2. Turnover refers to sales or revenue made during a particular period. In which case turnover is $19,000,000
However, if the turnover referred to is the Operating Asset Turnover, that is calculated below:
Operating Asset Turnover = Sales / Average Operating Assets
Operating Asset Turnover = 19,000,000 ÷ 36,500,000
Operating Asset Turnover = 0.52 (to 2 decimal places)
Operating Asset Turnover = 52%
3. Return on Investment (ROI) = Net Operating Income / Average Operating Assets
Return on Investment (ROI) = 6,100,000 ÷ 36,500,000
Return on Investment (ROI) = 0.17 (to 2 decimal places)
Return on Investment (ROI) = 17%
Final answer:
To compute the ROI for Alyeska Services Company, the margin is found to be 32.11% and the turnover is 0.52. Using these calculations, the ROI is determined to be 16.70%.
Explanation:
To calculate the Return on Investment (ROI) for Alyeska Services Company, we first need to compute the margin, turnover, and then use these figures to calculate the ROI.
Margin Calculation
The margin is calculated by dividing the Net operating income by the Sales and then multiplying by 100 to get a percentage:
Margin = (Net operating income \/ Sales) * 100
Margin = ($6,100,000 \/ $19,000,000) * 100
Margin = 32.11%
Turnover Calculation
The turnover is calculated by dividing the Sales by the Average operating assets:
Turnover = Sales \/ Average operating assets
Turnover = $19,000,000 \/ $36,500,000
Turnover = 0.52
ROI Calculation
ROI is calculated by multiplying the margin by the turnover:
ROI = Margin * Turnover
ROI = 32.11% * 0.52
ROI = 16.70%
Kennywood Inc., a manufacturing firm, is able to produce 1 comma 200 pairs of pants per hour, at maximum efficiency. There are three eightminushour shifts each day. Due to unavoidable operating interruptions, production averages 900 units per hour. The plant actually operates only 27 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 501 comma 000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 517 comma 000. Assume the month has 30 days. What is the practical capacity for the month?
Answer:
583,200 units
Explanation:
Practical capacity per unit = 900 units per hour
Hours per shift = 8 hours
Number of hours worked each day = 3 shifts * 8 hours = 24 hours
Number of days of operation in a month = 27 days
Practical capacity for the month = 900 * 24 * 27 = 583,200 units
The Fox TV network is considering replacing one of its prime-time crime investigation shows with a new family-oriented comedy show. Before a final decision is made, network executives commission a sample of 400 viewers. After viewing the comedy, 250 indicated they would watch the new show and suggested it replace the crime investigation show a. Estimate the value of the population proportion.b. Develop a 99 percent confidence interval for the population proportion.c. Interpret your findings.
Answer:
a. 0.625
b. [tex]0.5625\leq p\leq 0.6875[/tex]
Explanation:
The estimate value of the population proportion p' is calculated using the data from the sample, so it is equal to:
[tex]p'=\frac{250}{400} =0.625[/tex]
Because the sample have 400 viewers and 250 indicated that they would watch the new show and suggested.
It mean that 0.625 is an estimation of the population proportion.
On the other hand, the confidence interval for the population proportion p is calculated as:
[tex]p'-z_{\alpha /2}\sqrt{\frac{p'(1-p')}{n} } \leq p\leq p'+z_{\alpha /2}\sqrt{\frac{p'(1-p')}{n} }[/tex]
Where [tex]p'[/tex] is the sample proportion, [tex]1-\alpha[/tex] is the confidence level, and n is the size of the sample.
Now, we need to replace p' by 0.625, n by 400 and [tex]1-\alpha[/tex] by 0.99.
If [tex]1-\alpha[/tex] is equal to 0.99, [tex]\alpha[/tex] is equal to 0.01 and, using the standard normal distribution table, [tex]z_{\alpha /2}[/tex] is equal to: [tex]z_{\alpha /2}=z_{0.005}=2.58[/tex]
Then, the 99 percent confidence interval for the population proportion is calculated as:
[tex]0.625-(2.58)\sqrt{\frac{0.625(1-0.625)}{400} } \leq p\leq 0.625+(2.58)\sqrt{\frac{0.625(1-0.625)}{400} }\\0.625-0.0625\leq p\leq 0.625+0.0625\\0.5625\leq p\leq 0.6875[/tex]
It means that with a 99% of confidence level, the value of population proportion of people that would watch the new show and suggested is between 0.5625 and 0.6875
Item12 10 points eBookPrintReferences Check my work Check My Work button is now enabledItem 12Item 12 10 points Problem 4-19 Loaded-Up Fund charges a 12b-1 fee of 0.75% and maintains an expense ratio of 0.75%. Economy Fund charges a front-end load of 2.5%, but has no 12b-1 fee and an expense ratio of 0.25%. Assume the rate of return on both funds’ portfolios (before any fees) is 7% per year. How much will an investment of $1,000 in each fund grow to after:
a. 1 year
b. 3 years
c. 10 years
Answer:
Loaded-up fund:
1-year: 1,055
3-year: 1.174,24
10-year: 1,708.14
Economy Fund:
1-year: 1,040.81
3-year: 1,186.06
10-year: 1,873.63
Explanation:
Loaded-up fund:
0.75% + 0.75% = 1.5%
7% return - 1.5% = 5.5%
after a year:
1,000 x 1.055 = 1,055
after three years:
1,000 x 1.055^3 = 1.174,24
after ten years:
1,000 x 1.055^10 =1,708.14
Economic Fund:
discounting the front-end load
1,000 x (1 - 0.025) = 975
then:
7% - 0.25% = 6.75%
after a year:
975 x 1.0675 = 1.040,81
after three years:
975 x 1.0675^3 = 1.186,06
after ten years:
975 x 1.0675^10 =1,873.63
Three years ago, Joe bought a 5-year, 10% coupon paid semiannually bond for $1000. Currently, with interest rates having risen sharply, the bond is selling for $800 and you decide to sell it off. If you had re-invested the semi-annual coupons as you received them, what would your realized yield be over the 3-year holding period? Round to two decimal places.
Answer:
3.63%
Explanation:
Semiannual coupon payment
= $100 ÷ 2 = $50[($1,000 × 10%) ÷ 2]
The total number of compounding period = 2periods per year × 3 years = 6 periods.
By entering the following data on a financial calculator, rate is calculated as 1.81%.
Semiannual yield = 1.81%
Annual yield = 1.81% ×2 = 3.63%
Final answer:
To find the realized yield over a 3-year period, take into account both the capital loss and the reinvestment of semi-annual coupon payments. The future value of reinvested coupons is added to the proceeds from the sale, and this total return is compared to the initial investment to calculate the annualized realized yield.
Explanation:
Total coupon payments:
Coupons per year = 10%
Coupons per semester = 10% / 2 = 5%
Coupon payment per semester = $1000 * 5% = $50
Total coupon payments (3 years, 6 semesters) = $50/semester * 6 semesters = $300
Capital gain or loss:
Purchase price = $1000
Selling price = $800
Capital loss = $1000 - $800 = $200
The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Delacour, Inc. for an operating period. Units Unit Cost Total Cost Units Sold Beginning Inventory 30 $28 $ 840 Sale No. 1 20 Purchase No. 1 50 40 2,000 Sale No. 2 40 Purchase No. 2 20 44 880 __ Totals 100 $3,720 60 Assuming Delacour, Inc. uses FIFO perpetual inventory procedures, it records sale no. 2 as an entry to Cost of Goods Sold for:
Under the FIFO method, the Cost of Goods Sold (COGS) for Sale No. 2 amounts to $1480. This is calculated considering 10 units from the beginning inventory and 30 units from the first purchase.
Explanation:Delacour, Inc. uses the FIFO (First-In-First-Out) perpetual inventory procedure. So, to calculate the entry to Cost of Goods Sold (COGS) for Sale No. 2, we need to consider the costs of the earliest goods that were bought and are still available in the inventory. For Sale No. 2, 40 units were sold. The first 10 units come from the Beginning Inventory at $28/unit(total $280) and the next 30 units from Purchase No. 1 at $40/unit (total $1200). Therefore, the total COGS for Sale No. 2 is $280 (from beginning inventory) + $1200 (from Purchase No. 1), which equates to $1480.
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C. Explain why the company was able to issue the bonds for only $9,738,256 rather than for the face amount of $11,000,000. The bonds sell for less than their face amount because the market rate of interest is greater than the contract rate of interest. Investors Are not willing to pay the full face amount for bonds that pay a lower contract rate of interest than the rate they could earn on similar bonds (market rate).
Answer:
The bonds sell for less than their face amount because the market rate of interest is greater than the contract rate of interest. Investors Are not willing to pay the full face amount for bonds that pay a lower contract rate of interest than the rate they could earn on similar bonds (market rate).
Explanation:
When the required rate of return of investors is higher than the coupon rate of the bond, It means the investors have option in the market which offer more rate of return than the coupon rate offered by the bond, So the value of the bond falls which ultimately compensate the difference of investors required rate of return and Coupon rate.
Wilson was an agent of Noland. Peterson did not know Wilson was Noland's agent; Peterson did not know Wilson was anyone's agent. (Noland did not want anyone except Wilson to know of the agency). Wilson caused Peterson to suffer significant damages. Noland did not breach a duty of care either with respect to hiring or retaining Wilson. Within the time set by the applicable statute of limitations, Peterson sues Noland, seeking compensation for her damages. Peterson cannot show that Wilson owed her a duty of care. Will Peterson prevail?
Answer:
No Peterson will not prevail.
Explanation:
In this scenario as at the time of the injury Peterson did not know that Wilson was an agent of Noland.
Duty of care is the obligation that one has to ensure the safety of another person. For example an employer that has a duty of care to protect his employee.
Noland did not have a duty of care to Wilson, and Wilson in turn did not have a duty of care to Peterson.
So Peterson will not be able to prove a breach of duty of care. She cannot sue Noland for compensation for her damages
On January 10, 2017, Perez Co. sold merchandise on account to Robertsen Co. for $24,600, n/30. On February 9, Robertsen Co. gave Perez Co. a 11% promissory note in settlement of this account.Prepare the journal entry to record the sale and the settlement of the account receivable.
Answer:
Two entries are made one for sale and the other for the promissory note.
Perez Co
Date Particulars Debit Credit
January 10, 2017 Accounts Receivable $24,600, Dr
Merchandise $24,600,Cr
Sale of merchandise on account to Robertsen Co. for $24,600, n/30.
February 9, Notes Receivable $ 24600 Dr
Accounts Receivable $24,600 Cr
Robertsen Co. gave Perez Co. a 11% promissory note in settlement of this account.
As this note is given within the 30 days no cash has been paid in settlement of the accounts receivable. If any cash had been paid the entry would have been different.
Bass Boss Manufacturing Company manufactures two types of bass boats. Bass Boss provides the following data, pertinent to allocating its annual overhead cost of $435,000: Bass Boss Product Boss Boss Hog Bear Units per year 15,000 20,000 Machine hours/unit 3.0 5.0 Materials cost/unit $1,500 $2,000 Labor cost/unit $ 800 $1,000 Determine the allocation rate assuming the cost driver is machine hours/unit.
Answer:
the allocation rate is $3 per machine hour
Explanation:
Step 1 Find the to total Machine hours
Total Machine Hours
3.0×15,000 = 45,000
5.0×20,000 = 100,000
Total = 145,000
Step 2 Determine the Overhead allocation rate
Overhead allocation rate = Budgeted Overheads / Total Machine Hours
= $435,000/145,000
=$3 per machine hour
Answer:
Allocation rate = $3 per machine hour
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers. Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
Activity rate is calculated as:
Activity overhead for the period / Total cost drivers for the period
Total machine hours = (15,000 ×3hrs) +( 20,000 × 5 hrs)
= 145,000 hours
Overhead rate per machine her
= $435,000/145000 hours
= $3 per hour
Units to be Assigned Costs Eve Cosmetics Company consists of two departments, Blending and Filling. The Filling Department received 78,700 ounces from the Blending Department. During the period, the Filling Department completed 89,700 ounces, including 15,700 ounces of work in process at the beginning of the period. The ending work in process inventory was 4,700 ounces. How many ounces were started and completed during the period
Answer:
74,000 ounces
Explanation:
Eve cosmetics is using cost accounting methods to identify the ounces it produces during a period. Work in process are the units which are partially completed during the period. Completed units include the finished goods units. To calculate ounces started and completed during the period we minus beginning work in process from the ounces completed by Filling department.
89,700 ounces - 15,700 ounces = 74,000 ounces.
Suppose you observe the following situation:
Security Beta Expected Return
Pete Corp. 1.25 . 1323
Repete Co. .87 .0967
a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the risk-free rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
a. The expected return on the market is 10.89%
b. The risk-free rate is 1.52%
Explanation:
In order to calcuate the expected return on the market and the he risk-free rate we would have to use the following formulas:
Expected return=risk-free rate +Beta*(market rate- risk-free rate )
13.23=Rf+1.25*(Rm-Rf)
13.23=1.25Rm-0.25Rf
Rm=(13.23+0.25Rf)/1.25
To calculate the risk free rate, we use the following:
9.67=Rf+0.87*(Rm-Rf)
9.67=0.13Rf+0.87Rm
9.67=0.13Rf+0.87*(13.23+0.25Rf)/1.25
9.67=0.13Rf+9.20808+0.174Rf
Rf=(9.67-9.20808)/(0.13+0.174)
=1.52%(Approx)=risk free rate
Rm=(13.23+0.25Rf)/1.25
=10.89%(Approx)=market rate
Final answer:
The expected return on the market and the risk-free rate can be calculated using the CAPM formula and the provided beta and expected return of two securities. Comparing betas helps determine the relative risk of investments. Bond pricing involves discounting the expected payments by the current market interest rate.
Explanation:
Calculating Expected Market Return and Risk-Free Rate Using CAPM
To derive the expected return on the market (E(Rm)) using the Capital Asset Pricing Model (CAPM), we make use of the provided beta (ß) and expected return (E(Ri)) of each security. For Pete Corp., the formula based on CAPM is E(Ri) = Rf + ß(E(Rm) - Rf), and plugging in the values gives us 0.1323 = Rf + 1.25(E(Rm) - Rf). For Repete Co., plugging in the values gives us 0.0967 = Rf + 0.87(E(Rm) - Rf). By solving the set of these two linear equations, we can find both the expected return on the market and the risk-free rate (Rf).
To identify which investment is the safest or riskiest, we compare their betas. A lower beta indicates an investment is less volatile compared to the market and, thus safer. The highest expected return is reflected in the investment with the higher beta, however, this also comes with higher risk.
Estimating the Bond's Price
When a bond's interest rate is less than the current market interest rate, the bond's price will be discounted. For example, if a bond will pay $1,080 in one year, and the current market interest rate is 12%, the present value of the bond's payment is calculated using the formula PV = Expected Payment / (1 + Market Interest Rate). Therefore, the bond price would be calculated as $964.
Hawkeye Auto Parts uses the average cost retail method to estimate inventories. Data for the first six months of 2021 include: beginning inventory at cost and retail were $66,000 and $111,000, net purchases at cost and retail were $796,000 and $1,311,000, and sales during the first six months totaled $811,000. The estimated inventory at June 30, 2021, would be:
Answer:
$372,710
Explanation:
For determining the ending inventory first we need to do following computations which are given below:
As per cost method
Goods available for sale
= Beginning inventory + Net Purchase for the year
= $66,000 + $796,000
= $862,000
Under Retail method
Goods available for sale:
= Beginning inventory + Net Purchases for the year
= $111,000 + $1,311,000
= $1,422,000
Now
Cost to retail ratio is
= $862,000 ÷ $1,422,000
= 61%
And, Estimated ending inventory as per retail
= Goods available for sale at Retail - Net sales
= $1,422,000 - $811,000
= $611,000
Therefore, Estimated ending inventory as per cost is
= Estimated ending inventory at retail × Cost to retail ratio
= $611,000 × 0.61
= $372,710
Cat Co. forecasts merchandise purchases of $11,600 in January, $11,800 in February, and $15,400 in March; 40% of purchases are paid in the month of purchase and 60% are paid in the following month. At December 31 of the prior year, the balance of Accounts Payable (for December purchases) is $8,000. What is the cash disbursements for merchandise for the month of February
Answer:
The cash disbursements for merchandise in February is $11680
Explanation:
The cash disbursements for merchandise in February will include the payment for 60% of merchandise purchases for January and 40% of merchandise purchases for February.
The amount of January purchases to be paid in February = 0.6 * 11600 = 6960
The amount of February purchases to be paid in February = 0.4 * 11800 = 4720
The total amount of cash disbursements in February fro merchandise is,
6960 + 4720 = $11680