Answer
The answer and procedures of the exercise are attached in a the following 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.
The costs that should be expensed or capitalized are indicated as follows:
1. The cost of training employees so that they can use new equipment should be expensed.
2. The cost of purchasing new equipment should be capitalized as Equipment.
3. The early payment discount received for the purchase of new equipment should be capitalized (reducing the cost of Equipment).
4. The real estate commissions incurred on land purchased for a new plant should be capitalized as Land.
5. Property taxes on Land incurred after the land purchase should be expensed, not capitalized.
6. The costs of tune-up for the truck used to deliver new equipment should be expensed because it was not wholly incurred for the new equipment.
7. The costs to lay the foundation for a new building should be capitalized as Building.
8. The insurance expense on a new building during the construction phase should be capitalized as Building.
Thus, the costs that should be expensed do not add to the costs of the plant assets.
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he following information relates to a company’s defined benefit pension plan at December 31:
Accumulated benefit obligation: $1,035,000
Projected benefit obligation: 1,250,000
Prior service cost: 113,000
Net gain on plan assets: 167,000
Plan assets (fair value): 737,000
What amount should the company report as its pension liability at December 31?
Final answer:
The company should report a pension liability of $513,000 at December 31, calculated by subtracting the fair value of the plan assets ($737,000) from the Projected Benefit Obligation ($1,250,000).
Explanation:
To calculate the company's pension liability at December 31, we need to look at the Projected Benefit Obligation (PBO) and the fair value of the plan assets. The company's PBO is $1,250,000 and the plan assets are valued at $737,000. The pension liability is simply the PBO minus the fair value of plan assets. Therefore, the pension liability equals $1,250,000 - $737,000 = $513,000.
This means the company should report a pension liability of $513,000 at December 31. This is the amount by which the obligations exceed the plan's assets. Note that neither the accumulated benefit obligation, prior service cost, nor the net gain on plan assets affect the calculation of the pension liability.
To carefully integrate and coordinate the company's many communications channels and produce greater sales impact, some companies appoint a(n) ________.
A) idea champion
B) marketing communications director
C) sales representative
D) business analyst
E) media planner
Answer: E - Media Planner
Explanation: Media Planners are tasked with the objective of maximising returns on advertisement and company's promotional activities for an improved sales.
Media planners are responsible for creatively thinking of different marketing strategies to get to their target customers.
They make use of different marketing communications such as radio, television, hand bills, online articles, billboards etc to communicate with their target customers.
An epidemiologic experiment is performed in which one group is exposed to a suspected factor and the other is not. All individuals with an odd hospital admission number are assigned to the second group. The main purpose of this procedure is to:a. ensure a double-blind study.b. prevent observer bias with respect to the factor.c. prevent observer bias with respect to the outcome.d. improve the likelihood that the two groups will be comparable with regard to known and unknown confounding factors.e. guarantee comparability of the two groups with regard to other relevant factors.
Answer:
d. improve the likelihood that the two groups will be comparable with regard to known and unknown confounding factors.
Explanation:
Epidemiology is the term that is used to define a study in which the study is done on a defined population for the health related issues, that is about answering the who, when and where related to this study.
In this given question also the experiment focuses on developing two different groups to understand and conduct the study and analysis properly, based on the suspected factor and how they react to it.
Thus, it will lead to compare the groups in order to make the analysis efficient keeping constant factors.
Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $128,000. The fair market value of the interest is $140,000. In a proportinate nonliquidating distribution, the LLC distributes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?
Answer:
Please see attachment
Explanation:
Please see attachment
Sunland Company had these transactions during the current period. June 12 Issued 84,000 shares of $1 par value common stock for cash of $315,000. July 11 Issued 4,000 shares of $105 par value preferred stock for cash at $113 per share. Nov. 28 Purchased 3,100 shares of treasury stock for $7,700.
Prepare the journal entries.
Answer:
Please see attachment
Explanation:
Please see attachment
After researching Valero Energy common stock, Sandra Pearson is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 500 shares of Valero Energy. At the time of the sale, a share of common stock had a value of $73. Three months later, Valero Energy is selling for $20 a share, and Sandra instructs her broker to cover her short transaction. Total commissions to buy and sell the stock were $65. What is her profit for this short transaction?
Answer:
$26,435
Explanation:
Given that,
Short shares sold = 500
Share of common stock had a value = $73
Three months later, Valero Energy is selling = $20 a share
Profit for this short transaction:
= Sales - Purchase - Brokerage
= (500 shares × $73) - (500 shares × $20) - $65
= $36,500 - $10,000 - $65
= $26,435
Therefore, her profit for this short transaction is $26,435.
Kincaid Company's Retained Earnings balance on January 1 was $9,000. During the current year, Kincaid earned $3,100 in revenues and incurred $4,300 in expenses. Kincaid declared and paid $3,000 in dividends, all in cash. After the closing entries are made, Kincaid's Retained Earnings balance on December 31 will be:
A) $7,800.
B) $9,100.
C) $9,000.
D) $4,800.
Answer:
D) $4,800
Explanation:
Previous Retained Earnings + Revenue - Expenses - Dividends = Current Retained Earnings
Old Retained Earnings - $9,000
Revenue - $3,100
Expenses - ($4,300)
Dividends - ($3,000)
Current Retained Earnings = $4,800
Final answer:
Kincaid's Retained Earnings balance on December 31 will be $4,800 after accounting for the year's net loss and dividends paid.
Explanation:
After the closing entries are made, Kincaid's Retained Earnings balance on December 31 will be calculated based on the beginning balance, plus net income, and minus dividends paid. We start with the beginning balance of retained earnings on January 1, which was $9,000. During the year, Kincaid earned revenues of $3,100 and incurred expenses of $4,300, leaving us with a net loss of $1,200 ($3,100 - $4,300). This net loss will decrease retained earnings. Moreover, Kincaid declared and paid $3,000 in dividends, which will further decrease retained earnings.
To find the ending Retained Earnings balance, we subtract both the net loss and dividends from the beginning balance:
Beginning Retained Earnings: $9,000
Net Loss: -$1,200
Dividends Paid: -$3,000
Ending Retained Earnings: $9,000 - $1,200 - $3,000 = $4,800
Therefore, the answer is D) $4,800.
Roger inherited 100 shares of Periwinkle stock when his mother, Emily, died. Emily had acquired the stock for a total of $60,000 on November 15, 2015. She died on August 10, 2019, and the shares were worth a total of $55,000 at that time. Roger sold the shares for $36,000 on December 22, 2019. How much gain or loss does Roger recognize? What is the nature of that gain or loss?
Answer:
Please see attachment
Explanation:
Please see attachment
Calculating Economic Value Added East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $630,000 Cost of goods sold 380,000 Gross margin $250,000 Selling and administrative expense 174,400 Operating income $ 75,600 Less: Income taxes (@ 40%) 30,240 Net income $ 45,360 Total capital employed equaled $381,000. East Mullett's actual cost of capital is 8 percent. Required: Calculate the EVA for East Mullett Manufacturing. $
Answer:
$14,880
Explanation:
The formula to compute EVA is shown below:
= Net operating income or earnings after taxes - (Total capital employed × cost)
= $45,360 - ($381,000 × 8%)
= $45,360 - $30,480
= $14,880
We simply applied the economic value added formula so that the accurate value can come.
All other information which is given is not relevant. Hence, ignored it
The Wall Street Journal reports that the rate on three-year Treasury securities is 4.75 percent and the rate on four-year Treasury securities is 5.00 percent. The one-year interest rate expected in three years is E(4r1), 5.25 percent. According to the liquidity premium theory, what is the liquidity premium on the four-year Treasury security, L4?
0.0375 percent0.504 percent5.01 percent5.04 percent
Answer:
L4= 0.504%
Explanation:
1 +1R4= {(1 +1R3)(1 + E(4r1) +L4)}1/4
1.0500 = {(1.0475)^3(1 + 0.0525 +L4)}1/4
(1.0500)^4= (1.0475)3^(1 + 0.0525 +L4)
(1.0500)^4/(1.0475)^3= 1 + 0.0525 + L4
(1.0500)4/(1.0475)^3-1.0525
L4= .0050358564 = 0.504%
Lindsey exchanges investment real estate parcels with Donna. Her adjusted basis in the property is $400,000, and it is encumbered by a mortgage liability of $200,000. Donna assumes the mortgage. Donna's property is appraised at $1,000,000 and is subject to a $100,000 liability. Lindsey assumes the liability. If no cash is exchanged, what is the amount of gain recognized by Lindsey?
Answer:
$500,000
Explanation:
For Lindsey, the cost incurred in the acquisition of Donna's property via the exchange is
= $400,000 + $200,000
= $600,000
For Donna, the cost incurred in the acquisition of Lindsey's property via the exchange is
= $1,000,000 + $100,000
= $1,100,000
If no cash is exchanged, amount of gain recognized by Lindsey
= $1,100,000 - $600,000
= $500,000
_________ policy involves the decision to pay out earnings to shareholders or to retain and reinvest them in the firm. When distributing income to stockholders there are three key issues to consider: (1) How much should be distributed? (2) Should the distribution be in the form of dividends, or should the cash be passed on to shareholders by _________ stock?
(3) How stable should the distribution be? When deciding how much cash to distribute, a firm's managers must remember that the firm's objective is to_______ shareholder value. The target_______ ratio is defined as the percentage of net income distributed as cash dividends, and it should be based on investors' preferences for dividends versus capital gains. Any change in this ratio will have two opposing effects: (1) If dividends are increased, then taken alone this will cause the firm's stock price to_______ . (2) However, an increase in dividends will also cause the firm's expected growth rate to_______ and this will tend to _______the firm's stock price. The _______dividend policy is the one that strikes a balance between current dividends and future growth _______and the firm's stock price.
Answer:
The blanks anwers are below
Explanation:
Kindly consider blanks in order:
Payout policy
Repurchasing
Maximize
Payout
Rise/Increase
Decline
Decrease
Sustainaible
maximizes
Some blanks may not match. The answers are correct although.
You purchased 1,000 shares of the New Fund at a price of $23 per share at the beginning of the year. You paid a front-end load of 2.5%. The securities in which the fund invests increase in value by 9% during the year. The fund's expense ratio is 1.3%.
What is your rate of return on the fund if you sell your shares at the end of the year?
Answer:
5%
Explanation:
Front-end load = 2.5%
The cost of 1,000 shares:
= (1,000 × $23) ÷ (1 - 0.025)
= $23,590
NAV at the end of the year = NAV in the beginning × (1 + r - expense ratio)
= $23 × (1 + 0.09 - 0.013)
= $23 × 1.077
= $24.771
Value of 1,000 shares at the end of the year:
= NAV at the end of the year × 1,000 shares
= $24.771 × 1,000
= $24,771
Rate of return:
= (Value of shares at the end ÷ Value of shares in the beginning) - 1
= ($24,771 ÷ $23,590) - 1
= 0.05006 or 5%
A security analyst is reviewing output from a CVE-based vulnerability scanner. Before
conducting the scan, the analyst was careful to select only Windows-based servers in a specific
datacenter. The scan revealed that the datacenter includes 27 machines running Windows 2003
Server Edition (Win2003SE). In 2015, there were 36 new vulnerabilities discovered in the Win2003SE
environment. Which of the following statements are MOST likely applicable? (Choose two.)
A. Remediation is likely to require some form of compensating control.
B. Microsoft's published schedule for updates and patches for Win2003SE have continued
uninterrupted.
C. Third-party vendors have addressed all of the necessary updates and patches required by
Win2003SE.
D. The resulting report on the vulnerability scan should include some reference that the scan of the
datacenter included 27 Win2003SE machines that should be scheduled for replacement and
deactivation.
E. Remediation of all Win2003SE machines requires changes to configuration settings and
compensating controls to be made through Microsoft Security Center's Win2003SE Advanced
Configuration Toolkit.
Please explain for thumbs up.
Answer:
The answers are Letters D and E.
Explanation:
The resulting report on the vulnerability scan should include some reference that the scan of the datacenter included 27 Win2003SE machines that should be scheduled for replacement and deactivation.
Remediation of all Win2003SE machines requires changes to configuration settings and compensating controls to be made through Microsoft Security Center's Win2003SE Advanced Configuration Toolkit.
Assume that you are a common stockholder of Inside Incorporated. If the company needed additional capital, and maintaining your current level of voting control was important, would you prefer to have it issue additional common stock or additional preferred stock
Answer:
Additional Preferred Stock
Explanation:
Preferred Stock always provides a preferential right in terms of distribution of earnings. But in no manner it increases the common equity, or the number of participants in common equity.
Also, there is no voting right attached with the preference shares of a company.
As when new equity will be issued the number of shareholders will increase and also the share percentage held currently will fall.
Accordingly the voting right and voting control will fall.
As investor do not desire the above, the preference share capital shall be issued so that there is no decline in voting share or control of the investor.
As a common stockholder maintaining voting control, you would prefer additional preferred stock issuance as it generally doesn't offer voting rights, hence, your voting control isn't diluted. On the contrary, issuing additional common stock reduces a shareholder's voting control.
Explanation:As a common stockholder, if you want to maintain your current level of voting control in Inside Incorporated, you would prefer the company to issue additional preferred stock and not common stock.
When additional common stock is issued, your percentage share of the voting rights in the company would decrease. Issuing common stock dilutes the existing shares, thereby reducing a shareholder's voting control. However, when Inside Incorporated issues additional preferred stock, it does not dilute your voting control since preferred stockholders usually have no voting rights.
Preferred stockholders have a higher claim on dividends and assets in case of liquidation than common stockholders, but do not participate in the voting process of the company. This means as a common stockholder, your voting rights and control over the company would remain intact even with the issuance of additional preferred stock.
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Kong Inc. reported net income of $298,000 during 2018 and paid dividends of $26,000 on common stock. It also has 10,000 shares of 6%, $100 par value cumulative preferred stock outstanding. Common stockholders' equity was $1,200,000 on January 1, 2018, and $1,600,000 on December 31, 2018. The company's return on common stockholders' equity for 2018 is: A. 17.4% B. 17.0% C. 15.1% D. 21.3%
Answer:
B. 17.0%
Explanation:
The computation of the return on common stockholders' equity is shown below:
= (Net income - preference dividend) ÷ (Average Common stockholders' equity)
where,
Net income is $298,000
Preference dividend = 10,000 shares × $100 × 6% = $60,000
And, the Average Common stockholders' equity would be
= (Opening Common stockholders' equity + Ending Common stockholders' equity) ÷ 2
= ($1,200,000 + $1,600,000) ÷ 2
= $1,400,000
Now put these values to the above formula
So, the value would equal to
= ($298,000 - $60,000) ÷ ($1,400,000)
= 17%
Recently, some executives for highway construction companies agreed to stop competing with each other on price and to meet every three months to decide their price for the next quarter.
In this situation:
A. the Sherman Act has been violated.
B. the Robinson-Patman Act has been violated by price discrimination.
C. the executives are exercising their right to free trade.
D. the unfair trade practice acts have been violated.
E. as long as prices don't increase—the executives have done nothing wrong.
Selected data taken from a recent year’s financial statements of trading card company Topps Company, Inc. are as follows (in millions). Net sales $326.7 Current liabilities, beginning of year 41.1 Current liabilities, end of year 62.4 Net cash provided by operating activities 10.4 Total liabilities, beginning of year 65.2 Total liabilities, end of year 73.2 Capital expenditures 3.7 Cash dividends 6.2 Compute the free cash flow
Answer:
$0.5 million
Explanation:
Given: Net sales= $326.7 million
Current liabilities, beginning of year $41.1 million
Current liabilities, end of year $62.4 million
Net cash provided by operating activities $10.4 million
Total liabilities, beginning of year $65.2 million
Total liabilities, end of year $73.2 million
Capital expenditures $3.7 million
Cash dividends $6.2 million
Now, compute free cash flow.
Formula: Free cash flow= [tex](\textrm{ Net cash provided by operating activities - capital expenditure - cash dividend})[/tex]
Free cash flow= [tex](10.4 - 3.7 - 6.2) = 10.4 - 9.9[/tex]
∴ Free cash flow= $0.5 million
Free cash flow of firm is useful to know the profitability of company excluding all non cash expense from firm´s income statement.
Oaktree Company purchased new equipment and made the following expenditures:
Purchase price $ 64,000
Sales tax 4,100
Freight charges for shipment of equipment 890
Insurance on the equipment for the first year 1,090
Installation of equipment 2,900
The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash.
Required:
Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1) Record the purchase of equipment
2) Record any expenditures not capitalized in the purchase of equipment
Answer:
The Journal entries are as follows:
(1)
Equipment A/c Dr. $71,890
To cash $3,790
To accounts payable $68,100
(To record the purchase of equipment)
Workings:
Equipment value:
= Purchase price + Sales tax + Freight charges for shipment of equipment + Installation of equipment
= 64,000 +4,100 + 890 + 2,900
= $71,890
Cash Paid:
= Freight charges for shipment of equipment + Installation of equipment
= 890 + 2,900
= $3,790
Accounts payable = Purchase price + Sales tax
= 64,000 +4,100
= $68,100
(2)
Prepaid Insurance A/c Dr. $1,090
To cash A/c $1,090
(To record any expenditures not capitalized in the purchase of equipment)
The company first records the purchase of the equipment by debiting Equipment Account $68,090 and crediting Accounts Payable same amount. Other expenditures such as freight, insurance, and installation costs are separately recorded by debiting their respective expense accounts and crediting Cash account.
Explanation:The necessary journal entries for Oaktree Company to record the expenditures for the purchase and associated costs of equipment are as follows:
Equipment Purchase: Debit Equipment Account $68,090 (which includes both the $64,000 purchase price and $4,100 sales tax). Credit Accounts Payable $68,090. Other expenditures: Debit Freight Charges $890, Debit Equipment Insurance $1,090, Debit Installation Costs $2,900. Credit Cash Account $4,880. These are not capitalized as part of the equipment as they are separate cost incurred due to the equipment purchase but are not part of the machinery's intrinsic value. Learn more about Equipment Purchase Accounting here:
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Accounting Fundamentals of Healthcare ManagementWorking capital techniques focus specifically on what aspects of an organization’s finances?What specific task does a manager undertake when handling working capital issues?What are the three primary reasons an organization holds cash or cash equivalents?What is the accounts receivable cycle? Why is this task especially important for health care organizations?What is the goal of the EOQ? How does it differ from JIT inventory?What are the steps in managing the revenue cycle?Should an organization take a discount of 1.5/10 N/ 30 on a $9,000 invoice or simply pay the bill when due?
Answer:
Check the following calculations
Explanation:
1. Working capital techniques focuses on short term borrowings of an organisation. An organisations meet its working capital needs by borrowing the funds for short term and meet the funds it requires to manage the operational requirements. This is the reason why short term borrowing limits of any organisation is linked directly to the value of its working capital ie., Inventories, receivables etc.,
2. A manager typically focusses on reducing the receivables by improving the collections from overdue debtors and on evaluating whether the inventories are procured optimally or purchased in bulk more than the requirement and negotiates with vendors for increased credit terms. He also works on ensuring that the short term borrowings are represented by the drawing power available from its current assets. If there is any gap, he would work on borrowing long term funds and utilise it to meet the shortfall in working capital with necessary approvals.
3.Accounts receivable cycle represents the no of days between the date of invoicing to a customer to the date of realisation of billed amount from the customer. In health care industry, most of the revenues are settled through insurance claim process. Insurance companies typically delay the settlement stating deficiencies in the documents submitted. This would result in increased ageing of receivables. Unless closely monitored and followed up, the realisation of dues would be a concern in this industry.
4. Goal of Economic Order Quantity (EOQ) is to minimise the inventory holding costs and the costs of ordering a product by optimally assessing the quantity to order .Here , the key assumption is the demand quantity would be certain and constant throughout the period. Just in Time (JIT) inventory is a manufacturing system which focuses to produce or procure products only when the demand arise. Hence, the focus is mainly on time reduction between the time of order and time of sourcing the material. JIT doesnt assume any static demand.
5. Revenue cycle in a Health care industry represents the difference between the date of admission of a patient and the date of receipt of fees . Steps involved in managing revenue cycle in a health care industry are provided below:
- Developing a robust system to track and monitor the revenue cycle for each patient
- Agreeing on a clear SOP (Standard operating procedure) with Insurance companies in submission and settlement of claims
- Review of revenue cycle by Top management team and raising relevant queries and actionable points to improve the status
Decision on offering cash discount.
It is prudent to collect after 30 days instead of giving cash discount as shown below
Use this information for Chicks Corporation to answer the question that follow. Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $302,500, and a desired minimum return of 15%. The profit margin for Chicks is
a. 15%
b. 25%
c. 27.5%
d. 22%
Answer:
Option B.
Explanation:
Given information:
Assets = $1,100,000
Sales = $1,210,000
Income or profit = $302,500
Formula for profit margin is
[tex]\text{Profit margin}=\dfrac{Profit}{Sales}\times 100[/tex]
Substitute the given values in the above formula.
[tex]\text{Profit margin}=\dfrac{302500}{1210000}\times 100[/tex]
On simplification we get
[tex]\text{Profit margin}=25\%[/tex]
The profit margin for Chicks is 25%.
Therefore, the correct option is B.
Waymire Company sells a motor that carries a 60-day unconditional warranty against product failure. From prior years' experience, Waymire estimates that 3% of units sold each period will require repair at an average cost of $100 per unit. During the current period, Waymire sold 73,000 units and repaired 1,000 units.
(a) How much warranty expense must Waymire report in its current period income statement?(b) What warranty liability related to current period sales will Waymire report on its current period-end balance sheet?
Answer: Income statement $100,000
Balance sheet warranty liability $Nill
Explanation:
Since we are at the end of the period and all activities has been concluded with no expectation of claim of repairs. The firm will only record the cost incurred for current period on repairs which is $100,00 ( $100*1000) . The liability will be zero since the company has taken care of all repairs for the period.
Final answer:
Waymire must report a warranty expense of $219,000 on its income statement. The warranty liability related to current period sales to be reported on the balance sheet is $216,000, covering the estimated repairs for units still under warranty.
Explanation:
Waymire Company Warranty Expenses and Liabilities
To calculate the warranty expense Waymire must report in its current period income statement, we will use the information that Waymire estimates a 3% failure rate with an average repair cost of $100 per unit. Waymire sold 73,000 units during the current period. Therefore, the estimated warranty expense is 73,000 units imes 3% imes $100 = $219,000. This is the amount that should be recognized in the income statement as an expense.
As for the warranty liability, Waymire repaired 1,000 units. The cost for these repairs would already have been accounted for, so we need to determine the liability for units sold that have not yet failed but are still under warranty. Since 1,000 repairs have already been made, the remaining estimated repairs are for the units sold minus those repaired: 73,000 units - 1,000 repaired units = 72,000 units. The liability for these remaining units is 72,000 units imes 3% imes $100 = $216,000. This is the amount that Waymire should report on its balance sheet as a liability related to the current period sales.
A major DVD rental chain is considering opening a new store in an area that currently does not have any such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area are equipped with DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have DVD players. The decision on the hypothesis test using a 3% level of significance is
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
The student's question involves performing a hypothesis test to determine if more than 5,000 of the 20,000 households in the area have DVD players, using a sample of 300 households where 96 have DVD players and a significance level of 3%. A z-test will be used to compare the sample proportion to the hypothesized population proportion.
Explanation:
The question asks us to decide whether to open a new DVD rental store based on the evidence obtained from a sample. A chain will open a new store if more than 5,000 out of 20,000 households have DVD players. In the sample of 300 households, 96 have DVD players. We need to perform a hypothesis test to make this decision.
To test the hypothesis, define the null hypothesis (H0) as the proportion of households with DVD players being 5,000 out of 20,000, which is 0.25. The alternative hypothesis (H1) is that the proportion is greater than 0.25. The sample proportion with DVD players is 96/300, which is 0.32. We can use a z-test to compare the sample proportion to the population proportion.
The level of significance is given as 3%. This is the probability of rejecting the null hypothesis if it is actually true. After calculating the z-score for the sample proportion, we would compare it to the critical value from the z-table that corresponds to 3% significance level. If the calculated z-score is greater than the critical value, we reject the null hypothesis.
On a tropical island there are 100 potential boat builders, numbered 1 through 100. Each can build up to 16 boats a year, but anyone who goes into the boatbuilding business has to pay a fixed cost of $15. Marginal costs differ from person to person. Where y denotes the number of boats built per year, boat builder 1 has a total cost function c(y) = 15 + y. Boat builder 2 has a total cost function c(y) = 15 + 2y, and more generally, for each i, from 1 to 100, boat builder i has a cost function c(y) = 15 +iy. If the price of boats is 40, how many boats will be built per year? a. 624 b. 200 c. 936 d. 400 e. Any number between 640 and 656 is possible.
Answer:
a. 624
Explanation:
Please see attachment .
In a research report, the action statements that will help solve the problem at hand through the creation of a competitive advantage is most likely to be included in the _____.
Group of answer choices
A. recommendations
B. limitations section
C. appendixes
D. research methods
E. section data
F. analysis and findings section
Answer:
A. recommendations
Explanation:
One of the most important parts of research reports, business case studies or business plans is the recommendation part.
Research reports are usually made by financial analysts, usually in order to provide an idea for lucrative investment or just to assess a particular financial instrument, stock or currency.
After presenting the summary and conducting proper analyses comes the recommendation section. In this section, strategic solutions and action plans are presented, given that they are the rational output of the needed analyses and prerequisites related to research.
Every recommendation represents an actionable solution that should be implemented or pursued in order to gain some benefits. Here are some recommendations:
- Investment recommendations - Analysts may discover it is extremely lucrative to invest in a particular industry.
- Purchase of particular shares - After proper research, it may be implied that shares of a particular company are stable in the long run, making them appealing for a steady income through dividends.
Edna Recording Studios, Inc., reported earnings available to common stock of $4 comma 200 comma 0004,200,000 last year. From those earnings, the company paid a dividend of $1.261.26 on each of its 1 comma 000 comma 0001,000,000 common shares outstanding. The capital structure of the company includes 4040% debt, 1010% preferred stock, and 5050% common stock. It is taxed at a rate of 2121%. a. If the market price of the common stock is $40 and divendends are expected to grow at a rate of 6% per year for the forseeable future, what is the company's cost of retained earnings financing?
b. If underpricing and floatation costs on new shares of common stock amount to $7.00 per share, what is the company's cost of new common stock financing?
c. The company can issue $2.00 dividend preferred stock for a market price of $25.00 per share. Flotation costs would amount to $3.00 per share. What is the cost of perferred stock financing?
d. The company can issue $1,000-par-value, 10% coupon, 5-year bonds that can be sold for $1,200 each. Floatation costs would amount to $25.00 per bond. Use the estimation formula to figure the approximate cost of debt financing.
e. What is the WACC?
Answer:
Check the following calculations
Explanation:
a. Cost of Retained Earnings(Ke) = [Dividend (1+growth)/Market price] + growth Cost of Retained Earnings
=[1.26 (1+0.06)/40] + 0.06
=0.09339
=9.339%
=9.34%
b. Company Cost of New Common Stock
(Ks)=[Dividend (1+growth)/(Market price - floatation costs ] + growth Rate
=[1.26 (1+0.06)/(40-7)]+0.06
=0.10047
=10.047%
=10%
c. Cost of Preferred Stock
Kp=Prefered Dividend/(market price - Flotation cost)
=2/(25-3)
=0.090909
=9.09%
d. cost of debt financing
Kd= [{Coupon +(FV-RV)/T}/(FV+RV)/2] x [1 - 0.40]
=[{100+(1000-1175)/5}/(1000+1175)/2] x [1-0.40]
=[65/1087.5] x 0.60
=0.035862
=3.586%
=3.59%
e. WACC
The maximum investment that Edna Recording Studios can make in new projects before it must issue new common stock
And maintaining the same capital structure
total capital fund before raised
that is out [4,200,000 - 1000,000 x 1.26] / 0.5 =$5,880,000
I WACC for the project that are finance from old fund
WACC= Ke x E/V +Kp x P/V + Kd x D/V
= 9.339 x 0.50 + 9.09 x 0.10 + 3.586 x 0.4
=7.0129% [this wacc is for procets finance from 0 to $5,880,000 FUND]
II WACC for the project that is financed from revised raised fund above $5,880,000. Assuming fund is raised from all the three sources like that maintain same ratio of capital structure means percentage of fund in the capital structure
WACC= Ke x E/V +Kp x P/V + Kd x D/V
= 10.047 x 0.50 + 9.09 x 0.10 + 3.586 x 0.4
=7.3669% [this wacc is for the projects from above $5,880,000]
Kp=Cost of preferred stock
Ke = cost of equity
Kd = cost of debt
D = market value of the firm’s debt
V = E + D+P
E/V = percentage of financing that is equity = 50%
D/V = percentage of financing that is debt=40%
P/V=Percentage of financing that is preferred stock=10%
Marigold Company estimates that 2017 sales will be $42,500 in quarter 1, $53,700 in quarter 2, and $65,700 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 22% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2017.
Answer:
Prepare a merchandise purchases budget by quarter for the first 6 months of 2017.$ 50.652
Explanation:
Each month the company has to purchase the inventory to the next quarter and cover the cost of goods of the current quarter which is the costo of good of the months minus the initial inventory.
Quarter 1 - Quarter 2 - Quarter 3
$42,500 - $53,700 - $65,700 - Sales
$21,250 - $26,850 - $32,850 - Cost of Goods
$4,675 - $5,907 - $7,227 - Initial Inventory
$22,482 - $28,170 - ------------- Merchandises Purchases
Total Merchandise purchases for the first two quarters :
$50,562 = $22,482 + $28,170
$22,482 = $21,250 - $4,675 + $5,907
$28,170 = $26,850 - $5,907 + $7,227
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:
Puget Sound Divers Planning Budget For the Month Ended May 31
Budgeted diving-hours (q) 350
Revenue ($420.00q) $ 147,000
Expenses:
Wages and salaries ($11,500 $130.00q) 57,000
Supplies ($4.00q) 1,400
Equipment rental ($2,200 $25.00q) 10,950
Insurance ($3,900) 3,900
Miscellaneous ($510 $1.44q) 1,014
Total expense 74,264
Net operating income $ 72,736
Required:
During May, the company’s actual activity was 340 diving-hours. Compute the flexible budget of activity.
Answer:
operating income 84740.4
Explanation:
The flexible budget will work out the numbers for a level of activity of 340 units
Revenue $420 x 340 = 142,800
Wages and salaries $11,500 fixed component + $130 x 340 = 55,700
Supplies $4.00 x 340 = 1,360
Insurnace (fixed) $3,900
Miscellaneous $510 fixed component + $1.44 x 340 = 999,6
Operating Income:
Revenues 142,800
total expenses (58,059.6)
operating income 84740.4
Which of the following are advantages of the corporate form of organization?
I. Ability to raise large sums of equity capital
II. Ease of ownership transfer
III. Profits taxed at the corporate level
IV. Limited liability for all owners
A. I and II only
B.III and IV only
C.II, III, and IV only
D. I, II, and IV only
E. I, II, III, and IV
Answer:
D. I, II, and IV only
Explanation:
A corporation is a form of business where ownership can be acquired through purchase of shares.
The liability of shareholders also known as owners is limited to the amount invested in the business.
Corporations can raise capital through the issuance of shares, bonds and through borrowing.
The profits of a corporation can be taxed at the corporation and personal level. This is known as double taxation.
I hope my answer helps you
Answer:
A. I and II only
Explanation: don't get caught lackin.
A call option with an exercise price of $30 and four months to expiration has a price of $4.10. The stock is currently priced at $29.80, and the risk-free rate is 4 percent per year, compounded continuously. What is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
price is $3.90
Explanation:
given data
exercise price = $30
four months to expiration price = $4.10
stock currently priced = $29.80
risk free rate = 4 % per year
to find out
What is the price of a put option with the same exercise price
solution
we know that put call parity that is express as
S + P = C + E × [tex]e^{-rt}[/tex] ........................1
here S is stock price and P is put price and R is risk free rate and C is call price and t is time to maturity and E is exercise price
so put here all these value in equation 1 we get
P = C + E × [tex]e^{-rt}[/tex] - S
P = 4.10 + 30 × [tex]e^{-0.04*\frac{4}{12}}[/tex] - 29.80
P = 3.90
so price is $3.90
The price of a put option with the same exercise price as the call option is $4.30.
Explanation:To find the price of a put option with the same exercise price as the call option, we can use the put-call parity formula. The put-call parity formula states that the price of a call option plus the present value of the exercise price equals the price of a put option plus the current stock price. We can rearrange this formula to solve for the price of the put option:
Put Price = Call Price + Exercise Price - Stock Price
Substituting the given values, we have:
Put Price = $4.10 + $30 - $29.80 = $4.30
Therefore, the price of a put option with the same exercise price is $4.30.
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