(Learning Objective 2: Distinguish among operating, financing, and investing activities indirect method) Crater HVAC Systems is preparing its statement of cash flows (indirect method) for the year ended March 31, 2018. To follow, in no particular order, is a list of items that will be used in preparing the company's statement of cash flows. Identify each item as an operating activity addition to net income; an operating activity subtraction from net income; an investing activity; a financing activity; or an activity that is not used to prepare the cash flows statement. a. Increase in inventory b. Issuance of common stock c. Decrease in accrued liabilities d. Net income h. Retained earnings i. Payment of dividends j. Increase in accounts payable k. Decrease in accounts receivable L Gain on sale of a building m. Loss on sale of land n. Depreciation expense Decrease in prepaid expense f. Collection of cash from customers g. Purchase of equipment with cash

Answer:

Firm A should accept the project beacause it has high required rate of return which means low risk involved.

Explanation:

Rate of return = risk free return + Beta ( market risk premium)

Firm A

rate of return = 0.045 + 1.2 (0.07)

= 0.045 + 0.084

= 12.9%

Firm B ;

 rate of return = 0.045 + 0.9(0.07)

= 0.045 + 0.063

= 10.8%

Answer:

a) Value of a perpetuity =$1,428.57

b) Present value of perpetuity due will include extra cash flow received at start: =$1,528.57

c) Present value = 1428.57/(1.07^2)=$1,247.77

Explanation:

a) Value of a perpetuity = Cash flow/rate=100/0.07=$1,428.57

b) Present value of perpetuity due will include extra cash flow received at start:

=Cash flow/rate+Cash flow=100+(100/0.07)=$1,528.57

c) This will be equal to PV of perpetuity at end of year 2=100/0.07=$1428.57 after 2 years

Present value = 1428.57/(1.07^2)=$1,247.77

Final answer:

The present value of receiving an annual payment of $100 starting in 2020 in perpetuity at a 7% discount rate is $1,428.57. If the first payment is immediate, the value is higher at $1,528.57. Receiving the first payment in 2022 has a present value today of $1,165.96.

Explanation:

To calculate the present value of a perpetuity (an infinite series of cash flows), we use the perpetuity formula: Present Value (PV) = Payment (PMT) / Discount Rate (r). For an investment that pays $100 each year in perpetuity, starting in 2020, and with a discount rate of 7%, the present value calculation would be:

PV = $100 / 0.07 = $1,428.57

This represents the sum a rational investor would be willing to pay for receiving $100 annually, starting a year from now, indefinitely.

In the case where the first $100 payment comes immediately on January 1, 2019, we add the immediate payment to the present value of the perpetuity:

PV = $100 + ($100 / 0.07) = $100 + $1,428.57 = $1,528.57

Finally, if the investment's first cash flow is to be received in 3 years (on January 1, 2022), we have to discount the perpetuity value back 3 years using the discount rate:

PV = ($100 / 0.07) / (1 + 0.07)^3 = $1,428.57 / 1.225043 = $1,165.96

So, today's value of receiving $100 each year, starting three years from now infinitely, is approximately $1,165.96.

Answer:

The correct answer is B that is physical barrier

Explanation:

Physical barrier is the kind of barrier which is comprise of the natural and environmental condition, act as a barrier or fence in communication while sending the message from the sender to receiver.

In this case, Joi wants to communicate to Jesus regarding a project, on which they will be working on. But still facing the problem while communication. So, it is a barrier which is physical.

Answer:

24.7215

Explanation:

Given;

Discount = 50%

Regular price, p = $8

cost of cake, c = $5

salvage value, s = 50% of $8 = $4

Mean = 20

Standard deviation, σ = 7

Now,

Underage cost, Cu = p - c

= $8 - $5

= $3

Overage cost, Co = c - s

= $5 - $4

= $1

P ≤ [tex]\frac{C_{u}}{(C_{u}+C_{o})}[/tex]

P ≤  [tex]\frac{3}{(3+1)}[/tex]

P ≤ 0.75

The Z value for the probability 0.75 is 0.6745

The optimal stocking level = Mean + ( z × σ )

= 20 + 0.6745 × 7

= 24.7215

Answer: It will take her 15 years to repay the loan and start making profit.

Explanation: Kindly see attached schedule.

From the schedule, you will see that it will take her 15 years to repay the loan and she will start making profit in the 16th year.

Answer:

1.37

Explanation:

Total Debts (D) = Current liabilities + Long-term debt + Other liabilities

Total Debts (D) = $210 + $205 + $120 = $535

Owner's Equity (E) = $390

The debt-equity ratio (DER) is given by:

[tex]DER = \frac{D}{E} =\frac{535}{390}\\DER=1.37[/tex]

Geomorph Trading’s debt-equity ratio is 1.37

Answer:

$218,050

Explanation:

Please see attachment.

The conventional retail inventory method calculates the ending inventory value by applying the markup or markdown percentages to the retail value of the goods. To compute the inventory using this method, we need to start with the beginning inventory at retail and cost, add the net purchases and net markups, and subtract the markdowns and markdown cancellations.

The conventional retail inventory method calculates the ending inventory value by applying the markup or markdown percentages to the retail value of the goods. To compute the inventory using this method, we need to start with the beginning inventory at retail and cost, add the net purchases and net markups, and subtract the markdowns and markdown cancellations.

In this case:

To find the ending inventory using the conventional retail inventory method, you would calculate:

Ending inventory at retail = Beginning inventory at retail + Purchases + Net markups - Net markdowns

Answer:

(a) inflation rate will be 0.0349

(B) Nominal interest will be 8.0349 %

Explanation:

We have given final price of the bicycle F=$19

Initial price of the bicycle P=$16

(a) Time is given t = 5 years

We know that [tex]F=P(1+i)^T[/tex], here i is inflation rate

[tex]19=16(1+i)^5[/tex]

[tex](1+i)^5=1.1875[/tex]

[tex](1+i)=1.0349[/tex]

[tex]i=0.0349[/tex]

So inflation rate will be 0.0349

(b) We have given real interest = 8 %

We know that nominal interest rate = real interest rate + inflation rate = 8+0.0349 = 8.0349 %

The annual rate of inflation over 5 years is equal to 3.5%.

Given the following data:

Future value = $19.00

Principal = $16.00.

Time = 5 years.

Real interest rate = 8% = 0.08.

In order to determine the annual rate of inflation over 5 years, we would use the compound interest formula:

[tex]A=P(1+r)^t[/tex]

Where:

Substituting the given parameters into the formula, we have;

[tex]19.00=16.00(1+r)^5\\\\\frac{19.00}{16.00} =(1+r)^5\\\\1.1875 =(1+r)^5\\\\\sqrt[5]{1.1875} =1+r\\\\1.0350=1+r\\\\r=1.0350-1\\\\[/tex]

r = 0.0350 = 3.5%.

Market interest rate = Real interest rate + Inflation rate

Market interest rate = 0.08 + 0.0350

Market interest rate = 0.115.

Market interest rate = 11.5%.

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Answer:

a) 28%

b) 56%

Explanation:

Data provided in the question:

Operating profit margin = 7%

Asset turnover ratio = 4

Now,

a) ROA = Profit margin × Asset turnover ratio

= 7% × 4

= 28%

b) Given:

Debt-equity ratio = 1

Interest payments = $8,200

Taxes = $8,200

EBIT = $21,000

Now,

Total assets = Net income ÷ ROA

Also,

Net income = EBIT - tax - interest

= $21,000 - $8,200 - $8,200

= $4,600

Thus,

Total assets = $4,600 ÷ 28%

= $16428.57

also,

Total assets = Debt + Equity

or

Total assets = Equity × ([tex]\frac{\textup{Debt}}{\textup{Equity}}+1[/tex] )

or

$16428.57 = Equity × ( 1 + 1 )

or

=> Equity = $8214.28

Therefore,

ROE = Net income ÷ Equity

= $4,600 ÷ $8214.28

= 56%

Answer:

C) $3,898.9 million

Explanation:

Please see attachment.

Answer:

$140,000

Explanation:

For computing the dividend to the common stockholders, first we have to find out the yearly dividend which is shown below:

= Number of shares × par value per share × dividend rate

= 25,000 shares × $10 × 8%

= $20,000

Dividend paid in 2011 would be

= 2009 dividend + 2010 dividend + 2011 dividend

= $20,000 + $20,000 + $20,000

= $60,000

Out of $2000,000, the $60,000 will be paid to preference stockholders and the remaining $140,000 will be paid to equity stockholders

Answer:

B. ticketing and marking

Explanation:

Floor ready is the term used to refer to the merchandise which is ready to sale and that the merchandise is detailed with every description required.

That means it is ready with the size, quality, and quantity that is required to be marked.

Along with that it is even priced more properly and is already tagged with the label of description and price.

This all labeling and ticketing is basically done in the retail store before it is offered to the customer.

Answer:

Variable Overhead Rate Variance  - $55 favorable

Variable Overhead Efficiency Variance  -  $275 favorable

Over applied efficiency variance - $330 favorable

Explanation:

The computations are shown below:

Variable Overhead Rate Variance = Actual Hours × (Actual Rate - Standard variable overhead Rate)

= 1,100 hours × ($2.70 - 2.75)

= $55 favorable

Variable Overhead Efficiency Variance = Standard variable overhead Rate × (Actual Hours - Standard Hours)

= $2.75 × (1,100 hours  - 1 × 1,200)

= $275 favorable

So, the over-applied variable overhead would be

= $55 favorable + $275 favorable

= $330 favorable

Answer:

The correct answer is:  set to allocate profit to the low tax rate country.

Explanation:

Transfer pricing is the amount the one division of a company charges another for goods or services provided. Those divisions could be subsidiaries or affiliates of the same organization. To obtain the highest level of profit possible, firms tend to establish their divisions in low tax rate countries so they transfer price is the lowest available.

Answer:

Please see attachment .

Explanation:

Please see attachment .

Answer:

The statement is true and correct

Explanation:

It is one of the desired project manager behaviors which is called as the Integrity, this terms demonstrates that the project manager should involve the ways, which are protecting people, showing respect, leading the major change, display total commitment towards the project as well as towards people, creating a culture of honesty, defending the core values and the making or taking the hones decisions.

So, the statement states the integrity which should be in a person.

Answer:

bonds payable     134,000 debit

loss on redemption 17,018 debit

cash                                             138,020 credit

discount on bonds payabke        12,998 credit

Explanation:

redemption disbursement:

face value x redemption quote

134,000  x  103/100 = 138,020

carrying value:            121,002

loss at redemption        17,018

We are using 138,020 cash(asset) to pay a liability for 121,002

discount/premium on the bonds:

face value         134,000

carrying value   121,002

discount:             12,998

In the journal entry we must write-off the bond payable and the discount. Then, declare the loss at redemption and the cash used.

Novak Corp made a loss of $17,018 in the early redemption of the bonds due to paying out more than the carrying value. This example illustrates how bond redemption works in financial accounting, where the principles of present value and interest rate effect are significant in bond pricing calculations.

Novak Corp. redeemed its bonds that had a face value of $134,000 at an early redemption price of 103% of the face value. This would mean that Novak paid out $138,020 (134,000 x 1.03) to redeem the bonds. However, the carrying value of the bonds at the redemption date was $121,002. Subtracting the carrying value from the redemption value, Novak incurs a loss of $17,018 due to the early redemption ($138,020-$121,002). This is an application of bond redemption, a concept in financial accounting.

Similar to the explanation in a bond value calculation, where a $3,000 bond, issued at 8% would essentially have the same value to both the borrower and lender, Novak Corp's bond redemption underscores the principles of present value and interest rate effect in bond pricing calculations.

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Answer:

(A) $81

Explanation:

Sales mix: 30% QD and 70% QD+.

QD Variable costs per unit = $120

QD selling price = $180

QD+ Variable costs per unit = $135

QD+ selling price = $225

The unit contribution for the Q-Drive is:

[tex]U_{QD} = 180-120 = \$ 60[/tex]

The unit contribution for the Q-Drive+ is:

[tex]U_{QD+} = 225-130 = \$ 90[/tex]

The weighted-average unit contribution margin for Marigold is

[tex]UC= (0.3*U_{QD})+(0.7*U_{QD+})\\UC= (0.3*60)+(0.7*90)\\UC =\$ 81[/tex]

The answer is (A) $81.

Answer:

C. the risk that your new product will not receive regulatory approval

Explanation:

First, let me try to clarify the difference between systematic and unsystematic risk.

Systematic risk is one that is inherent or prevalent and affects the entire market. A risk that is embedded in the economic system. Once changes occur in factors that are woven into the fabric of an economy, it affects the entire economy, there is no way to avoid or predict their outcome or effect. They are risks that cannot be mitigated through diversification.

Unsystematic risks on the other hand are those that affect or are influenced by specific factors in an industry. They can be referred to industry specific risks.

From the question, the only industry specific risk is that of the new product not receiving regulatory approval which can be mitigated by ensuring that the new product meets the required benchmark, and thus, mitigated or prevented.

However, the other risks such as oil price rises, economic slow down, and rising interest rates are systemic risks.

Please feel free to ask more questions.

Answer:

Since the p>0.05,we do not reject H0 .There is insufficient evidence to conclude that there is a difference in the average donation given in Presbyterian vs Catholic church on Sundays.

Explanation:

Since the p>0.05,we do not reject H0 .There is insufficient evidence to conclude that there is a difference in the average donation given in Presbyterian vs Catholic church on Sundays.

Please see calculation attached .

Answer:

This question lacks answers, here they are:

a. Go with his gut feeling

b. Accept that Amy knows more about the topic than he does

c. Keep looking for more evidence

d. Dismiss Amy's argument because she is trying to sell something

The answer is  c.

Explanation:

In this kind of argument-fueled debate, it is essential to constantly have arguments up to your sleeve.

In this example, Amy has a robust base for her point of view (the literature). Since Noah acknowledged that, he has to provide his own argument basis (evidence). Otherwise, stating his point of view without it cannot be taken seriously in this kind of conversation.

With every side delivering a new amount of arguments, the other side should have appropriate arguments to defend a particular point of view, as it both feeds the debate and protects one's image at industry events like conventions, meetups...

The outcome of the argument-intensive debate is always a strong opinion, reflecting the pluses and minuses of the topic at hand.

Final answer:

The net realizable value of Accounts Receivable is $29,700 both before and after a $2,300 account receivable is written off using the allowance method, as the write-off reduces both the Accounts Receivable and the Allowance for Bad Debts balances, leaving the net value unchanged.

Explanation:

The question involves calculating the net realizable value of Accounts Receivable both before and after writing off a bad debt when using the allowance method. Initially, the Accounts Receivable has a balance of $33,000, and the Allowance for Bad Debts has a credit balance of $3,300. To find the net realizable value, you subtract the allowance from the total Accounts Receivable.

Initially, the net realizable value is:

$33,000 (Accounts Receivable) - $3,300 (Allowance for Bad Debts) = $29,700 (Net Realizable Value before write-off).

After writing off a $2,300 account receivable, the Accounts Receivable balance decreases by that amount, but the Allowance for Bad Debts also reduces to absorb the write-off, leaving the net realizable value unchanged:

$33,000 (Accounts Receivable) - $2,300 (write-off) = $30,700 (New Accounts Receivable Balance)

$3,300 (Allowance for Bad Debts) - $2,300 (write-off) = $1,000 (New Allowance for Bad Debts Balance)

$30,700 (New Accounts Receivable Balance) - $1,000 (New Allowance for Bad Debts Balance) = $29,700 (Net Realizable Value after write-off)

Therefore, the net realizable value of Accounts Receivable remains $29,700 before and after the $2,300 account receivable is written off.

Before: $29,700. After writing off $2,300: $27,400.

To find the net realizable value (NRV) of accounts receivable before and after a $2,300 account receivable is written off, we'll use the allowance method.

Given:

- Accounts Receivable balance: $33,000

- Allowance for Bad Debts credit balance: $3,300

- Amount to be written off: $2,300

Before Writing Off the Account:

1. Calculate the Net Realizable Value (NRV) before writing off the account:

[tex]\[ \text{NRV before} = \text{Accounts Receivable} - \text{Allowance for Bad Debts} \][/tex]

[tex]\[ \text{NRV before} = \$33,000 - \$3,300 = \$29,700 \][/tex]

After Writing Off the Account:

1. Write off the account from both accounts receivable and allowance for bad debts:

  - Deduct $2,300 from both Accounts Receivable and Allowance for Bad Debts.

2. Calculate the Net Realizable Value (NRV) after writing off the account:

[tex]\[ \text{NRV after} = (\text{Accounts Receivable} - \text{Write-off}) - \text{Allowance for Bad Debts} \][/tex]

[tex]\[ \text{NRV after} = (\$33,000 - \$2,300) - \$3,300 \][/tex]

[tex]\[ \text{NRV after} = \$30,700 - \$3,300 \][/tex]

[tex]\[ \text{NRV after} = \$27,400 \][/tex]

Summary:

- Before Writing Off the Account:

 - Net Realizable Value (NRV) = $29,700

- After Writing Off the Account:

 - Net Realizable Value (NRV) = $27,400

Answer:

The net realizable value (NRV) of accounts receivable:

- Before writing off the account: $29,700

- After writing off the account: $27,400

Answer: Option A is the right answer

Explanation:  Evidences in most cases has shown that MACRS  is all about applying convention for one and a half year on assets. So when an entities owns 35-40% of an asset in forth quarter, Mid quarter convention will  be applied for only one half of the last quarter, logically one and half month in the last quarter.

Answer:

$77,960

Explanation:

The computation of the cash and cash equivalent balance is shown below:

= Balance in checking accounts + balance in saving accounts + Undeposited customer checks +  Currency and coins on hand + U.S. Treasury bills; 2-month maturity

= $15,300 + $23,900 + $7,000 + $760 + $33,000

= $77,960

The remaining items values are not considered in the cash and cash equivalents

Hence, All other information which is given is not relevant. Hence, ignored it

Answer:

a. $10 per share

b. 16 million shares

c. $250 million

d. 64%

Explanation:

The computations are shown below:

a. The expected market price of the common stock is same as given in the question i.e $10 per share

b. The buy back shares would be

= New debt value ÷ market price per share

= $160 million ÷ $10

= 16 million shares

c. The market value of the firm would be

= (Outstanding shares - buy back shares) × market price per share + debt value

= (25 million shares - 16 million shares) × $10 + $160 million

= $90 million + $1260 million

= $250 million

d.  The debt ratio would be

= Debt value ÷ market value of the firm

= $160 million ÷ 250 million

= 64%

Answer:

$98,400

Explanation:

A trial balance shows the balances of all the accounts of an entity at the end of a period. It is basically grouped into debits and credit balances with the debits being the asset and expense while the credit balances are common stock, Income and liabilities. The trial balance of Broadway, Inc.âs is as shown below

Accounts Balances   Debit         Credit  

Cash                           45,000.00  

Equipment                   10,800.00  

Land                           42,600.00  

Accounts Payable                27,600.00  

Notes Payable                         49,000.00  

Common Stock                        21,800.00  

Therefore, total credits

= 27600 + 49000 + 21800

= $98,400

The equivalent annual cost (EAC) for Machine A is -$191,929.34 and for Machine B is -$162,787.02. Hence, Machine B is more cost-effective despite its higher initial cost due to having a lower EAC.

To calculate the equivalent annual cost (EAC) of each machine, we need to first calculate their respective net present values (NPV) and then spread this cost over the life of the machine.

For Machine A, the depreciation per year is $3,130,000 / 6 = $521,666.67. After-tax operating profit each year would be: ($11,600,000 - $4,060,000 (variable cost) - $270,000 (fixed cost) - $521,666.67 (depreciation)) * (1 - 0.21) = $4,809,083.33. The tax shield provided by the depreciation would be $521,666.67 * 0.21 = $109,550. Now, we find the NPV of these cash flows for 6 years, minus the initial cost of the machine. Using an 8% discount rate, this comes out to -$879,016.04. Spreading this over 6 years gives an EAC of -879,016.04 / (1 - (1 + 0.08)^-6) / 0.08) = -$191,929.34.

Since the calculations for the NPV and EAC of Machine B follow the same steps, we only replace the respective values. The EAC of Machine B comes out to be -$162,787.02. Therefore, despite the higher initial cost, Machine B is the more cost-effective choice because it has a lower equivalent annual cost.

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Answer:

The answer is letter B

Explanation:

Request, rationale, call to action, goodwill. Because this message is considered a request. She is gathering information for herself with the dealership managers. If she could come up with a rationale call to action, she would succeed in gathering reliable informations from the dealership managers.

the correct answer is option b. Anne's message likely includes a request, rationale, call to action, and goodwill. This is the best way to gather the needed customer profile data. A clear and polite message will facilitate successful data collection.

Anne wants to gather information to understand the customer profile of those who finance their car purchases through dealerships. Therefore, she is likely to structure her message with request, rationale, call to action, and goodwill. Here’s why:

For example, Anne might say, "Please ask these three questions to customers financing their car purchases: 1) Have you financed a car before? 2) What factors made you choose financing this time? 3) How satisfied are you with the financing terms? Gathering this information will help us better tailor our services to our customers' needs. Thank you for your assistance and cooperation."

Answer:

(i) $328 Unfavorable

(ii) $2,268 Favorable

(iii) $2,592 Unfavorable

Explanation:

Total budgeted hours for actual output (SH):

= Actual units × Budgeted hours per suite

= 1,080 suits × 4 hours

= 4,320 hours

Actual variable overhead rate (AR) = Actual cost ÷ Actual hours

                                                          = $52,164 ÷ 4,536

                                                          = $11.5 per hour

Variable overhead spending variance:

= (Standard rate - Actual rate) × Actual hours

= ($12 - $11.5) × 4,536

= $2,268 Favorable

Variable overhead efficiency variance:

= (Standard hours - Actual hours) × Standard rate

= (4,320 - 4,536) × $12

= $2,592 Unfavorable

Flexible- budget variance:

= variable overhead spending variance + Variable overhead efficiency variance

= $2,268 Favorable + $2,592 Unfavorable

= $328 Unfavorable

a. The flexible- budget variance is $324 Unfavorable.

b. The  spending variance is $2,268 Favorable.

c. The efficiency variance for variable manufacturing overhead is $2,592 Unfavorable.

Spending variance:

Total budgeted hours for actual output (SH)= Actual units × Budgeted hours per suite

Total budgeted hours for actual output (SH)= 1,080 suits × 4 hours

Total budgeted hours for actual output (SH)= 4,320 hours

Actual variable overhead rate (AR) = Actual cost ÷ Actual hour

Actual variable overhead rate (AR)= $52,164 ÷ 4,536

Actual variable overhead rate (AR)= $11.5 per hour

Variable overhead spending variance= (Standard rate - Actual rate) × Actual hours

Variable overhead spending variance= ($12 - $11.5) × 4,536

Variable overhead spending variance=$2,268 Favorable

Efficiency variance:

Variable overhead efficiency variance= (Standard hours - Actual hours) × Standard rate

Variable overhead efficiency variance= (4,320 - 4,536) × $12

Variable overhead efficiency variance= $2,592 Unfavorable

Flexible- budget variance:

Flexible- budget variance= variable overhead spending variance + Variable overhead efficiency variance

Flexible- budget variance= $2,268 Favorable + $2,592 Unfavorable

Flexible- budget variance= $324 Unfavorable

Inconclusion the flexible- budget variance is $324 Unfavorable.

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