The expected price for the 6-month maturity Treasury bill would be approximately $9,901.47.
The price of a Treasury bill (T-bill) can be calculated using the formula for the present value of future cash flows. In this case, the T-bill will mature in 6 months and pay a face value of $10,000.
The price of a T-bill is calculated by using the present value formula:
[tex]P = FV/ (1+r)^n[/tex]
Where:
P is the price of the T-bill
F is the face value of the T-bill ($10,000 in this case)
r is the interest rate per period (2% or 0.02 in this case, since it's given as a percentage)
n is the number of periods until maturity (0.5 years or 0.5 periods in this case, since the T-bill matures in 6 months)
Plugging in the values:
[tex]PV = 10,000/(1+0.02)^{0.5}[/tex]
= 9,901.47.
Therefore, the expected price for the 6-month maturity Treasury bill would be approximately $9,901.47.
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Final answer:
The price of a 6-month maturity Treasury bill can be calculated using the formula Price = Face Value / (1 + (Discount Rate * Time)). In this case, the T-bill with 6 months remaining sells for $9,803.92.
Explanation:
A Treasury bill (T-bill) is a short-term debt security issued by the US government. Its price is determined by the discount rate, which is the difference between the face value of the bill and the price at which it is sold. To calculate the price of a T-bill, you can use the formula:
Price = Face Value / (1 + (Discount Rate * Time)),
where the time is the number of periods until maturity.
In this case, the T-bill has 6 months remaining until maturity and offers a return of 2% per 6 months. To determine the price, we plug in the values:
Price = $10,000 / (1 + (0.02 * 1)),
Calculating, we get:
Price = $10,000 / (1.02).
Rounding to 2 decimal places, the expected price of the T-bill is $9,803.92.
Renault has created a way to generate high profits on low-priced automobiles by using simple designs that incorporate components from older car designs and a no-discount retail policy. They are using a(n) ______________ strategy.
Answer:
The correct answer is overall cost leadership.
Explanation:
Companies usually use the strategy of overall cost leadership to be more competitive and get some advantage by creating a low-cost-position among its competitors. In other words, the strategy tends to give the company the ability to keep lower prices than its competitors by increasing productivity and efficiency, eliminating waste, or controlling costs.
When a competitive firm maximizes profit, it will hire workers up to the point where thea. marginal product of labor is equal to the product price. b. value of the marginal product of labor is equal to the product price. c. value of the marginal product of labor is equal to the wage. d. marginal product of labor is equal to the wage.
Answer: The correct answer is "C. value of the marginal product of labor is equal to the wage."
Explanation:
Assuming that a company operates in a market of perfect competition and that maximizes profits, this company will hire workers to the point where the value of the marginal product of labor is equal to the wage, because it is the point at which the costs of having an additional worker do not exceed the benefits of his incorporation.
A competitive firm maximizes profit by hiring workers until the value of the marginal product of labor equals the wage. The marginal revenue product must match the market wage for profit maximization, which represents the additional revenue from an additional worker.
Explanation:When a competitive firm maximizes profit, it will hire workers up to the point where the value of the marginal product of labor is equal to the wage. This is known as equating the marginal revenue product (MRP) to the market wage. The MRP is the additional revenue the firm earns from hiring one more worker and is calculated by multiplying the marginal product of labor by the price of the firm's output.
For example, if the going market wage is $12, the profit-maximizing firm will continue to hire workers until the MRP, which is the value of the marginal product, is also $12. If hiring an additional worker generates less than $12 in extra revenue, the cost of hiring (wage) exceeds the benefit (revenue), and thus hiring more workers would not maximize profits.
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PHN Foods granted 18 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $5 per share on January 1, 2017, the grant date. Required: 1. What journal entry will PHN Foods prepare to record executive compensation regarding these restricted shares at December 31, 2017 and December 31, 2018? 2. When calculating diluted EPS at December 31, 2018, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averages $5 per share during 2018?
Answer:
The $12 million is the net increase in the denominator of the EPS fraction if the market price of the common shares averages $5 per share during 2018.
Explanation:
1. The journal entry is shown below:
For December 31, 2017:
Compensation Expenses A/c Dr ($18 million × $5 per share) ÷ 3 = $30 million
To Restricted Shares $30 million
(Being compensation expenses recorded for 2017 year)
For December 31, 2018:
Compensation Expenses A/c Dr ($18 million × $5 per share) ÷ 3 = $30 million
To Restricted Shares $30 million
(Being compensation expenses recorded for 2018 year)
2. The net increase in the denominator of the EPS fraction for 2018 year is shown below:
= 2018 shares - Restricted shares
= $30 million - $18 million
= $12 million
Hence, the $12 million is the net increase in the denominator of the EPS fraction if the market price of the common shares averages $5 per share during 2018
Tata Motors assembles cars from their own parts and subassemblies and also controls the mining and fabrication of the materials used to create those parts. When Anand ordered their luxury sedan with the platinum dashboard he knew he wouldn't be taking delivery of his dream car the next week. Rather, he would be waiting a while thanks to: a.a mismatch between supply chain lead time and customer demand. b.a mismatch between overall demand levels and productive capacity. c.a mismatch between demand and the most efficient production volume. d.a mismatch between demand and the most efficient shipment volume.
Answer:
The correct answer would be option A, A mismatch between supply chain lead time and customer demand.
Explanation:
Anand ordered his dream car which is luxury sedan with platinum dashboard. He knows that the delivery of his car will take time to reach him. This is because of the fact that there is a mismatch between supply chain lead time and the customer demand. A lead time is simply the delay or latency between the starting of a process till its execution. The delayed time between the initiation and the execution of a process is called as the lead time. Now Anand has ordered his dream sedan with some customization, which is the demand of the customer. Now the delay in the delivery of the his dream car will be due to the mismatch between his demand and the latency in the initiation and execution/delivery of the car to Anand.
You are scheduled to receive $17,000 in two years. When you receive it, you will invest it for six more years at 9.75 percent per year. How much will you have in eight years?
Answer: $29,708.18 in eight years.
Explanation:
Amount received in two years = $17,000
Interest rate received per year = 9.75%
Amount received in eight years,
here we are using formula for calculating amount received after eight years are as follows:
A = [tex]P(1+ \frac{r}{100}) ^{n}[/tex]
= [tex]17000(1+ \frac{9.75}{100}) ^{6}[/tex]
= [tex]17000(1+ 0.0975) ^{6}[/tex]
= 17000 (1.7475402)
= 29708.18 ⇒ this much a person can earn in eight years.
Final answer:
Compound interest calculation method explanation for investing $17,000 for eight years at 9.75% annually.
Explanation:
Compound interest is calculated using the formula A = P(1 + r/n)^(nt) where A is the future value of the investment, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years the money is invested for.
In this scenario, with an initial investment of $17,000 compounded annually at 9.75% for six years, the future value after eight years can be calculated using the compound interest formula to determine the total amount accrued.
Substitute the given values into the formula, with P = $17,000, r = 9.75%, n = 1 (compounded annually), and t = 8 years to find out how much the investment will grow to after the specified period.
noted the following: Units Work-in-process, August 1 (50% complete) 4,000 Units started during the month of August 20,500 Work-in-process, August 31 8,000 Materials are added at the beginning of the process. Tukka Toy uses the weighted average method; equivalent units of production for August were 19,500. Therefore, the percent complete of the work-in-process at August 31 was ________.
Answer:
Percent complete of work in process at August 31 was 60%
Explanation:
In this case opening WIP = 4,000 units which were 50 % complete
During the month we created additional 20,500 units of Work In Process
Additional 8,000 units of raw material were added.
Total units = 4,000 + 20,500 +8,000 = 32,500
Equivalent units completed = 19,500
Percentage of complete work in process at month end = ( 19,500/32,500 )[tex]\times[/tex] 100 = 60%
Final answer:
The percent complete of the work-in-process at August 31 was 25%, calculated by determining the equivalent units of production, subtracting the units completed, and dividing by the ending work-in-process.
Explanation:
The student's question is asking how to calculate the percent completion of work-in-process (WIP) for the month of August using the weighted average method. We're given the number of units in WIP at the start of August (4,000 units at 50% complete), the units started during the month (20,500), and the units in WIP at the end of August (8,000). Additionally, the equivalent units of production for August were 19,500. Equivalent units of production take into account both the completed units and the percentage of completion for the units still in process at the end of the period.
Step-by-Step Calculation
As materials are added at the beginning of the process, the 8,000 units in WIP at August 31 are 100% complete concerning materials.
To find the percentage of completion for conversion costs, we need to calculate how many units were completed and transferred out. This can be found by taking the total equivalent units (19,500) and subtracting the equivalent units for the units in beginning WIP (2,000 equivalent units, because they were 50% complete). The remaining equivalent units represent the work done in August, including the completed units and the percentage completion of the ending WIP.
Using the information from step 2, calculate the completed units: 19,500 equivalent units - 2,000 equivalent units from beginning WIP = 17,500 units completed and transferred out during August.
The number of units started and completed in August equals completed units minus beginning WIP plus ending WIP:
17,500 units completed - 4,000 units beginning WIP + 8,000 units ending WIP = 21,500 units started and completed.
To find the percentage completion of the ending WIP, we use the formula:
(Equivalent units of production - Units completed)/Ending WIP = Completion percentage for the ending WIP:
(19,500 - 17,500)/8,000 = 25%
Therefore, the percent complete of the work-in-process at August 31 was 25%.
At year-end (December 31), Chan Company estimates its bad debts as 1.00% of its annual credit sales of $794,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $397 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare the journal entries for these transactions.1. Record the estimated bad debts expense.2. Record the entry to write off P. Park's account as uncollectible.3. Record the reinstatement of Park's previously written off account.4. Record the cash received on account.
Answer:
1. bad debt expense debit 7940
allowance for bad debt credit 7940
2. allowance for bad debt debit 397
account receivable credit 397
3. account receivable debit 397
allowance for bad credit 397
4. cash debit 397
account receivable credit 397
Explanation:
the allowance will be the 1% of 794,000
then recognize the allowance for that ammount along with the bad debt expense
total write-off an account we decrease both, the allowance and account receivable
total reinstate the Parks account we do the previous entry backwards
lastly we post like any other collection from Account Receivable
Suppose market demand is QD=50-2P and market supply is QS=40+2P. The market equilibrium price is $___________ nothing and the equilibrium quantity is _______units. (Enter your responses rounded to two decimal places.) Suppose the government institutes a price floor of $5.00. The price floor will results in a ▼ surplus shortage of nothing units. (Enter your response as a whole number.)
Answer:
The market equilibrium price is $ 2.50 and the equilibrium quantity is 45 units.
IF price floor is set at $5 then it will be a surplus of quantity.
Explanation:
[tex]\left \{ {{QD=50-2P} \atop {QS=40+2P}} \right.[/tex]
50 - 2P = 40+2P
50-40 = 2P + 2P
10 = 4P
10/4 = P
2.5= P
50-2*2.5 = 50- 5 = Q45
If P = 5
40 + 2P = 40 + 2*5 = 50 supply quantity
50 - 2*5 = 50 - 10 = 40 demand quantity
supply will be greater than demand, it will be a surplus
Final answer:
The market equilibrium price is $2.5, and the equilibrium quantity is 45 units. If a price floor of $5 is introduced, it results in a surplus of 10 units, indicating that the supply exceeds the demand.
Explanation:
To find the market equilibrium price and quantity, we set the market demand and market supply equal to each other, i.e., QD = QS. Given that the market demand is QD = 50 - 2P and the market supply is QS = 40 + 2P, we can find the equilibrium by solving:
50 - 2P = 40 + 2P
Subtracting 40 from both sides and adding 2P to both sides yields:
10 = 4P
Thus, P = 2.5. Therefore, the equilibrium price is $2.5.
To find the equilibrium quantity, we substitute P = 2.5 into either the demand or supply equation. Using the demand equation: QD = 50 - 2(2.5) = 45. So, the equilibrium quantity is 45 units.
If the government sets a price floor of $5, which is above the equilibrium price of $2.5, we need to evaluate the new market conditions. At a price of $5, the demand would be QD = 50 - 2(5) = 40 units, and the supply would be QS = 40 + 2(5) = 50 units. Thus, there would be a surplus of 10 units as the quantity supplied exceeds the quantity demanded by 10 units when the price is set at $5.
Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $10; Annual direct fixed costs $50,000; Allocation of overhead costs $20,000; Expected utilization 1,000 visits. What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service?
Answer:
Price to be charged per visit = $90 per visit
Explanation:
We need to calculate the price per visit.
Desired profit = $10,000
Total costs for 1,000 visits = Variable Costs + Fixed Costs + Allocated Costs
Variable cost = $10 X 1,000 visits = $10,000
Fixed costs = $50,000
Allocated Overhead costs = $20,000
Total costs = $10,000 + $50,000 + $20,000 = $80,000
Total amount to be recovered = Total costs + desired profit
= $80,000 + $10,000 = $90,000
Total no of visits = 1,000
Price to be charged per visit = $90,000/1,000 = $90 per visit
Super Clinics must set a price of $90 per visit to reach a desired profit of $10,000, given their costs and estimated number of visits.
To calculate the price per visit that Super Clinics must set to achieve an annual profit of $10,000, we need to consider the total costs and the desired profit. The total costs include both variable costs and fixed costs. Variable costs per visit are given as $10, and with expected utilization of 1,000 visits, the total variable costs would be $10,000. We also have annual direct fixed costs of $50,000 and an allocation of overhead costs of $20,000. Adding these figures together results in total annual costs of $80,000 ($10,000 variable + $50,000 fixed + $20,000 overhead).
To achieve a profit of $10,000, the clinic must earn total revenue that is $10,000 more than the total costs. Therefore, the target total revenue is $90,000 ($80,000 total costs + $10,000 profit). To find the price per visit, we divide the target total revenue by the expected number of visits. This gives us $90,000 / 1,000 visits = $90 per visit.
The Assembly Department started the month with 24,900 units in its beginning work in process inventory. An additional 309,900 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 29,900 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month
Answer:
304900 units should be transferred to the next processing department during the month.
Explanation:
Work in process : As a name suggest, the Work in process (WIP) is a process in which the work is in under processing or we can say it is not 100 % completed. It can be incomplete in any cycle .
It includes various cost like - direct material , direct labor, overhead, etc.
To find out how much units is to be transferred, the following equation is used which is shown below.
= Opening Work in process inventory + Purchase of inventory - closing work in progress inventory
= 24,900 units + 309,900 units - 29,900 units
= 304900 units
Thus, 304900 units should be transferred to the next processing department during the month.
Final answer:
The number of units transferred to the next processing department is calculated by adding the beginning work in process inventory and the units transferred in, then subtracting the ending work in process inventory. In this scenario, 304,900 units were transferred to the next department.
Explanation:
The student's question is about calculating the number of units transferred to the next processing department in the context of production and inventory management. To find the number of units transferred, we need to consider the total number of units available for processing and subtract the ending work in process inventory.
Here is the calculation:
Beginning work in process inventory: 24,900 unitsUnits transferred in: 309,900 unitsEnding work in process inventory: 29,900 unitsUnits transferred to the next process = (Beginning inventory + Transferred in) - Ending inventoryUnits transferred to the next process = (24,900 + 309,900) - 29,900Units transferred to the next process = 304,900 unitsTherefore, 304,900 units were transferred to the next processing department during the month.
The ending inventory of finished goods has a total cost of $9,500 and consists of 600 units. If the overhead applied to these goods is $3,600, and the overhead rate is 80% of direct labor, how much direct materials cost was incurred in producing these units?
Answer:
Direct Materials = 1,400
Explanation:
Using the total cost formula we will solve for materials
total cost = materials + labor + MOH
the total cost is a given.
MHO is a given also.
The labor can be expressed as a percent or MOH using the rate
If MHO = 80% LABOR THEN
MHO/80% = LABOR
3600/0.80 = 4500
now posting the know values un the formula:
9,500 = DM + 4,500 + 3,600
DM = 9,500 - 4,500 - 3,600
DM = 1,400
Your order is supposed to be delivered between 5PM-6PM, and it’s now 5:45PM. You’re stuck in a long line waiting to check out. In this situation, you will be late delivering the order. Provide an example of the text message you would send to the member.
Explanation:
If I am stuck in a long line waiting to check out and I was supposed to deliver the parcel between 5 PM to 6 PM, then I will text the receiver telling him about my problem and tell him that his order will be delivered late and will give him a time boundary. My text message to him will look like the following:
Hi Sir/Madam,
This is abc from xyz company. Your parcel was scheduled to deliver between 5 PM to 6 PM, but due to some uncertain situation, there is a short delay in the delivery. Your parcel is hoped to deliver within the next one hour.
Your patience will be highly appreciated, and apologies for the delay.
Best Regards.
A sample of the text message sent to apologize for the delay would look like this:
This is ABC from XYZ company. Your parcel was scheduled to deliver between 5 PM to 6 PM, but due to some unforeseen delays, we would deliver within the next hour.
Your patience will be highly appreciated, and apologies for the delay.
What is an Apology?This is a statement that shows that a person is sorry for the action and would want to rectify the situation.
Hence, we can see that based on the hypothetical situation about sending a parcel and not delivering on time, an apology text needs to be sent and it is shown above.
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During a year, Teri’s monthly sales compensation ranged between $22,000 and $30,000 per month and units sold ranged between 1,400 and 2,200 units for those same months. Required: Use the high–low method to determine Teri’s monthly salary and commission rate per unit sold and then calculate the total number of units sold in a year when Teri’s total compensation amounted to $291,000. (Round your "Commission rate" to 2 decimal places.)
Answer:
8,000 = fixed cost
10 unit cost
Explanation:
High low method calcualtes the difference to get the variable cost:
2,200 units generated 30,000 (fixed + variable)
minus
1,400 units generated 22,000 (fixed + variable)
800 8,000 variable
800 units generated $8,000 of cost
$8,000 / 800 untis = 10 unit cost
Now we solve for fixed cost
total cost = fixed cost + variable cost
total cost = fixed cost + quantity x variable unit cost
30,000 = fixed + 2,200 x 10
30,000 = fixed + 22,000
30,000 - 22,000 = fixed
8,000 = fixed cost
Mickey Tire Company makes a special kind of racing tire. Variable costs are $ 240 per unit, and fixed costs are $ 25 comma 000 per month. Mickey sells 400 units per month at a sales price of $ 315. If the quality of the tire is upgraded, the company believes it can increase the sales price to $ 400. If so, the variable cost will increase to $ 300 per unit, and the fixed costs will rise by 40%. If Mickey decides to upgrade, how will operating income be affected? A. Operating income will decrease by $ 10 comma 000. B. Operating income will decrease by $ 24 comma 000. C. Operating income will increase by $ 24 comma 000. D. Operating income will remain the same.
Answer:
D. Operating Income will remain the same.
Explanation:
Change in Operating Income = Current Operating Income - Revised Operating Income
Current Operating Income = Sales - Variable Cost - Fixed Cost
Current Sales = $315 X 400 units = $126,000
Variable Cost = $240 X 400 units = $96,000
Fixed Cost = $25,000
Current Operating Income = $126,000 - $96,000 - $25,000 = $5,000
Revised Operating Income = Revised Sales - Revised Variable Cost - Revised Fixed Cost
Revised Sales = $400 X 400 units = $160,000
Revised Variable Costs = $300 X 400 units = $120,000
Revised Fixed Cost = $25,000 + 40% of $25,000 = $25,000 + $10,000
= $35,000
Revised Operating Income = $160,000 - $120,000 - $35,000 = $5,000
Change in operating Income = $5000 - $5000 = $0
Correct option is D. Operating Income will remain the same.
After calculating the current and projected operating incomes, the result shows that Mickey Tire Company's operating income will remain the same at $5,000 after the upgrade.
To calculate the impact on operating income if Mickey Tire Company upgrades its tires, we need to assess both the current and projected financial performance. The current operating income is calculated by taking the difference between current total revenue and total costs (fixed plus variable).
Current total revenue: 400 units × $315 = $126,000
Current total variable costs: 400 units × $240 = $96,000
Current operating income: $126,000 - $96,000 - $25,000 (fixed costs) = $5,000
If Mickey upgrades:
New fixed costs: $25,000 × 140% = $35,000
New total variable costs: 400 units × $300 = $120,000
New total revenue: 400 units × $400 = $160,000
New operating income: $160,000 - $120,000 - $35,000 = $5,000
The operating income will remain the same at $5,000 after considering the changes in sales price, variable costs, and fixed costs associated with the tire quality upgrade.
The following information is from ABC Company’s general ledger: Beginning and ending inventories, respectively, for raw materials were $9,600 and $11,600 and for work in process were $21,600 and $23,600. Raw material purchases and direct labor costs incurred were $37,600 each, and manufacturing overhead applied amounted to $21,600. Required: Prepare a statement of cost of goods manufactured for ABC Company
The statement of cost of goods manufactured for ABC Company is prepared by calculating the total raw materials used, adding direct labor and manufacturing overhead, and then adjusting for work in process inventory changes.
Statement of Cost of Goods Manufactured
To prepare the statement of cost of goods manufactured for ABC Company, we need to follow certain steps involving various components such as raw materials, direct labor, and manufacturing overhead. We start by calculating the total raw materials available for use, then we add direct labor and manufacturing overhead to get the total manufacturing costs, which is then adjusted by the change in work in process inventory to arrive at the cost of goods manufactured.
Calculation Breakdown:
Beginning Raw Materials Inventory: $9,600
Purchases of Raw Materials: $37,600
Ending Raw Materials Inventory: $11,600
Beginning Work in Process Inventory: $21,600
Direct Labor: $37,600
Manufacturing Overhead: $21,600
Ending Work in Process Inventory: $23,600
Statement of Cost of Goods Manufactured
Raw Materials Used in Production = Beginning Raw Materials Inventory + Purchases of Raw Materials - Ending Raw Materials Inventory
Total Manufacturing Costs = Raw Materials Used + Direct Labor + Manufacturing Overhead
Total Cost of Work in Process = Total Manufacturing Costs + Beginning Work in Process Inventory - Ending Work in Process Inventory
Cost of Goods Manufactured = Total Cost of Work in Process
For its top managers, Goldberg Industries formats its income statement as follows: GoldBerg Industries Contribution Margin Income Statement Three Months Ended October 31, 2019 Net Sales Revenue $ 490,200 Variable Costs 294,120 Contribution Margin 196,080 Fixed Costs 173,000 Operating Income $ 23,080 What would be the outcome if this contribution margin income statement were prepared at the $377,000 sales level? (*The proportion of each sales dollar that goes toward variable costs is consistent within the relevant range.)
Answer:
The outcome will be a net loss for 22,200
Explanation:
[tex]\left[\begin{array}{ccc}Sales&490,200&377,000\\variable \: cost&-294,120&-226,200\\contibution&196,080&150,800\\fixed \:cost&-173,000&-173,000\\net \: income&23,080&-22,200\\\end{array}\right][/tex]
284120/490200 = 0.6 variable cost weight
377,000 x 0.6 = 226,200 variable cost
Common stock value: Constant growth The common stock of Barr Labs Inc., trades for $120 per share. Investors expect the company to pay a(n) $1.37 dividend next year, and they expect that dividend to grow at a constant rate forever. If investors require a(n) 15.8% return on this stock, what is the dividend growth rate that they are anticipating?
Answer:
Dividend growth rate anticipated = 14.66%
Explanation:
Using dividend growth model we have
P[tex]{_0}[/tex] = [tex]\frac{D{_1}}{K{_e} - g}[/tex]
Where P[tex]{_0}[/tex] = Current market price = $120
D[tex]{_1}[/tex] = Dividend to be paid at year end or next year = $1.37
K[tex]{_e}[/tex] = Expected return on equity = 15.8%
g = Expected growth rate
Now putting values we have
$120 = [tex]\frac{1.37}{0.158 - g}[/tex]
0.158 - g = [tex]\frac{1.37}{120} = 0.0114[/tex]
0.158 - 0.0114 = g
0.1466 = g = 14.66%
Final answer:
Using the Gordon Growth Model, investors are anticipating a dividend growth rate of approximately 14.66% for Barr Labs Inc., based on a current stock price of $120, a dividend expected next year of $1.37, and a required rate of return of 15.8%.
Explanation:
To determine the anticipated dividend growth rate for Barr Labs Inc., we will use the Gordon Growth Model, which is given by the formula P = D1 / (r - g), where P is the current stock price, D1 is the dividend expected next year, r is the required rate of return, and g is the growth rate. Plugging in the values provided:
P = $120
D1 = $1.37
r = 15.8%
We can rearrange the formula to solve for the growth rate g:
g = r - (D1 / P)
Substituting the values into the equation, we get:
g = 0.158 - ($1.37 / $120)
g = 0.158 - 0.0114167
g = 0.1465833 or 14.65833% (rounded to five decimal places)
Therefore, investors are anticipating a dividend growth rate of approximately 14.66% for Barr Labs Inc.
Beck Company has inventory of $725,000 in its stores as of December 31. It also has two shipments in transit that left the suppliers' warehouses by December 28. Both shipments are expected to arrive on January 5. The first shipment of $210,000 was sold f.o.b. destination and the second shipment of $102,000 was sold f.o.b. shipping point. Beck Company also has consigned goods of $72,000 awaiting sale with Meyer Company. What amount of inventory should Beck Company report on its balance sheet as of December 31?
Answer:
Total Inventory $899,000
Explanation:
Inventory at hand $725,000
Inventory in transit $102,000
Inventory in consignation $72,000
Total Inventory $899,000
Notice:
The first cargo is under term FOB destination, which means the goods are still property of the seller, so are not part of Beck company's yet.
While the second cargo is fob shipping point, Beck assume possesion of the gods as soon as they enter the dock.
In its income statement for the year ended December 31, 2019, Sheridan Company reported the following condensed data. Operating expenses $ 759,720 Interest revenue $ 29,970 Cost of goods sold 1,334,200 Loss on disposal of plant assets 15,910 Interest expense 71,270 Net sales 2,416,300 Other comprehensive income 6,920. Prepare a multiple-step income statement. (List other revenues before other expenses.)
Final answer:
To prepare a multiple-step income statement for Sheridan Company, list the revenue and expense items separately. Calculate the total revenue, total expenses, and net income by summing the respective items. The net income for Sheridan Company is $272,090.
Explanation:
A multiple-step income statement categorizes revenues and expenses into different sections to provide a clearer picture of a company's financial performance. To prepare a multiple-step income statement for Sheridan Company, we can list the various revenue and expense items in the following manner:
Revenue
Net Sales: $2,416,300
Interest Revenue: $29,970
Other Revenues: $6,920
Cost of Goods Sold
$1,334,200
Operating Expenses
$759,720
Other Expenses
Loss on Disposal of Plant Assets: $15,910
Interest Expense: $71,270
Total Revenue
(Net Sales + Interest Revenue + Other Revenues) = $2,416,300 + $29,970 + $6,920 = $2,453,190
Total Expenses
(Cost of Goods Sold + Operating Expenses + Other Expenses) = $1,334,200 + $759,720 + $15,910 + $71,270 = $2,181,100
Net Income
(Total Revenue - Total Expenses) = $2,453,190 - $2,181,100 = $272,090
Therefore, the multiple-step income statement for Sheridan Company for the year ended December 31, 2019, shows a net income of $272,090.
It is January 2nd. Senior management of Digby meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 50,000 shares of stock plus a new bond issue. The CFO happily notes this will raise their Leverage (Assets/Equity) to a new target of 2.43. Assume the stock can be issued at yesterday's stock price $23.03. Which of the following statements are true? (Select 2 answers) Digby bond issue will be $47,165 Total Assets will rise to $150,947,421 Digby working capital will be unchanged at $21,092,896 Long term debt will increase from $35,183,502 to $36,334,880 Total investment for Digby will be $2,796,837 Digby will issue stock totaling $1,151,378
Answer:
1. Digby working capital will be unchanged at $21,092,896
2. Digby will issue stock totaling $1,151,378 (50,000*$23.03)
Explanation:
Digby working capital will be unchanged at $21,092,896 this because the fund to be raise is for financing a fixed asset- a plant and equipment.
Working Capital=Current Assets-Current Liabilities
Examples of current assets are Cash & Bank balances, stocks, receivables, etc.
Examples of current liabilities are payables, accrued expenses, etc.
Digby will issue stock totaling $1,151,378 i.e. (50,000*$23.03)
Jason's gross pay for the week is $ 1,000. His yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6% and that Jason's year-to-date pay has not yet exceeded the $ 7,000 cap. His yearly pay is under the limit for OASDI. What is the total amount of payroll taxes that his employer must record as payroll tax expenses? (Do not round your intermediate calculations. Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
Answer:
Total payroll taxes 213
Explanation:
the employeer will have to record the taxes on the wages plus the taxes on his behalf
1,000 x 6.2 = 62
1,000 x 1.45 = 14.5
Total 76.5 for the employee
Then the employer must pay the same amount of taxes.
employer taxes 76.5
Total for OASDI and Medicare: 153
Then FUTA&SUTA 6% of 1000 60
Total payroll taxes 213
1. What are the benefits of creating a comprehensive crisis response plan before a crisis happens? Please research and share at least 1 example of an organization that created and then used such a plan. What happened?
Answer: the benefits are many but mainly if a company has a comprehensive crisis response plan then it is prepared to deal with unforseeable problems that will always appear in a company life.
One great example of a comprehensive crisis response plan was Ford's Bailout. Although Ford did not receive TARP funds, it did receive government loans. These were critical because banks were not lending during the financial crisis. It requested a $9 billion line-of-credit from the government.
Explanation:
Crisis management is the application of strategies designed to help an organization deal with a sudden and significant negative event. A crisis can occur as a result of an unpredictable event or as an unforeseeable consequence of some event that had been considered a potential risk.
Most companies are schooled in establishing a crisis management plan in order to react quickly and eliminate the problem. Here is the process: Identify and define the crisis. Establish an overall corporate response.
Joiner Corporation recently purchased 25,000 gallons of direct material at $5.60 per gallon. Usage by the end of the period amounted to 23,000 gallons. If the standard cost is $6.00 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as: A) $800F. B) $9,200F. C) $9,200U. D) $10,000F. E)$10,000U.
Answer:
B) 9,200 Favourable
Explanation:
Direct Materials price variance:
Actual Quantity * (Standart Cost - Actual Price ) = Direct Materials price variance
23,000 * (6 - 5.6) = 23,000 * 0.4 = $9,200 Favourable
The Standar cost as any other costing system is done to valuate the finished goods, the gallons used in production are 23,000 so cost and cost varaince are done using this as actual quantity.
The other 2,000 are still on raw materials inventory for the company. They are not part of Work in progress so they are excluded from the calculation.
The company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as $9,200 favorable. Thus option B is correct
What is direct material?The price of direct materials is directly related to the unit of manufacturing and is immediately identifiable. For instance, the price of windows is really a direct labor expense in the production making lamps. The primary component needed for the production of commodities or commodities was substance.
The formula that will be used is for Direct Materials price variance
Direct Materials price variance = Actual Quantity * (Standart Cost - Actual Price)
= 23,000 * (6 - 5.6)
= 23,000 * 0.4
= $9,200 which is Favourable
Therefore, option B is the correct option.
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Central University uses $123,000 of a particular toner cartridge for laser printers in the student computer labs each year. The purchasing director of the university estimates the ordering cost at $45 and thinks that the university can hold this type of inventory at an annual storage cost of 22% of the purchase price. How many months' supply should the purchasing director order at one time to minimize the total annual cost of purchasing and carrying?
Answer:
Explanation:
We have to calculate the Economic Order Quantity (EOQ). In this case, the "units" are dollars, and the "price" of each is 1.
One month's usage is 123000/12 = $10,250.
EOQ = 7094.
Month’s usage = 7094/10250 = 0.69
Data
Demand rate, D 123000
Setup cost, S 45
Holding cost, H 22.00%
Unit Price, P 1
Results
Optimal Order Quantity, Q* 7093.530984
Maximum Inventory 7093.530984
Average Inventory 3546.765492
Number of Setups 17.3397424
Holding cost $780.29
Setup cost $780.29
Unit costs $123,000.00
Suppose two firms, A and B, are simultaneously considering entry into a new market. If neither enters,both earn zero. If both enter, they both lose 100. If one firm enters, it gains 50 while the other earns zero. Set up the payoff matrix for this game and determine if any Nash equilibria exist. Can you predict the outcome? What if firm A gets to decide first?
Answer: The answer is as follows:
Explanation:
The payoff matrix for this game is shown in the image.
The nash equilibrium in this game exist when both the firms do not enter into a new market. The nash equilibrium outcome is (0,0), at this choice both the firms didn't loose anything.
If firm A gets to decide first then it would choose not to enter into the new market, this will gives (0,50) & (0,0) outcome and if it chooses to enter then this will gives (-100,-100) & (50,0).
The payoff matrix for the game is as follows:
Firm B Does Not Enter Firm B Enters
Firm A Does Not Enter (0, 0) (-100, -100)
Firm A Enters (-100, -100) (50, 0)
Explanation:Nash equilibrium occurs when no player can improve their payoff by unilaterally changing their strategy. In this game, there is a unique Nash equilibrium where both firms choose not to enter the market, resulting in a payoff of (0, 0). If Firm A gets to decide first, it will choose not to enter, as entering would result in a worse outcome regardless of Firm B's decision. Therefore, the outcome would still be both firms not entering, with a payoff of (0, 0).
Astro Co. sold 20,500 units of its only product and incurred a $67,750 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2018’s activities, the production manager notes that variable costs can be reduced 40% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $155,000. The maximum output capacity of the company is 40,000 units per year. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31, 2017 Sales $ 779,000 Variable costs 584,250 Contribution margin 194,750 Fixed costs 262,500 Net loss $ (67,750 ) Required: 1. Compute the break-even point in dollar sales for year 2017. (Round your answers to 2 decimal places.)
To calculate the break-even point in dollar sales for Astro Co. for 2017, the fixed costs are divided by the contribution margin ratio, which gives us a break-even point of $1,050,000.
Explanation:To find the break-even point in dollar sales for Astro Co. for the year 2017, we need to employ the contribution margin approach. The formula to compute the break-even point in dollars is:
Break-even point (in dollars) = Fixed Costs ÷ Contribution Margin Ratio
The Contribution Margin Ratio is calculated as follows:
Contribution Margin Ratio = Contribution Margin ÷ Sales
From the data provided:
Fixed Costs = $262,500Contribution Margin = $194,750Sales = $779,000Hence, the Contribution Margin Ratio is:
Contribution Margin Ratio = $194,750 ÷ $779,000
Contribution Margin Ratio = 0.25 (rounded to two decimal places)
Now, we calculate the Break-even point:
Break-even point (in dollars) = $262,500 ÷ 0.25
Break-even point (in dollars) = $1,050,000
This means that Astro Co. must generate sales of $1,050,000 to break even in 2017.
Cass Corporation reported pretax book income of $10,600,000. During the current year, the reserve for bad debts increased by $172,500. In addition, tax depreciation exceeded book depreciation by $227,500. Cass Corporation sold a fixed asset and reported book gain of $87,000 and tax gain of $114,500. Finally, the company received $270,000 of tax-exempt life insurance proceeds from the death of one of its officers. Compute the company’s current income tax expense or benefit.
Answer:
Tax Income Expense 10,600,000
Tax income payable 10,302,500
deffered tax liability 297,500
Explanation:
pretax book income 10,600,000
reverse bad debt 172,500
additional dep -227,500
book asset sale gain -87,000
taxable asset sale gain 114,500
tax expemt insurance proceed -270,000
Taxable income 10,302,500
The City of San Antonio is considering various options for providing water in its 50-year plan, including desalting. One brackish aquifer is expected to yield desalted water that will generate revenue of $4.1 million per year for the first 5 years, after which less production will decrease revenue by 10% per year each year. If the aquifer will be totally depleted in 24 years, what is the present worth of the desalting option revenue at an interest rate of 8% per year? The present worth of the desalting option revenue at an interest rate of 8% per year is determined to be $
Answer:
The present worth of desalting option is $28,238,084.2
Explanation:
For this question we have to calculate the present value of the desalting option revenue for all the 24 years , where
for first 5 years the payment would remain $4.1 million, and after that it will keep on decreasing for the rest of the years .
The rate of interest here given is 9% and with this interest we will calculate the present value of the option, for which we will use the formula of present value factor.
PRESENT VALUE FACTOR = \frac{1}{ ( 1 + I )^{N} }
Where I is the interest rate and the N is the number of year, so
Year Payment Present value factor Present value of cash flow
(\frac{1}{ ( 1 + I )^{N} })
1 $ 4100000 .917 $ 3761468
2 $4100000 .842 $3450888
3 $ 4100000 .772 $3165952
4 $ 4100000 .708 $2904543
5 $4100000 .650 $2664719
6 $3690000 .596 $2200226
7 $ 3321000 .547 $1816701
8 $2988900 .502 $1500028
9 $2690010 .460 $1238555
10 $2421009 .422 $1022660
11 $2178908 .388 $844398.5
12 $1961017 .356 $ 697209.7
13 $1764916 .326 $575677.8
14 $1588424 .299 $475330.3
15 $1429582 .275 $392474.5
16 $1286623 .252 $324061.5
17 $1157961 .231 $267573.7
18 $1042165 .212 $220932.5
19 $937948.5 .194 $182421.3
20 $844153.6 .178 $150623.1
21 $759738.3 .164 $124367.7
22 $683764.5 .150 $102564.7
23 $615388 .138 $84923.5
24 $553849.2 .126 $69785
TOTAL PRESENT VALUE OF CASH FLOW = $28,238,084.2
Congress would like to increase tax revenues by 10 percent. Assume that the average taxpayer in the United States earns $65,000 and pays an average tax rate of 15 percent. a. If the income effect is in effect for all taxpayers, what average tax rate will result in a 10 percent increase in tax revenues? (Round your answer to 2 decimal places.)
Final answer:
The new average tax rate needed to achieve a 10 percent increase in tax revenues would be 16.5%, calculated by increasing the current tax revenue per taxpayer by 10 percent and then finding the percentage this represents of the taxpayer's income.
Explanation:
The student is asking to calculate the new average tax rate needed for Congress to increase tax revenue by 10 percent under the assumption that the current average taxpayer earns $65,000 and pays a 15 percent tax rate. To find the new average tax rate, we first calculate the current tax revenue per taxpayer, which is 15 percent of $65,000. Then we increase this amount by 10 percent to find the new tax revenue target. Finally, we divide the new tax revenue target by the taxpayer's income to find the new average tax rate.
Current tax revenue per taxpayer = 0.15 imes $65,000 = $9,750
New tax revenue target = $9,750 imes 1.10 = $10,725
New average tax rate = $10,725 / $65,000
New average tax rate = 0.165 (or 16.5% when expressed as a percentage)
Tresnan Brothers is expected to pay a $4.00 per share dividend at the end of the year (i.e., D1 = $4.00). The dividend is expected to grow at a constant rate of 3% a year. The required rate of return on the stock, rs, is 9%. What is the stock's current value per share? Round your answer to the nearest cent.
Answer:
$66.67
Explanation:
Using dividend growth model
P0 = [tex]\frac{D1}{Ke-g}[/tex]
Where P0 = Current market price of share
D1 = Dividend at year end
Ke = Expected return
g = growth percentage
Since D1 has been provided we will take D1 else formula is D0 + g for calculating D1
Putting the values as provided we have
P0 = [tex]\frac{4}{0.09-0.03}[/tex]
=[tex]\frac{4}{0.06}[/tex] = $66.67