Answer:
B. $784,249
Explanation:
The effective interest amortization is an accounting practice used for discounting a bond. This method isused for bonds sold at a discount; the amount of the bond discount is amortised as interest expense over the bond's life
Interest expenses for 6 months from Jan 1st to Jun 30th is $392,083 = $9,802,072* 8%/2
Amortization of Discount is $2,083= $9,802,072* 8%/2 - 10,000,000*7.8%,/2
Carry Amount of Bond on June 30 $9,804,155= bond proceed of $9,802,072 + Amortization of Discount is $2,083
Interest expenses for 6 months from Jul 1st to Dec 31st is $392,166 = Carry amount of Bond $9,804,155 x effective rate 8%/2
Total interest expense will be recognized in 2018 is $784,249 = $392,083 + $392,166
The interest expense recognized in 2018 would be $784,166.
Explanation:To calculate the interest expense recognized in 2018, we need to determine the bond interest payable for the year. The bond interest payable is calculated by multiplying the carrying value of the bonds (proceeds from the bonds minus any initial discount or plus any initial premium) by the effective interest rate. In this case, the carrying value of the bonds on January 1, 2018, is $9,802,072, and the effective interest rate is 8%. Therefore, the interest expense recognized in 2018 would be $784,166 (rounded to the nearest dollar), option C.
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Lightning Cycles, Inc., makes Lightning-brand motorcycles and accessories, which are distributed to authorized dealers, including Macho Motors, Inc. Macho operates dealerships in several locations. Lightning imposes restrictions on Macho to limit the areas in which they sell the bikes and insulate other dealers from direct competition. This isa.a territorial restriction.b.a price maintenance agreement.c.a refusal to deal.d.a price-fixing agreement.
Answer:
The correct answer is letter "A": territorial restriction.
Explanation:
A territorial restriction is set by companies when they do not want to be exposed to different regions' laws, taxation systems, or competition. The territorial restriction establishes the boundaries where the goods or services can be offered and is usually passed from manufacturers to retailers.
Teall Development Company hired you as a consultant to help them estimate its cost of capital. You have been provided with the following data: D1 = $1.45; P0 = $19.00; and g = 6.50% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?
The cost of equity from retained earnings can be estimated by using the Gordon Growth Model. Plugging in the given values, the resulting cost of equity comes out to be approximately 7.63%.
Explanation:To calculate the cost of equity using the Dividend Discount Model (also known as the Gordon Growth Model), we use the following formula: Cost of Equity (ke) = [ D1 / P0 ] + g.
Plugging in the given values: D1 = $1.45 (dividend), P0 = $19.00 (stock price), and g = 6.50% (constant growth rate).
Our calculation would then look like this: ke = [ $1.45 / $19.00 ] + 0.065
So, the cost of equity from retained earnings based on the DCF approach would be: 0.0763 or 7.63% when we convert the decimal to a percentage.
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A monopolist has the total cost function c(q) = 750 + 5q. The inverse demand function is 140 - 7q, where prices and costs are measured in dollars. If the firm is required by law to meet demand at a price equal to its maginal costs,a. the firm will make positive profit but not as much profit as it would make if it were allowed to choose its own price.b. the firm's profits will be zero.c. the firm will lose $375d. the firm will lose $750e. the firm will lose $450
Answer:
d. the firm will lose $750
Explanation:
marginal cost is the derivate of the cost function: It represent the cost of producting an additional unit
cost: 750 + 5q
dC/dQ = 5
We have determinate that marginal cost is $5 thus, we should price at the same value. The mistake from the goverment is to equalize marginal cost with price instead of marginal revenue.
This will make the firm loss the fixed component of the cost as will sale to pay up the variable cost.
The fixed cost is $750 so that is the loss from operations
A monopolist that is required to meet demand at a price equal to its marginal costs will make positive profit but not as much profit as it would make if it were allowed to choose its own price.
Explanation:The monopolist will charge what the market is willing to pay. A dotted line drawn straight up from the profit-maximizing quantity to the demand curve shows the profit-maximizing price which, in this case, is $800. Since the firm is required to meet demand at a price equal to its marginal costs, the firm will make positive profit but not as much profit as it would make if it were allowed to choose its own price.
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You are advising Peter who is attempting to decide whether or not to drop one of the college courses he is currently enrolled in. If he drops the course, he will forfeit half of the money spent on tuition. If he stays in the class, he will have to give up his part-time job. His textbook is being replaced by a new edition, so is worthless at this time. Which of the following conclusions is consistent with capital budgeting principles?I. Remaining in the class incurs an opportunity cost.II. The entire tuition is irrelevant because it is a sunk cost.III. The cost of the book is a sunk cost.A) I onlyB) I and II onlyC) I and III onlyD) II and III onlyE) I, II, and III
Answer:
(E) I, II, and III
Explanation:
I. Remaining in the class incurs an opportunity cost.
II. The entire tuition is irrelevant because it is a sunk cost.
III. The cost of the book is a sunk cost.
An opportunity cost is the cost incurred when we choose to forgo an alternative option.
Sunk costs are costs that once they have been incurred or spent, they cannot be recovered or gotten back.
If Peter chooses to remain in the class, then he gives up his part-time job. The salary he would have made from the part-time job within that period of time is an opportunity cost he will have to forgo.
Also, the tuition fee and the cost of the textbook (which is now an old edition and worthless) have already been spent and cannot be recovered, therefore they are sunk costs.
A company wishes to report the highest earnings possible for financial reporting purposes.
Therefore, when calculating depreciation:
a. It will follow the MACRS depreciation tables prescribed by the IRS.
b. It will select the shortest lives possible for its assets.
c. It will select the lowest residual values for its assets.
d. It will estimate higher residual values for its assets.
Answer:
d. It will estimate higher residual values for its assets.
Explanation:
The depreciation is calculated on the value of the asset to be depreciated in the life of the asset that is cost - Salvage or residual value.
Thus, when the residual value is high then the amount to be depreciated will be low.
Then no matter whatever the method of depreciation be: the value of depreciation expense in dollars will be ultimately.
This will help in showing the highest earnings whatever the circumstance be.
Thus correct option is D.
Surround, Inc. provides the following data: Surround, Inc. Comparative Balance Sheet Dec. 31, 2019 Assets Current Assets: Cash and Cash Equivalents $29,000 Account Receivable, Net 31,000 Merchandise Inventory 53,000 Total Current Assets $113,000 Property, Plant, and Equipment, Net 120,000 Total Assets $233,000 Liabilities Current Liabilities: Accounts Payable $4,300 Notes Payable 2,900 Total Current Liabilities $7,200 Long-term Liabilities 90,000 Total Liabilities $97,200 Stockholders' Equity Common Stock $31,000 Retained Earnings 104,800 Total Stockholders' Equity $135,800 Total Liabilities and Stockholders' Equity $233,000 Calculate the debt to equity ratio.
Answer:
0.715
Explanation:
The Debt To equity Ratio is given as:
⇒ ( Debt ) ÷ ( Equity )
Here,
Debt = Long term liability + Total Current Liabilities
= $90,000 + $7,200
= $97,200
and,
Equity = Common stock + Retained earnings
= $31,000 + $104,800
= $135,800
Therefore, we get the
Debt to equity ratio = $97,200 ÷ $135,800
= 0.715
You own a portfolio that is 25 percent invested in Stock X, 40 percent in Stock Y, and 35 percent in Stock Z. The expected returns on these three stocks are 10 percent, 13 percent, and 15 percent, respectively What is the expected return on the portfolio? (Do not include the percent sign (%). Round your answer to 2 decimal places
Answer:
12.95%
Explanation:
Expected return of portfolio (rP) = wX*rX + wY*rY +wZ*rZ
wX= weight of X =25% or 0.25 as a decimal
rX = return of X = 10% or 0.10 " "
wY = weight of Y =40% or 0.40 " "
rY = return of Y = 13% or 0.13 " "
wZ = weight of Z = 35% or 0.35 " "
rZ = return of Z = 15% or 0.15 " "
Next, plug in the numbers to the above formula;
(rP) = (0.25*0.10) +(0.40*0.13) +(0.35 * 0.15)
= 0.025 + 0.052 + 0.0525
= 0.1295
Therefore expected return of portfolio = 12.95%
Final answer:
The expected return on the portfolio, which is comprised of three stocks with different weights and expected returns, is calculated to be 12.95 when rounded to two decimal places.
Explanation:
The expected return on the portfolio can be calculated by multiplying the weight of each stock by its respective expected return and then summing these products. Here's the formula and calculation:
Expected return on Stock X = Weight of Stock X * Expected return of Stock X = 0.25 * 10 = 2.5%Expected return on Stock Y = Weight of Stock Y * Expected return of Stock Y = 0.40 * 13 = 5.2%Expected return on Stock Z = Weight of Stock Z * Expected return of Stock Z = 0.35 * 15 = 5.25%To find the portfolio's expected return, add the expected returns of the individual stocks:
Expected return on the portfolio = Sum of individual expected returns = 2.5% + 5.2% + 5.25% = 12.95%The expected return on the portfolio, rounded to two decimal places, is 12.95.
Please answer the questions about cartels and the specific case of OPEC. Which statement is generally true of cartels? Cartels never stick to their agreed‑upon quotas. Cartels usually raise prices by expanding output. Cartels collude to raise prices and profits. In the United States, cartel members can legally meet to set prices. Which statement is true of OPEC? OPEC includes only nations from the Middle East. OPEC agreements are enforced by international law. OPEC sets production quotas in order to restrict supply. The United States is a leading member of OPEC.
Answer
The answer and procedures of the exercise are attached in the attached image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Final answer:
Cartels generally collude to restrict supply and raise prices, an action that is illegal for companies within the U.S. but practiced internationally by entities like OPEC. OPEC, which is not exclusively Middle Eastern, has maintained its cartel-like behavior through both economic and non-economic factors over decades.
Explanation:
When discussing cartels and their characteristics, it's generally true that cartels collude to raise prices and profits by agreeing upon quotas or output levels to restrict supply in the market. This collusion typically results in higher prices for consumers. For example, within the United States, it would be illegal for companies to sign contracts to act as a cartel to set prices, as collusion violates antitrust laws. In the international context, the Organization of Petroleum Exporting Countries (OPEC) is a notable example of a cartel-like entity that sets production quotas to control supply and thus influence global oil prices. However, the effectiveness of such international agreements is questionable because they are not legally enforceable under international law. This means if a member country like Nigeria decides to undermine the agreement by selling more oil at lower prices, other members like Saudi Arabia have no legal recourse to force compliance.
As for OPEC, it includes members from around the world, not only the Middle East, with countries like Venezuela, Nigeria, and Ecuador being part of this cooperative. Despite the challenges, OPEC has managed to exist for over four decades, due in part to economic as well as non-economic factors. These may include geopolitical influence, the need for cooperation amongst oil-rich countries, and perhaps a mutual understanding of the benefits that come from presenting a united front in the oil market.
The original marketing strategy of McDonald's in BrazilSelect one:a. promoted a beer with lunch.b. completely changed the menu to include Brazilian favorites.c. tried to Americanize Brazilian eating habits.d. took into consideration the Brazilian habit of eating hot foods, like hamburgers, on the beach.e. focused on the Sunday evening dinner market.
Answer:
c. tried to Americanize Brazilian eating habits
Explanation:
McDonald's is an American brand that popularize the eating burgers, that represents the american culture.
McDonald's has a culture of selling american and the country version of burgers where the outlet is located. But it do not sell the local dish in its food chain.
Accordingly in Brazil also the McDonald's was selling huge variety of burgers and was trying to create an American habit among the people of Brazil.
Thus, it was developing the eating habits of the people of Brazil in American way.
Hudson Co. reports the contribution margin income statement for 2015. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (9,600 units at $225 each) $2,160,000 Variable costs (9,600 units at $180 each) 1,728,000 Contribution margin $432,000 Fixed costs 324,000 Pretax income $108,000 If the company raises its selling price to $240 per unit. Compute Hudson Co.'s contribution margin per unit.
Answer:
$60 per unit
Explanation:
The computation of the contribution margin per unit is shown below:
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $240 per unit - $180 per unit
= $60 per unit
It shows a difference between selling price per unit and the variable cost per unit
All other information which is given is not relevant. Hence, ignored it
Suppose you are thinking about buying a share of Quack, Inc. You believe that BVR, Co. is a comparable company in terms of risk and as such can be used to help value Quack, Inc. If the earnings per share for Quack, Inc. is currently $2.00, the earnings per share for BVR is $3.00, and the price-to-earnings ratio for BVR is equal to 17.50, what is the price you would be willing to pay for Quack, Inc?
Answer:
Price per share for Quack Inc willing to pay is $35
Explanation:
Data provided in the question:
Earnings per share for Quack, Inc. = $2.00
Earnings per share for BVR = $3.00
Price-to-earnings ratio for BVR = 17.50
Now,
in the question, since it is believed that BVR, Co. is a comparable company in terms of risk and as such can be used to help value Quack, Inc
therefore,
the Price-to-earnings ratio for Quack, Inc will be equals to the Price-to-earnings ratio for BVR
Also,
P/E Ratio = Price per share ÷ Earnings per share
thus,
17.50 = Price per share for Quack Inc ÷ $2.00
or
Price per share for Quack Inc = $35
Universal Containers would like to remove data silos and connect their legacy CRM together with their ERP and with Salesforce. Most of their sales team has already migrated to Salesforce for daily use, although a few users are still on the old CRM until some functionality they require is completed. Which two techniques should be used for smooth interoperability now and in the future? (Choose 2 answers)
From the options the two techniques that should be used for smooth interoperability now and in the future are
a. Specify the legacy CRM as the system of record during transition until it is removed from operation and fully replaced by Salesforce.
b. Work with stakeholders to establish a Master Data Management plan for the system of record for specific objects, records, and fields.
Explanation:
Join the legacy CRM and Deal for interested parties are two techniques.
Indicate the conventional CRM as the record system throughout the transition up to Sales force’s removal and replacement.
Creates a comprehensive data management strategy for tracking processes for certain objects, databases, and areas, for stakeholders
What's a legacy process when it comes to CRM?
An old system mostly based on a customer-server in-house design. The application functions on a SQL Server or Oracle interface. There are one or more different application servers for Windows 2000 or 2003.
MDM (Master Data Management) is used in the sector as a tool for identifying and handling an organization's important data to provide, by data management, a single event of reference. The mastered data can include lookup tables — the collection of allowable values and quantitative data supporting decision-making.
Final answer:
The answer explains two techniques for achieving smooth interoperability between different systems.
Explanation:
Techniques for Smooth Interoperability:
Application Programming Interfaces (APIs): APIs can enable communication and data exchange between different systems, allowing Universal Containers to integrate Salesforce, the legacy CRM, and the ERP system seamlessly.
Middleware: Middleware software can act as a bridge between disparate systems, helping in the smooth flow of data and processes across the organization.
By utilizing APIs and Middleware, Universal Containers can achieve interoperability between Salesforce, the legacy CRM, and the ERP system, ensuring smooth data flow and connectivity.
On December 31, Mercury Corporation has the following data available:
Net Income $ 190,000
Interest expense 40,000
Total assets at the beginning of the year 800,000
Total assets at the end of the year 760,000
Total common stockholders' equity at the beginning of the year 530,000
Total common stockholders' equity at the end of the year 490,000
What is return on equity? (Round your final answer to two decimal places, X.XX%)
Answer:
37.25%
Explanation:
Average total common stockholders' equity:
= (Beginning common stockholders' equity + Ending common stockholders' equity) ÷ 2
= ($530,000 + $490,000) ÷ 2
= $510,000
Return on Equity = Net income ÷ Average total common stockholders' equity
= $190,000 ÷ $510,000
= 0.3725
= 37.25%
Expanding the number of stores in a foreign market, such as the expansion plan launched by Starbucks in China (announced in 2018), is a major capital budgeting project. A project of this scale requires coordinated planning across all functions of a business that you are studying in your Integrated Core classes. Choose and discuss three items on the income statement and balance sheet (a total of six items) that you think this new undertaking will effect. Explain why you chose those particular items, and how the marketing, management and operations decisions of the company will affect them.
Answer:
Consider the following explanation
Explanation:
To enter in the foreign market , any enterprises needs research and solid foundation to built a customer base for future. As given in the case Expanding the number of stores in a foreign market, such as the expansion plan launched by Starbucks in China (announced in 2018), is a major capital budgeting project. A project of this scale requires coordinated planning across all functions of a business .
Following are the items on the income statement and balance sheet that, this new undertaking will effect:
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Assume the Residential Division of KappyKappy Faucets had the following results last year: Net sales revenue $16,320,000 Operating income 6,528,000 Average total assets 5,100,000 Management's target rate of return 16% What is the division's asset turnover ratio?
Answer:
3.20
Explanation:
The computation of the asset turnover ratio is shown below:
Total asset turnover = (Net Sales revenue ÷ Average Total assets)
= ($16,320,000 ÷ $5,100,000)
= 3.20
It shows a ratio between the net sales revenue and the average total assets.
All other information which is given is not relevant. Hence, ignored it
When a perfect competitive industry is in long-run equilibrium,
a. Firm have no incentive to enter o exit the industry.
b. Market price is equal to minimum long-run average cost.
c. Each firm earns a normal return.
d. Both a ande
e. All of the above
Answer:
e. All of the above
Explanation:
A perfect competition is characterised by many buyers and sellers of identical products. Firms in a perfect competition are price takers.
In the long run, a perfect competitive firm produces where:
Price = marginal cost = marginal revenue = average long run cost. Producing at this point eliminates all forms of economic profit. Therefore, the firm earns only normal profit.
In the long run , there is zero economic profit, therefore, there would be no incentive for firms to enter into the market.
You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million dollars. Your plan is to deposit $15,000 at the end of each year for the next 10 years. You expect to earn 8 percent each year.a. Determine how much you will have saved after 10 years.b. Determine the amount saved if you were able to deposit $17, 500 each year.c. Determine the amount saved if you deposit $15,000 each year, but with 10 percent interest.
Answer:
a.) $217,298.44
b.) $253,514.84.
c.) $239,061.37 .
Explanation:
a. Determine how much you will have saved after 10 years
This is an ordinary annuity question and you are required to find the Future value (FV) at year 10. Using a financial calculator, key in the following inputs;
Total duration of investment; N = 10
Recurring payment; PMT = -15,000
Interest rate ; I/Y = 8%
PV = 0
then compute Future value; CPT FV = 217,298.437
Therefore, in 10 years, you will have saved $217,298.44 which does not meet your goal of half a million dollars.
b. Determine the amount saved if you were able to deposit $17, 500 each year.
With the recurring payment increasing to 17,500 per year and the interest rate remaining at 8%, find the new Future value by keying in the following inputs;
Recurring payment; PMT = - 17,500
Interest rate ; I/Y = 8%
Total duration of investment; N = 10
PV = 0
then compute Future value; CPT FV = 253,514.843
Therefore, in 10 years, you will have saved $253,514.84.
c. Determine the amount saved if you deposit $15,000 each year, but with 10 percent interest.
It is still an ordinary annuity question , however, the recurring payment(PMT) will be 15,000 as before but with an annual interest rate(I/Y) of 10%. Using a financial calculator, key in the following inputs;
Total duration of investment; N = 10
Recurring payment; PMT = -15,000
Interest rate ; I/Y = 10%
PV = 0
then compute Future value; CPT FV = 239,061.369
Therefore, in 10 years, you will have saved $239,061.37 .
"For Whitehair Company, beginning inventory is $12,000 and ending inventory is $15,000. Yearend account balances are: Freight-In $1,100 Purchases 50,000 Purchase Discounts 800 Purchase Returns and Allowances 1,250 Sales Discounts 2,500 Sales Returns and Allowances 3,600"Whitehair's Cost of Goods Purchased is $46,050. $49,050. $47,950. $51,100.
Answer:
$49,050
Explanation:
Given that,
beginning inventory = $12,000
ending inventory = $15,000
Freight-In = $1,100
Purchases = 50,000
Purchase Discounts = 800
Purchase Returns and Allowances = 1,250
Sales Discounts = 2,500
Sales Returns and Allowances = 3,600
Cost of goods purchased:
= purchases - purchase discounts - purchase returns & allowances + freight
= 50,000 - 800 - 1,250 + 1,100
= $49,050
At 13000 direct labor hours, the flexible budget for indirect materials is $26000. If $28400 are incurred at 13400 direct labor hours, the flexible budget report should show the following difference for indirect materials:
$2400 favorable.
$2400 unfavorable.
$1600 favorable.
$1600 unfavorable.
Answer:
Variance will be $1600 ( unfavorable )
So option (d) will be the correct option
Explanation:
We have given indirect labor hours = 13000
And the flexible budget for indirect material = $26000
So indirect material cost [tex]=\frac{flexible\ budget\ for\ indirect\ material}{indirect\ labor\ hour}=\frac{$26000}{13000}=2\ per\ direct\ labor\ hour[/tex
Budgeted Cost = 13400×2 = 26800
Actual Cost is given = $28400
So variance = $28400-$26800 = $1600 ( unfavorable )
So option (d) will be the correct option
A stock is expected to earn 15 percent in a boom economy and 7 percent in a normal economy. There is a 35 percent chance the economy will boom and a 65.0 percent chance the economy will be normal. What is the standard deviation of these returns?
A. 3.82 PercentB. 4.85 PercentC. 4.97 PercentD. 5.63 Percent.
Final answer:
To determine the standard deviation of the stock's returns, we calculate the expected return, then use this to find the variance, and take the square root of the variance to get the standard deviation. The correct answer is 3.82%.
Explanation:
To calculate the standard deviation of the returns for this stock, we first need to determine the expected return (mean) using the given probabilities. The expected return is calculated as follows:
Expected return = (Probability of boom × Return in boom) + (Probability of normal economy × Return in normal economy)Expected return = (0.35 × 0.15) + (0.65 × 0.07)Expected return = 0.0525 + 0.0455 = 0.098 or 9.8%Next, we calculate the variance of the returns, which is the sum of the squared deviations of each possible return from the expected return, weighted by their probabilities:
Variance = [tex]([/tex]robability of boom × [tex]([/tex]eturn in boom - Expected return[tex])^2)[/tex]Probability of normal economy × [tex]([/tex]eturn in normal economy - Expected return[tex])^2)[/tex]Variance = [tex]([/tex].35 × (0.15 - 0.098[tex])^2)[/tex]0.65 × [tex]([/tex].07 - 0.098[tex])^2)[/tex]Variance = (0.35 × 0.002722) + (0.65 × 0.000784)Variance ≈ 0.000953 + 0.00051 ≈ 0.001463Standard deviation is the square root of the variance:
Standard deviation = √VarianceStandard deviation ≈ √0.001463Standard deviation ≈ 0.03825 or 3.825%Therefore, the correct answer is A. 3.82 Percent.
Mullineaux Corporation has a target capital structure of 60 percent common stock, 15 percent preferred stock, and 25 percent debt. Its cost of equity is 10 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 6 percent. The relevant tax rate is 35 percent. What is the company’s WACC?
Answer:
7.58%( Approximately).
Explanation:
Please see attachment
Kramerica Industries is a AAA-rated company that needs to fund a project with an estimated life of 10 years. It can borrow at a fixed rate of 8.75% or it can borrow at a floating rate of 3-month LIBOR. Vandelay Industries is a BBB-rated company that also needs to borrow for 10 years. It can borrow at a fixed rate of 10.50% or it can borrow at a floating rate of3-month LIBOR + .25%. Produce a swap quote that reduces the borrowing costs of both Kramerica and Vandelay Industries, and makes a spread for the swap bank, Super Terrific National Bank.Show how much each company saves and how much is made by STNB
Answer:
Please see attachment
Explanation:
Please see attachment
The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the number of production runs for this problem?
Answer:
Number of production runs will be 184
Explanation:
We have given setup cost K = $50
Demand = 3650 units
Holding cost h = $12 per unit per year
Daily demand rate = 10
And daily production rate = 100
So [tex]x=\frac{10}{100}=0.1[/tex]
We know that production order quantity is given as\
[tex]=\sqrt{\frac{2KD}{h}\times (1-x)}=\sqrt{\frac{2\times 50\times 3650}{12}\times (1-0.1)}=184[/tex]
So the number of production runs will be 184
The production order quantity model indicates the company should produce approximately 374 units per run. To accommodate the annual demand, this will require about 10 production runs.
Explanation:The production order quantity model is used to determine the most cost-effective quantity of units to produce. In this case, the student is asking about the number of production runs, given a specific scenario. First, we need to calculate the Economic Production Quantity (EPQ). The formula for EPQ is: sqrt( (2 × D × S) / H ) × sqrt( (p / (p - d)) ), where D is the annual demand, S is the setup cost, H is the holding cost per unit per year, p is the production rate, and d is the demand rate.
So, substitute the given values into the EPQ formula: sqrt( (2 ×3650 × 50) / 12 ) ×sqrt( (100 / (100 - 10)) ) = 374.17 units. This means the optimal quantity to produce per run is approximately 374 units.
To find the number of production runs, divide the annual demand by the EPQ. So, 3650 / 374.17 = 9.75. Round this up to the nearest whole number, 10. So, the company should have about 10 production runs in a year to meet the annual demand in the most cost-effective way.
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At the end of the year, the deferred tax asset account had a balance of $12.8 million attributable to a cumulative temporary difference of $32 million in a liability for estimated expenses. Taxable income is $38.0 million. No temporary differences existed at the beginning of the year, and the tax rate is 40%.Prepare the journal entry(s) to record income taxes assuming it is more likely than not that one-fourth of the deferred tax asset will not ultimately be realized.NOTE:These are the correct entries, I am just missing the values (DTA is NOT zero):Debit: Income Tax Expense ______Debit Deferred Tax Asset _____Credit: Income Tax Payable 15.2Debit: Income Tax Expense _______Credit: Valuation Allowance - Deferred Tax Asset _______
Answer:
Please see attachment.
Explanation:
Please see attachment.
Buffet Company was organized in January 2014 and has 1,000 shares of $200 par value, 10 percent, cumulative preferred stock outstanding and 3,000 shares of $1 par value common stock outstanding. Dividends declared and paid each year are $10,000 in 2014, $15,000 in 2015, and $75,000 in 2016. During 2016, the dividends that must be paid to the preferred and common stockholders, respectively, total _____.$35,000 and $40,000Other Types of and Reasons for Issuing Preferred Stock 01Nonparticipating preferred stockhas a feature that limits dividends to a maximum amount each year. After preferred stockholders receive this maximum amount, the common stockholders receiveany and all additional dividends.Participating preferred stockhas a feature allowing preferred stockholders to share with common stockholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock. This participation feature does not apply until common stockholders receive dividends equal to the preferred stock's dividend percent. Corporations rarely issue participating preferred stock.Convertible preferred stockgives holders the option to exchange their preferred shares for common shares at a specified rate.Callable preferred stockgives the issuing corporation the right to purchase (retire) this stock from its holders at specified future prices and dates. The amount paid to call and retire a preferred shareis its call price and is set when the stock is issued. The call price normally includes the stock's par value plus a premium giving holders additional return on their investment. When the issuing corporation calls and retires a preferred stock, the terms of the agreement often require it to pay the call price and any dividends in arrears.Other Types of and Reasons for Issuing Preferred Stock 02Corporations issue preferred stock for several reasons. One is to raise capital without sacrificing control. For example, suppose a company's organizers have $100,000 cash to invest and organize a corporation that needs $200,000 of capital to start. If they sell $200,000 worth of common stock (with $100,000 to the organizers), they would have only 50 percent control and need to negotiate extensively with other stockholders in making policy. However, if they issue $100,000 worth of common stock to themselves and sell outsiders $100,000 of 8 percent, cumulative preferred stock with no voting rights, they retain control.A second reason to issue preferred stock is to boost the return earned by common stockholders. Let's suppose the corporation's organizers expect to earn an annual after-tax income of $24,000. If
Answer:
$20,000 and 55,000
Explanation:
$20,000(preferred stock holders) and 55,000 (common stockholders).
working:
annual payment to preferred stock holders = 1,000 shares * $200 * 10% =>$20,000.
(note these are non cumulative , deficient dividends paid in previous years will not carry forward to current year, like in case of cumulative preferred stock).
remaining amount is the dividends to common stock holders in 2016:
=>$75,000 total dividends paid -$20,000 paid to preferred stock holders.
=>$55,000.
Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2021: Cost Retail Merchandise inventory, January 1, 2021 $ 220,000 $ 283,000 Purchases 588,000 864,000 Freight-in 11,000 Net markups 23,000 Net markdowns 4,300 Net sales 830,000 Required: Determine the December 31, 2021, inventory by applying the conventional retail method using the information provided.
Answer:
$335,700; $234,990
Explanation:
Under cost:
Goods available for sale:
= Beginning inventory + Purchases + Freight in + Net mark ups - Net markdowns
= 220,000 + 588,000 + 11,000 + 0 - 0
= $819,000
Under Retail:
Goods available for sale:
= Beginning inventory + Purchases + Freight in + Net markups - Net markdowns
= 283,000 + 864,000 + 0 + 23,000 - 4,300
= $1,165,700
Cost to retail ratio = $819,000 ÷ (283,000 + 864,000 + 0 + 23,000)
= $819,000 ÷ $1,170,700
= 0.7
Estimated ending inventory at retail:
= Goods available for sale(Retail) - Net sales
= $1,165,700 - $830,000
= $335,700
Estimated ending inventory at cost:
= Estimated ending inventory at retail × Cost to retail ratio
= $335,700 × 0.7
= $234,990
To determine the December 31, 2021, inventory using the conventional retail method, calculate the cost of goods available for sale and the retail value of goods available for sale. Then, use the cost-to-retail ratio to determine the ending inventory.
Explanation:To determine the December 31, 2021, inventory using the conventional retail method, we need to calculate the cost-to-retail ratio. The cost-to-retail ratio is calculated by dividing the cost of goods available for sale by the retail value of goods available for sale. In this case, the cost of goods available for sale is the sum of the beginning inventory and purchases, and the retail value of goods available for sale is the sum of the beginning retail value and net markups. Once we have the cost-to-retail ratio, we can determine the ending inventory by multiplying it by the retail value of goods available for sale.
Step 1: Calculate the cost of goods available for sale:
$220,000 (beginning inventory) + $588,000 (purchases) = $808,000
Step 2: Calculate the retail value of goods available for sale:
$283,000 (beginning retail value) + $23,000 (net markups) = $306,000
Step 3: Calculate the cost-to-retail ratio:
$808,000 (cost of goods available for sale) / $306,000 (retail value of goods available for sale) = 2.6431 (rounded to four decimal places)
Step 4: Calculate the ending inventory:
$830,000 (net sales) * 2.6431 (cost-to-retail ratio) = $2,190,933 (rounded to the nearest dollar)
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Which type of real option allows the output and/or inputs in the production process to be altered, depending on how market conditions change during a project’s life? a. Flexibility option b. Timing option c. Abandonment option
Answer:
correction option is A i.e. Flexibility option
Explanation:
correction option is A i.e. Flexibility option
flexibility option make easier for corporation unit to decide on production or raw material on the basis of market condition.
Abandonment option - As the name indicate this option initiate when corporation suffered huge lost or when there is a conditioned of minimum cash flow due to any reason.
Answer:
B
Explanation:
Timing option makes it possible to alter inputs or outputs in production process.
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.Gross Pay through August Gross Pay for Septembera. $5,300 $2,600b. 19,000 2,900c. 113,000 8,800
Assuming situation a, prepare the employer's September 30 journal entries to record salary expense and its related payroll liabilities for this employee.
The employee's federal income taxes withheld by the employer are $70 for this pay period. (Round your answers to 2 decimal places.)
Answer:
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)= @141.2
Explanation:
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
September Earnings Subject to Tax
Federal income tax @$70
FICA—Social Security = 800 (@tax rate= 6.20%)= $49.6
FICA—Medicare :800(@tax rate=1.45%)= $11.6
Total taxes withheld : 141.2
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)= @141.2
In scenario A of BMX Company, the FICA Social Security tax for September is $161.2, FICA Medicare tax is $37.7, and federal income tax is $70, totaling liabilities of $269.9. Since the gross pay through August exceeded $7,000, there will be no FUTA and SUTA tax for September. The company's journal entry would record these amounts as salary expense and related payroll liabilities.
Explanation:To calculate the payroll liabilities, first, let's calculate the September contribution of each tax:
FICA Social Security tax is 6.2% of September's gross pay up to the $118,500 limit. In this case, it would be 6.2% of $2,600 which equals $161.20. FICA Medicare tax is 1.45% of September's gross pay. In this case, it would be 1.45% of $2,600 which equals $37.70.FUTA tax is 0.6% of gross pay up to the first $7,000. The gross pay from January through August has exceeded $7,000 so there will be no FUTA tax for September.SUTA tax is 2.9% of gross pay up to the first $7,000. Again, as the employee has already exceeded this limit, there will be no SUTA tax for September.
Adding these amounts to the federal tax withheld gives a total liabilities of $269.9 (70 + 161.2 + 37.7).
The journal entries as of September 30 will be:
Debit Salary Expense $2,600Credit Social Security Tax Payable $161.20Credit Medicare Tax Payable $37.70Credit Federal Income Tax Payable $70Credit Salaries Payable $2331.1 Learn more about Payroll Liabilities here:https://brainly.com/question/32139674
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Sisters Corp. expects to earn $6 per share next year. The firm’s ROE is 15% and its plowback ratio is 60%. The firm’s market capitalization rate is 10%. a. Calculate the price with the constant dividend growth model. (Do not round intermediate calculations.)
Answer:
Stock price = $240.
Explanation:
Here,
Plowback ratio is the ratio which estimates the amount of money a company retains after paying the dividend to the stockholders.
To calculate the stock price, the plowback ratio is the growth rate for the firm.
Here, Expected earn, D1 = $6; ROE = 15% = 0.15; Plowback Ratio = 60% = 0.60; Market capitalization rate, K = 10% = 0.10.
We know,
Stock price = [tex]D_{1} / (K - g)[/tex]
Stock price = [tex]\frac{D_{1} (1 - plowback ratio)}{Market capitalization rate - (ROE * plowback ratio)}[/tex]
Stock price = [tex]\frac{6 (1 - 0.60)}{0.10 - (0.15*0.60)}[/tex]
Stock price = $2.4/0.01 = $240
Using the Gordon Growth Model with the provided earnings, ROE, plowback ratio, and market capitalization rate, the calculated stock price for Sisters Corp. is $240 per share.
Explanation:The question pertains to calculating the price of a company's stock using the constant dividend growth model, a concept in finance.
Firstly, we determine the growth rate of dividends which can be calculated as the product of the return on equity (ROE) and the plowback ratio. In this instance, the growth rate is 15% (ROE) multiplied by 60% (plowback ratio), giving us 9%.
Since Sister Corp. expects to earn $6 per share next year, we can use the Gordon Growth Model. According to this model, the price of a stock is the dividend per share divided by the market capitalization rate minus the growth rate, which is:
P = D / (k - g)
Where P is the price, D is the dividend per share, k is the market capitalization rate, and g is the growth rate.
As the firm plows back 60%, it will pay out 40% (100% - 60%) as dividends. The dividends per share thus would be $6 * 40% = $2.4.
Substituting the values into the equation:
P = $2.4 / (0.10 - 0.09)
P = $240
The price of the stock would be $240 per share using the constant dividend growth model.
In the global arena, the use of corporate codes of conduct to address labor issues is a lot like the use of ____________________ to govern the workplace.A) labor lawsB) union contractsC) employee associationsD) human resource management
Answer: Option (D)
Explanation:
Human resource management is referred to as the terminology which is used in order to elaborate the strategic proposal to compelling management of the individual in an organization so as these individual assists the organization to gain an advantage. It is known to be constructed in order to maximize the individuals performance.